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… The Air Controversy GMR & Maldives -case study

analysis…Presentation By:Sanjay Kumbhar (Roll No 107)Athira Nair (Roll No 79)Pradip Nevarekar (Roll No 108) Rachita Jain (Roll No 67)Namita Shinde (Roll No 72)Madhu Jaiswal (Roll No 80)J.Ranjam (Roll No 120)

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… The Air Controversy GMR & Maldives -case study

analysis…*** Flow of Presentation ***

Introduction - Rachita

Bidding Process -Pradip

Award of Contract -Namita

What Went Wrong? – Athira

Perception from Maldive Govt.- Ranjan

Perception from Indian Govt.– Madhubala

Arbitration claim- Sanjay

Conclusion

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… The Air Controversy GMR & Maldives -case study

analysis…*** Introduction ***

• Introduction

• Reason

• Purpose

• FAA with IFC & World Bank

• Contents of FAA

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… The Air Controversy GMR & Maldives -case study

analysis…*** Bidding Process ***

competitive bidding process.

1- IFC agreement 28/7/09

2- Transaction Structure Report

3- Announcement 6/10/09

4- EOI acceptance

5- Sending RFQ 23/12/09

6- Pre-qualification Application acceptance 17/1/10

7- Pre-qualification evaluation 20/1/10

8- Sending of RFP/IM 18/3/10

9- Bid opening 20/6/10

10- Bid Evaluation 24/6/10

11- Signing the agreement 28/6/10

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… The Air Controversy GMR & Maldives -case study

analysis…*** Award of Contract ***

Introduction- GMR & MAHB.

Contract Duration- 25 years

Contract Value- $511 million

Terms & Conditions- ADC

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… The Air Controversy GMR & Maldives -case study

analysis…*** What Went Wrong in Male ? ***

Socio- Politico-Economic-Dynamics

New Delhi’s Blunder

GMR

Arrogance

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… The Air Controversy GMR & Maldives -case study

analysis…*** Perception of Maldive Govt. ***

Failure to renegotiate terms

Not a valid agreement,“

ADC not authorised by the parliament.

Non-reversible & Non-negotiable decision

Deter potential investors - down a path to economic ruin.

GMR’s due diligence

Fooled and cheated.

Illegal

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… The Air Controversy GMR & Maldives -case study

analysis…*** Perception of Indian Govt. ***

Very negative signal to foreign investors & international

community

Freeze $25-million annual aid to the country

We are not happy

Impact on our bilateral ties

Maldivian foreign minister Abdul Samad Abdullah, Salman

Khurshid & Prime Minister Manmohan Singh

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… The Air Controversy GMR & Maldives -case study

analysis…*** Legality & Arbitration ***

Maldives terminates GMR's airport contract (27th Nov’12)

The airport was taken over by the Maldives Airports

Company Limited after a high-voltage legal tussle in which

GMR had initially got a stay order on the termination from

the Singapore High Court.

GMR approach Singapore court against Maldives Govt ,

claims $800 Million

Feels Cheated -contract cancelled over an illegal component

–ADC

Agreement had stated that GMR should be given a 30-day

notice of termination, the government believed that it need

not be followed since the contract was void.

The government has given a seven day notice to GMR to

leave the airport,“.

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… The Air Controversy GMR & Maldives -case study

analysis…*** Conclusion ***

June 17, 2013- GMR gets clean chit from Maldives probe agency in Male airport case because i) Concrete record on the concession agreement.& ii) No corruption was found in the bid evaluation ph

June 21, 2013- GMR sue has sought a compensation of $1.4 billion for the “wrongful termination” of its 25-year contract to develop and operate the Male International Airport. The figure of $1.4 billion was reached after taking into account loss of profit, payments made to sub-contractors besides others.

Sept 21, 2013 MALE (MALDIVES)-  Maldives Govt welcomes & encourages FDI- Foreign Direct Investment, but differed on the issue of the ousted Male airport operator GMR.

Wrong Signal, Image Damage, Power to economy- Tourism, the country is desperately trying to attract FDI for building its infrastructure. It can hardly be disputed that treating the largest FDI investor in such a manner is likely to send all the wrong signals about the investment environment in the country.

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… The Air Controversy GMR & Maldives -case study

analysis…