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AP may cancel Maytas metro rail project

india Updated: Jan 15, 2009 19:47 IST
Ashok Das
Ashok Das
Hindustan Times
AP may cancel Maytas metro rail project

Andhra Pradesh government is slowly veering round to the idea of canceling the Hyderabad metro rail project (71.16 kilometre long and Rs 12132 crore project) given to the consortium led by Mytas Infra(belonging to Ramalinga Raju family) as the developer is facing financial crisis in the wake of the fraud in Satyam computers.

State Finance Minister K Rosaiah indicated that the government was discussing various alternatives which included discussing with other consortium members to take up the project themselves without Maytas or in the worst scenario floating a fresh global tender.

Another important minister in the Rajasekhar Reddy government told HT that the state cabinet would take a call on the matter on January 29. " There are heavy penalty clauses incorporated in the Concessionaire Agreement signed with the consortium which state has to pay in case the government cancels the project. We are trying to find a way out without getting into legal wrangle," he said.

The Maytas consortium was to achieve financial closure for the metro project by March 18, when it had to pay a performance guarantee of Rs. 180 crore besides showing its equity of about Rs. 4,000 crore and a debt component of Rs. 8,000 crore (1:2 ratio) to be raised from financial institutions.

In the given situation, Maytas , headed by Ramalinga Raju`s son Teja Raju , is finding it impossible to raise the debt and equity.

So far the consortium has paid Rs. 11 crore as the initial amount, besides a Rs. 60 crore bank guarantee.

Meanwhile, all eyes are on the Nampally court, where the bail petition of the Raju brothers and ex-CFO V Srinivas will come up for hearing on Friday.

The SEBI lawyer will also move the court seeking to question Ramalinga Raju. The CID of state police will also move a petition seeking police remand for all the three to question them about the case.