Maharashtra Govt scraps Rs 480-crore Maytas contracts | business | Hindustan Times
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Maharashtra Govt scraps Rs 480-crore Maytas contracts

The Maharashtra Govt has decided to withdraw the contracts that its power company had awarded to Maytas Infrastructure, an infrastructure firm owned by the family of Raju, founder of the embattled Satyam, reports Dharmendra Jore.Satyam sinks

business Updated: Jan 22, 2009 00:40 IST
Dharmendra Jore

The Maharashtra government has decided to withdraw contracts worth Rs 480 crore that its power company had awarded to Maytas Infrastructure, an infrastructure firm owned by the family of B. Ramalinga Raju, founder of the embattled Satyam Computer Services.

Chief Minister Ashok Chavan said the Cabinet took the decision on Wednesday. “We asked the [Maharashtra State Electricity Distribution Company, or MSEDC] to withdraw the contracts immediately and award it to some other competent company,” he said.

Raju had earlier this month admitted to a Rs 7,000-crore fraud in which he also attempted to buy out Maytas to shore up Satyam’s account books. Doubts were raised about Maytas’ financial position after the fraud became public.

HT had reported that MSEDC would assess the progress made by Maytas, which had won bids last September to build sub-stations and lay transmission lines in Ahmednagar division, worth Rs 265.9 crore, and in Beed-Nanded division, worth Rs 214.76 crore.

An MSEDC source who requested anonymity said the project was likely to go to the bidder who had finished second. “Or, we may issue fresh tenders,” said an official.

Referring to the land given to Satyam at Nagpur’s Multi-Nodal International Hub and Airport (MIHAN), Chavan said there were no irregularities in the allotment. He said Satyam got the land at a lower rate because it was an ‘anchor tenant’ — one of the first investors in a developmental project for which the government invites investors.

“Still, I will ask the authorities concerned to make inquiries and take action in case of irregularities,” said Chavan. Former bureaucrat RC Sinha, managing director of Maharashtra Airport Development Company, which is developing MIHAN on the government’s behalf, was accused of favouring Satyam because he was also the non-executive chairman of Maytas. Sinha refuted the charge.