Business, Economy & Banking Current Affairs - 2019

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Maldives cancels GMR’s $511m airport project

  • Maldives has cancelled a USD 511 million deal with Indian firm GMR.
  • Maldives has also ordered Orders GMR to leave the country within 7 days.
  • India has warned Maldives to honor the legal contract.

Why was the cancellation of GMR project?

Background:

  • The deal b/w Maldives and GMR was inked under former president Mohamed Nasheed’s administration in 2010. This was done via a competitive bidding process conducted by the World Bank’s International Finance Corporation (IFC).
  • As per the contract, GMR had to upgrade and operate the Maldives airport and build a new terminal.
  • On February 7, 2012 Mohamed Nasheed was forced for a resignation as President in a coup d’état. Nasheed’s rival Mohammed Waheed Hassan became the president of Maldives.

Now,

  • Nasheed’s rivals filed a legal action holding the contract with GMR as invalid because the contract contains a $25 airport development charge per outgoing passenger which was not authorized by the parliament.

The cancellation of the GMR contract has raised questions over the future of foreign investment and concerns over investor protection in the Maldives.

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OVL to buy ConocoPhillips’ 8.4% stake in Kashagan field

ONGC Videsh Ltd. (OVL) has finalized agreements for the acquisition of 8.40% Participating Interest (PI) of ConocoPhillips in the North Caspian Sea Production Sharing Agreement (NCSPSA), which included the Kashagan field in Kazakhstan.

Kashagan Field is an offshore oil field located in the northern part of the Caspian Sea close to the city of Atyrau in Kazakhstan. It is the world’s largest current development project.

Why this acquisition is important for OVL and India?

  • It will mark OVL’s entry into the largest oil proven North Caspian Sea of Kazakhstan.
  • OVL’s biggest acquisition.
  • It will contribute towards the India’s energy security.

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