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PowerGrid unwilling to give more funds to Maytas

PowerGrid unwilling to give more funds to Maytas
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First Published: Thu, Jul 16 2009. 10 03 PM IST
Updated: Thu, Jul 16 2009. 10 03 PM IST
New Delhi/Hyderabad: State-owned Power Grid Corp. of India Ltd (PGCIL), which had earlier considered revoking seven rural electrification contracts awarded to Maytas Infra Ltd, is unwilling to give additional advance funds to the firm till it can show some progress.
The ministry of corporate affairs has advised PowerGrid to release the funds required for two projects as per the contract, Maytas said in a statement on Thursday.
The projects, worth a combined Rs395 crore, were awarded to Maytas Infra in Orissa and West Bengal under the Union government’s rural electrification programme called Rajiv Gandhi Grameen Vidyutikaran Yojana.
“We had given them an advance of Rs30 crore against a bank guarantee of the same amount. However, we found that work for only around Rs18 lakh was done,” said a top PGCIL executive asking not to be identified. “Depending upon the satisfactory completion of work, we may award them more work. But there is no question of giving any more advance to them.”
Maytas Infra, in which promoters of the fraud-hit Satyam Computer Services Ltd hold a 36.44% stake, has recently lost some big contracts, including the Rs12,312 crore Hyderabad Metro rail project.
“MCA, after reviewing various steps taken by Maytas, has recommended that PGCIL should allow the company to work and also release the payments,” Maytas said.
“Our board has decided that if they (Maytas) guarantee the financial security of the firm, availability of trained manpower at the site and adhere to the schedule, they can restart the work,” the PowerGrid executive said.
Any delay in the electrification work will further affect the United Progressive Alliance government’s already faltering rural electrification programme, which had a target of providing electricity to 125,000 villages and connecting 23 million poor households by 31 March.
utpal.b@livemint.com
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First Published: Thu, Jul 16 2009. 10 03 PM IST