Mihaaru has discerned that Tata Housing Development Company of India has the opportunity to go for arbitration if a peaceful resolution cannot be achieved over the termination of the agreement awarding development of flats in two land plots of capital Male to the company.
Former President Mohamed Nasheed’s regime had awarded development of 280 flats under the social housing program in the land plots of the former Gaakoshi and Arabiyya School to Tata Housing. In exchange, the then government had also awarded two other land plots, the former Odion Cinema and Naadhee, for Tata Housing to develop and sell luxury flats.
As an exchange for these projects, the then government had also awarded Lhaviyani atoll Lhossafulhi island to Tata for resort development. However, all of these projects have been nullified as a consequence of the current government's decision to terminate the contract with Tata.
Government has informed Tata of the termination. However, according to Mihaaru's sources, a five-day period must be granted for both parties to reach a peaceful solution. If both sides cannot agree on a solution, the matter could be filed at the Arbitration Centre of Mumbai as per the agreement.
Mihaaru has found out that the Maldives' government is hoping to resolve the issue without having to face trials while Tata is looking to renew the agreement.
Speaking at a press conference held at the Ministry of Housing and Infrastructure on Wednesday, Minister Dr Mohamed Muizzu had stated that the deadline to commence the flat development project in Odion and Naadhee ended three months ago. He said that despite extending the deadline by 90 days, the project remains on hiatus and, thus, the government had decided to terminate the contract.
A formal comment has not yet been received regarding talks for a peaceful solution.
In a press statement released by Tata late Wednesday, the company stated that they are concerned about the termination of an agreement that was followed thoroughly by the company.
In addition, the statement revealed that the Housing Ministry had accepted the new changes brought to their plan and that the company has been closely sharing the updates with the ministry. Tata further added that they have been working to finish the projects as soon as possible.
Recently, the government has lost two major international arbitration cases, including payment of USD 271 million as a result of terminating the agreement with GMR Group of India to run Velana International Airport, and USD 15 million as a result of terminating an agreement with Malaysian company Nexbiz.
The government has already settled the payment to compensate GMR.