Hyderabad, July 7 (Inditop.com) The Andhra Pradesh government Tuesday scrapped the Rs.12,230-crore Hyderabad Metro Rail contract awarded to a consortium led by Maytas Infra, the firm owned by the family of disgraced Satyam founder and former chairman B. Ramalinga Raju.
Minister of Municipal Administration and Urban Development Anam Rama Narayana Reddy told reporters that the deal was scrapped after the consortium failed to achieve the financial closure even after the government extended the March 17 deadline to July 6.
The deal was scrapped a day after Chief Minister Y.S. Rajasekhara Reddy said the government planned to access funds from Indian Infrastructure Financial Co for executing the project and development of the state’s ports.
Maytas chairman K. Ramalingam met the chief minister last week but could not guarantee financial closure or performance.
Interestingly, the consortium had earlier declined to take any grant from the central government though it had been sanctioned 20 percent of the project cost under the Viability Gap Funding Scheme.
“The Maytas-led consortium is not in a position to take up the project. Hence, all agreements between the consortium and the government now stand cancelled,” the urban development minister said.
The Rs.71 crore that Maytas had paid the government would not be returned, he added.
Maytas and its partners Navbharat Ventures, Ital Thai and IL&FS bagged the prestigious project in a global bid last year after offering to give over Rs.30,000 crore to the government over a 35-year concession period.
The chief minister has now called a high-level meeting July 13 to decide whether to go for global re-tendering or seek central assistance to execute the project.
However, it is unlikely to call fresh tenders as the companies that had unsuccessfully bid for the project are now believed to be no longer interested on account of the slowdown.
The fate of the ambitious 71-km project with 66 stations became uncertain ever since the Rs.7800-crore accounting fraud at Satyam became public in January.
The Maytas-led consortium held 52 percent and the state government 16 percent equity in the Metro project. Within the consortium, Maytas held 26 percent.
The project was was scheduled to have begun in March and completed in four years.
The Metro rail system is expected to carry about 1.7 million passengers a day by 2012 and 2.8 million passengers by 2021.
