GMR issue jeopardises Indian aid to Maldives

The cancellation by Maldives of an airport development contract with India's GMR, worth $500 million, has certainly vitiated relations between the two countries.

External affairs minister Salman Khurshid said in an interview with a TV channel on Thursday that it was a major setback in bilateral relations between the two countries.

The contract was cancelled after a new government in the Indian Ocean archipelago decided it was illegal. It gave GMR personnel seven days to get out of the country, as reported in domain-b earlier.

Khurshid said the safety of Indian nationals was a prime concern; but at the same time he struck a diplomatic note saying the incident should not permanently sour the long-term relationship between the two countries.

A report in The Hindu says India will consider whether to proceed with its generous aid package to Maldives after its government disregarded New Delhi's pleas and decided to cancel the contract given to a GMR-led consortium for managing the airport in Male.

''For the time being, we have to consider how things stand and how to proceed,'' the newspaper cited an unnamed official source as saying when asked whether India would continue assisting the Maldives in combating its financial difficulties, including paying salaries to civil servants and shoring up the surveillance and reconnaissance ability of its security forces.