AP to review Maytas’ project by mid-July

AP to review Maytas’ project by mid-July
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First Published: Mon, Jun 29 2009. 10 46 PM IST
Updated: Mon, Jun 29 2009. 10 46 PM IST
Hyderabad: A consortium led by Maytas Infra Ltd may lose a contract for the Hyderabad Metro rail project if Andhra Pradesh decides against granting it an extension to achieve financial closure in a July review.
The government plans to review the project by the end of the first week of July or early second week, municipal administration minister Anam Ramanarayana Reddy said over the phone.
“The government will first take a decision on whether to grant extension for financial closure or cancel the project awarded to Maytas Infra consortium,” he said. The consortium failed to achieve financial closure for the Rs12,312 crore project by a 17 March deadline and sought a six-month extension.
The minister said Maytas would have time till the review meeting—to be chaired by chief minister Y.S. Rajasekhara Reddy—to achieve the financial closure.
Maytas is promoted and headed by B. Teja Raju, eldest son of B. Ramalinga Raju, founder of fraud-hit Satyam Computer Services Ltd.
A government official close to the development said the options being considered by the government include extending the deadline for the financial closure; asking Maytas’ project partners to restructure the equity make-up among themselves to expedite financial closure; inviting other bidders who had lost the bid to take up the project in a joint consortia with all eligible bidders; scrapping the award given to the Maytas-led consortium; calling for fresh bids, or taking up the project with funding support from the Union government. He spoke on condition of anonymity.
Maytas’ partners in the consortium are Hyderabad-based ferro alloys and power producer Nava Bharat Ventures Ltd, Infrastructure Leasing and Financial Services Ltd (IL&FS) and Thailand’s civil infrastructure firm Italian-Thai Development Public Co. Ltd (Ital Thai). Maytas owns 26% in the group, Nava Bharat Ventures, 16%, and IL&FS and Ital-Thai hold 5% each. The state government plans to take an 11% stake in the project and hand over 37% stake to potential financial partners.
Maytas chairman K. Ramalingam said the firm has some more time to achieve financial closure. “These details are confidential between the company and the government,” he, however, said by the phone.
Ved Jain, a government-nominated director on Maytas’ board, and V.V. Rama Raju, the firm’s chief financial officer, said they were not aware of any extension.
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First Published: Mon, Jun 29 2009. 10 46 PM IST