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Satyam fiasco could affect Hyd metro rail project
Published on Thu, Jan 08, 2009 at 19:33 in Business section
Tags: Satyam Fraud, Satyam Fiasco , New Delhi
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New Delhi: When the Hyderabad metro rail concession was awarded to a consortium led by Maytas metro, a company promoted by Ramalinga Raju's son, it was hailed by the planning commission as a model for public private partnership.
Not only was the consortium not asking any subsidy, it had offered to pay the government Rupees 13,000 crore over a 35-year period.
But E Sreedharan, the MD of Delhi metro rail corporation, a consultant to the project, had alleged favoritism in the award of the concession, and had persisted with the charges, despite being threatened with a defamation suit by the Andhra finance minister.
“After the pre-qualification of contractors was done, then they changed the whole network by which certain pre qualified contractors gained very much. As a result transparency in the process has been lost,” said MD, Delhi Metro Rail Corporation, E Sreedharan
According to Sreedharan, one of the three lines of the metro had been extended against economic logic, allegedly to flatter the value of a large tract of land.
He was also not in favour of the 12.5 mln square feet of real estate at metro stations and depots being given to the consortium, with which to finance the project, instead of being housed in a government entity.
This he said was like sale of family silver. But the government has made light of the allegations even when the Maytas-Satyam deal fell through, NVS Reddy, MD of the state-owned Hyderabad metro rail said the project would not be affected, that Maytas consortium had appointed 100 consultants and hopefully financial closure would be achieved by end of February.
The award of the Hyderabad metro concession to the Maytas consortium needs to be reviewed not only in the light of allegations of opacity but also because the solvency of the promoter group is in question.
Maytas is a different entity from Satyam but with the credibility of the promoter group dented, it will be difficult to arrange finances and achieve financial closure.
In fact a top official of Hyderabad metro rail has changed his tune and says the Andhra government must review the concession in light of disclosures made by Ramalinga Raju.
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