Plans derailed

Hyderabad, June 18: The Andhra Pradesh government has decided to cancel the Rs 12,200cr contract awarded to a Maytas Infra-led consortium for the Hyderabad metro rail project.

However, Maytas, which is owned by the relatives of Satyam founder B. Ramalinga Raju, is confident that the deal is on.

Andhra health minister Danam Nagender, who holds additional charge of the Hyderabad region, said the Andhra Pradesh Industrial Infrastructure Corporation Limited had been directed to start a global re-tendering process.

“Maytas had sought a six-month extension for financial closure of the project in March. But the government has been silent about it because of the ongoing investigations into fraud-hit Satyam,” the minister said.

However, Maytas Infra denied the news. “We have no information on the dumping of the project deal or global re-bidding,” said a company spokesperson.

“Maytas Infra is committed to complete this prestigious project and all steps towards its financial closure are being taken,” the company said in a filing to the Bombay Stock Exchange.

C.V.S.R.K Sharma, the chairman of the Hyderabad metro rail project, has also denied the cancellation of the Maytas deal.

“The issue is pending with the chief minister’s office,” he said.

Maytas Infra had twice failed to meet the deadline for the financial closure of the project and could not furnish a bank guarantee of Rs 240 crore. The company stands to lose Rs 60 crore as sign-up money it had paid in July 2008 if the government proceeds with a fresh tender.

Maytas had bagged the project in a collaboration with Navbharat Ventures, Ital Thai Development Public Company and IL&FS in July 2008.

The consortium had offered to pay the government an annual revenue of Rs 1,350 crore after 35 years and was granted rights to use 296 acres of prime land.

The project entailed the construction of a 71.6km elevated rail system and a three-corridor rail track in Hyderabad by 2011. The two other bidders in the race were consortiums led by GVK and Reliance, which had asked for grants of Rs 2,811 crore and Rs 3,100 crore, respectively.

Maytas had won the bid as it did not seek any grants, while offering more revenue to the government.

Karnataka move

The Karnataka government today terminated its agreement with Maytas Infra Consortium, a firm promoted by Ramalinga Raju’s son, for building airports at Gulbarga and Shimoga.

Urban development minister S. Suresh Kumar said, “Even after two months, Maytas did not embark upon any significant effort to prove that it had the capability to execute the projects. Hence the government decided to terminate the agreements on airport projects.”

Mahindra open offer

Tech Mahindra has received approval from the US anti-trust authority regarding its Rs 1,154-crore open offer for the purchase of an additional 20 per cent stake in Satyam Computer. The anti-trust approval in the US was needed as both Satyam and Tech Mahindra have technology outsourcing work in the US, and also because Satyam is listed on the NYSE.