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Spat and splotch

DEC 29 - The spat has nothing to do with the Nepal airport, lest the title appears confusing. There was a huge outcry following the Infrastructure leasing & Financial Services Limited (IL&FS) “unsolicited” and benign-looking “letter of intent” wishing to take care, of most, if not all, airports in Nepal some months back. The leakage of a suspected backstage deal, led to belated acknowledgement that it was nothing more than a proposal that the Indian company had inadvertently dropped in. There was nothing more to it, the official Nepali denial seem to imply. That, it now seems, was not the end of the story. In barely six months, the Cabinet is reported to have approved the deal against the earlier denial especially when the caretaker is in the brink of being nudged over. We will catch up further on this towards the end.

This piece intends to present a brief overview of events regarding the recent Maldives airport spat. The airport was contracted to operate and modernise under an open bid worth US$ 510m to a consortium backed by the Bangalore based multinational, GMR in 2010. In November this year the Maldivian government abruptly issued an order to the consortium to hand back the airport in a week and pull out its equipment next. The Indian government issued diplomatic displeasure urging the island nation not to proceed with the dismissal order. The discord, initially, was at the lower level and could have been resolved easily save for the typical multinational “ego”. The consortium approached the Singapore court for legal remedy following the eviction notification. In its preliminary ruling in which the court favoured the consortium by barring Maldives from acting unilaterally had the GMR over the moon. India had, otherwise, warned Maldives of withholding US$25m that was in the pipeline, if it dared to disobey.

GMR’s intention to levy airport development and insurance surcharge totalling US$27 per departing passenger, effective 1st January 2012 was the main bone of contention and was justifiably struck down in an earlier Maldives civil court ruling. The president, quite oblivious of the impending overthrow fate, and having soft corner, instead, let GMR deduct the same amount from its own revenues to the government. And the Maldives discovered that it owed about $3.5m to GMR as the consequence.

The new government then initiated a thorough analysis of the agreement based on “technical, fiscal and economic issues” with wise counsel from UK and Singapore lawyers. It concluded that the agreement was “legally invalid, and impossible to further continue” provided the much-needed underpinning that eventually emboldened Maldives in taking the hard decision. On November 6 the Singapore court ruled that the Maldivian claim of acting in the “interest of the nation” was valid and it could, therefore, repossess the airport and annul the agreement.

The inopportune recent development has made the Nepal story far too serious than the largely commercial Maldivian spat. We cannot over emphasise the sensitivity and profound discomfort of a foreign agency having the entire data related to the ins and outs of the only international airport of the country at their disposal. It would have been less so had it just been related to civil constructions. We do not know, at this juncture, how far this “hand over” goes or if it is as wide as the earlier wish list. If so, our northern neighbour, with Tibet underbelly abutting us, would have serious strategic misgivings. The Indian media lost no time in suspecting a Chinese hand in the whole of Maldives affair, a good 3500 Km away from the nearest Chinese port. Do they take the Chinese to be so daft that they would not be bothered? But the Indian involvement in the CIA led Tibet “misadventure”, in the late 50s, (The Post Feb 2, 2010) speaks otherwise.

There are plenty of historical instances showing how weaker nations end up signing unfavourable treaties during periods of instability. Having gone through periods of turmoil, we have had unequal treaties shoved on us. But by continuing the present political impasse for so long we are, perhaps, more responsible in providing spaces for the unscrupulous to play ever boldly to our detriment. Political pundits see nothing wrong with the impasse, while politicians seem to be happy learning the “tricks on the job” by stretching Nepalis’ patience even further. But human patience is not like an imaginary rubber band—one that never snaps, however stretched.

The decision, if true, will eventually end up as a splotch of smelly droppings on the head of a reigning Prime Minister. Stooping low has never been an issue with Nepali politicians. As it seems, preserving vital interests of a country becomes less of a concern when the urge to cling to power becomes obnoxiously overpowering. It is so unthinkable that for a mere NRs 80 million worth of system upgrading works (another report claims it as 168m) our politicians could go the extent of handing and control over access to very sensitive and vital information resources to a dominant neighbour. The work does not appear so big that firms working in the field of software, in the country, cannot handle it. In fact, that would have gone a long way in helping the upcoming industry and earned immense gratitude. But we have had nothing but an over dose of the PM’s Mustang “swaang” so far! It is in the interest of the country and its people that this decision be undone at the earliest. Our politicians should better learn from their Maldivian counterparts that, no matter what, safeguarding basic national interests comes first.


Posted on: 2012-12-30 08:59

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