GMR shares dip on back of Civil Court ruling against airport development charge

GMR shares on the Mumbai stock exchange fell 7.57 percent on Thursday on the back of a Civil Court ruling in the Maldives against its proposed US$25 Airport Development Charge (ADC), India’s Economic Times reported.
The paper earlier reported that the share slip had taken the company to a 52-week low, and that that the decision could leave the airport development project facing an annual funding shortage of US$25 million.
GMR said yesterday that it had yet to receive a copy of the Civil Court’s judgement and was only aware of the ruling through media reports.
“We are yet to receive the copy of the judgment and as such we are not in a position to evaluate the implications of the ruling,” the company said in a statement.
“GMR has been permitted to collect ADC and Insurance charge under the Concession Agreement signed between GMR-MAHB, Maldives Airport Company Limited (MACL) and The Republic of Maldives (acting by and through its Ministry of Finance and Treasury), and as such has set up processes for ADC collection from 1st January 2012 supported by an information campaign to ensure adequate awareness,” the company said.
“The bid for the Concession to manage, develop and operate Ibrahim Nasir International Airport for 25 years was conducted by the [World Bank’s] International Finance Corporation (IFC) and the component of ADC was part of the bid. GMR is confident that Government of Maldives will take such measures as would be necessary to honour its contractual obligation in this regard, given that the success of the development of the airport project is of national economic importance.”
The company noted that the payment of a development fee was “a common concept in many airports globally”, particularly as a part of concession agreements where airports are privatised.
10/12/11 JJ Robinson/Minivan News

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Categories: airports Dec 2011, Foreign Dec 2011