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Maldives defends scrapping India airport deal

Published on Nov 28, 2012 12:38 PM

COLOMBO (AFP) - The Maldives defended its controversial decision to terminate an airport management contract with an Indian firm, saying the deal was dogged by "legal, technical and economic issues".

President Mohamed Waheed's government gave five days to GMR Group to leave after prematurely ending the 25-year lease of the nation's main international airport for a one-time fee of $78 million and revenue share thereafter.

The government said on Wednesday it was advised by unnamed British and Singaporean lawyers to abrogate the agreement, prompting India to warn that the move could scare away foreign investors from the archipelago.

"The cabinet decided to terminate... on grounds that there were many legal, technical and economic issues regarding the agreement, and that it was legally invalid, and impossible to further continue," Mr Waheed's office said.

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