10 years after GMR’s ouster, Muizzu gov’t seeks Indian firms to manage Hanimaadhoo Airport; Indian gov’t initiates process
The government has requested Indian involvement in operating Hanimaadhoo International Airport, which was recently expanded with an USD 800 million Indian credit line. This proposal comes over a decade after GMR Group was controversially expelled from managing Velana International Airport in 2012, with the Maldives later ordered to pay USD 270 million in compensation.
President Muizzu greets Dr. Waheed during the ceremony to inaugurate Hanimaadhoo International Airport
At the request of President Dr. Mohamed Muizzu’s administration, the Indian Ministry of Civil Aviation has instructed the Airports Authority of India (AAI) to review a proposal concerning the involvement of Indian companies in the management and operation of Hanimaadhoo International Airport.
The move to seek an Indian operator for Hanimaadhoo International Airport comes more than a decade after the abrupt termination of the agreement with Indian infrastructure conglomerate GMR Group for the development of Velana International Airport (VIA), an episode that culminated in the expulsion of the company’s personnel from the Maldives.
According to reports in Indian media, the Ministry of Civil Aviation sent a formal letter to the AAI earlier last week. The correspondence stated that the proposal had been presented to Union Minister of Civil Aviation K. Ram Mohan Naidu by President Mohamed Muizzu during the minister’s visit to the Maldives as the special envoy of Indian Prime Minister Narendra Modi for the inauguration of Hanimaadhoo International Airport on 9 November 2024.
A senior official from the ministry confirmed to The Hindu that the AAI had been directed to examine the proposal for involving Indian companies in the management of the airport.
The AAI currently manages 113 airports across India, along with 26 state-owned airports. Of these, 13 AAI-owned airports are operated by private companies, including GMR, GVK and the Adani Group. Seven of these airports, excluding Navi Mumbai, are currently managed by the Adani Group.
Hanimaadhoo Airport has been operational since 1986. As part of its major redevelopment and expansion, India extended an USD 800 million Line of Credit through the Exim Bank of India. The development contract, valued at USD 136.6 million, was awarded to the Indian firm JMC Projects. The scope of the project includes the construction of a 2,465-meter runway capable of accommodating Airbus A320 aircraft, along with a new passenger terminal designed to handle 1.3 million passengers annually.
The Hindu noted that the Muizzu administration’s proposal comes more than ten years after the controversial exit of GMR from the Maldives.
In November 2012, the cabinet of then-President Dr. Mohamed Waheed terminated the 2010 agreement with GMR to develop and operate the country’s main international airport. At the time, the project represented the largest foreign direct investment in Maldivian history, valued at USD 511 million. The then-Attorney General, Azima Shakoor, argued that the contract was invalid from the outset, and on that basis GMR was given seven days to vacate the airport and leave the country.
Following the removal of the Indian company, the redevelopment of VIA was awarded in 2014 to China’s Beijing Urban Construction Group. The Maldivian government at the time stated that airport management would remain with the state-owned Maldives Airports Company Limited and would not again be outsourced to a private operator.
On 25 October 2016, a tribunal at the Singapore International Arbitration Centre ruled that the termination of the GMR agreement had been unlawful, ordering the Maldivian government to pay USD 270 million in compensation to the company.
