The Andhra Pradesh government has scrapped its 10-month-old agreement with Maytas Infrastructure-led consortium for the implementation of the prestigious Rs 12,230-crore (Rs 122.390 billion) Hyderabad Metro Rail Project.
A formal decision was taken by the Y SRajasekhara Reddy government on Tuesday after several months of uncertainty which began with the massive financial fraud in Maytas' parent company Satyam Computers coming to the light earlier this year.
The minister for municipal administration and urban development Anam Ramanarayana Reddy told the media that the decision to scrap the deal was taken in view of the failure of the consortium to reach a financial closure even after the expiry of the two deadlines.
The original deadline had expired on March 17, but it was extended to July 6 by the government in view of the problems in Maytas Infrastructure.
"It is clear that the Maytas-led consortium is not in a position to take up the project1. Hence, all agreements between the consortium and the government now stand cancelled", the minister said adding that the Rs 71 crore (Rs 710 million), Maytas had paid to the state government as advance towards the revenue from the project would not be returned by the government.
Maytas Infrastructure is promoted by T Teja Raju, one of the two sons of B Ramalinga Raju, the tainted founder chairman of Satyam Computers. The Satyam Computers as well as the Maytas companies of his two sons came in the grip of a major crisis after Raju confessed his involvement in the over Rs 7,000-crore (Rs 70 billion) scam in Satyam and surrendered to the police.
Ramalinga Raju, his younger brother Rama Raju along with other officials of Satyam computer continues to be in jail and the case is pending in the court.
The government had signed the agreement with the concession comprising of Maytas Infra, Navbharat Ventures, Ital Thai and IL&FS on September 19 last year as the consortium not only did not demand any grant from the government to implement the project but also offered to pay a revenue of Rs 30,000 crore (Rs 300 billion) over the period of 35 years, outbidding four other competitors and leaving every body surprised.
In the Maytas Metro project the consortium had 52 per cent stake and the state government 16 per cent.
Within the consortium, Maytas held 26 per cent and company had tried to sell part of it to the other companies to raise the funds.
The project, which was scheduled to be completed in four yeas, was planned to carry 17 lakh (1.7 million) passengers a day by 2012. It was to be 71 km long and was to have 66 railway stations.
