Maytas may lose H'bad Metro project

Even as the Satyam’s financial fraud case is acquiring a political hue, the Andhra Pradesh government is now studying alternatives, including calling fresh bids or replacing the consortium partners, for the Rs 12,000-crore Hyderabad Metro Rail project.

A senior official privy to the happenings about the Satyam and Maytas issues told Business Standard on condition of anonymity, “The government will not back off from terminating the contract with Maytas if it did not achieve the required legal milestones as agreed.” These come into picture if the Maytas-led consortium, comprising Nava Bharat, Ital Thai and IL&FS, fails to achieve financial closure for the project by March 2009.

Satyam founder Ramalinga Raju and his family own a little over 36 per cent stake in Maytas Infra — a listed entity run by B Teja Raju, the elder son of Ramalinga Raju. It is also learnt that the government is reaching out to the other consortia, which lost the metro rail project to the Maytas-led consortium. However, for a new proposal, the government might need to provide the viability gap funding as estimates would be revised.

When asked if there are efforts to disengage Maytas from the metro project in view of the current developments at Satyam, NVS Reddy, managing director of Hyderabad Metro Rail Corporation, the nodal agency implementing the project, said, “It is up to the government to take a decision on this issue.’’

Four consortia made the financial bids for the Hyderabad Metro Rail project, which were opened in July 2008. The Essar-led consortium, the highest bidder, sought a Rs 3,100 crore grant. The Reliance Infra-led consortium, the second-highest bidder, sought Rs 2,811 crore, while Magna Allmore-led consortium sought ‘zero’ grant and offered a negative viability gap funding of Rs 152 crore (to the government).

The Maytas-led consortium offered to pay Rs 30,311crore over 35 years of the concession period. When discounted at 13.5 per cent prime lending rate, the net present value worked out to Rs 1,240 crore. Maytas had presented a Rs 150-crore cheque to the state government when the project was awarded to them.

It is estimated that about 1.6 million passengers would use the metro rail in 2011 and 2.6 million per day by 2021.