Govt extends deadline for Maytas projects

Despite the Satyam crisis, Maytas Infra, the listed infrastructure development firm promoted by the eldest son of B Ramalinga Raju, is continuing to get the Andhra Pradesh government decisions in its favour.

The Maytas Infra-China Railway 18 Bureau Group consortium has bagged a project to construct a bridge on the Godavari river between Narsapuram in West Godavari and Sakinetipalli in East Godavari districts in April 11, 2008. The consortium had to tie up funds for the project by January 4 and submit copies of the agreement signed with the financial institutions to the government. This would have paved the way for the consortium to sign a final agreement with the government and commence work on the project.

“Maytas had not yet entered into such agreement. Usually, under such circumstances, contracts stand cancelled. However, the state roads and buildings department has extended the deadline to Maytas by six months,” a state government official said. The government had earlier estimated the project cost to be at Rs 42 crore but subsequently increased it to Rs 66.57 crore.

Ramalinga Raju and his family hold 36 per cent stake in Maytas Infra, while his immediate family owns 35 per cent in the unlisted entity Maytas Properties. In December, Satyam had called off the proposed acquisition of the two companies after institutional investors protested.

The Tirumala Tirupati Devasthanam, the apex body that runs the Lord Venkateswara shrine in Tirupati, has also extended the deadline for the execution of two drinking water projects involving an investment of Rs 100 crore.

“The TTD committee has awarded the two projects to Maytas, which according the the agreement should complete them by September 2007. However, 16 months had passed by and only 70 per cent of the work is completed. The government has extended the deadline for the completion of the project. However, with the recent developments, it is not sure when the projects will be completed,” a source said.

At a press conference, state major irrigation minister Ponnala Laxmaiah said that the irrigation projects taken up by Maytas in the state would not be affected by the Satyam crisis.

The Tadipudi and Bhupatipalem projects that have been awarded to Maytas are on course. Of the Rs 217-crore, works valued at Rs 137 crore have already been completed, he said adding that Maytas, along with nine other partners, has taken up 25 package projects worth Rs 4,171 crore in the state. “Of these, works valued at Rs 1,835 crore have already been completed,” he said.