Decisions made and agreements entered into during the administration of former President Mohamed Nasheed, from 2008 to 2012, resulted in billions in financial losses and the obligation for the Maldivian state to pay substantial compensations. Most notable among these was the agreement to hand over the management of Velana International Airport to India’s GMR Group. Following the termination of this agreement, the state was mandated by a Singaporean arbitration tribunal to pay USD 271 million (MVR 4.1 billion) in damages. This remains the largest single financial compensation ever paid by the state in Maldivian history.
Similarly, the state faced significant losses due to the cancellation of an agreement with Noomadi Resorts for the construction of housing units across various islands. This matter was eventually settled out of court, with the state paying the company USD 55 million (MVR 848 million) in compensation. Such decisions meant that the public did not reap the intended benefits of these projects, while the national budget was burdened with unsustainable financial liabilities.
Furthermore, the state continues to incur significant expenses for the security and medical treatment of President Nasheed, both in his capacity as a former president and following the terrorist attack targeting him in 2021. The maintenance of his office and the provision of high-risk security measures represent ongoing, substantial expenditures from the state budget. Considering these factors, the financial implications of President Nasheed’s political decisions and the costs associated with his welfare continue to have a profound impact on the Maldivian state’s finances.
