AP grants Rs 121crore project to Maytas Infra

The Congress-led government in Andhra Pradesh has sanctioned a Rs 121-crore project to Maytas Infra, barely two days after the founder and chairman of Satyam Computer Services B Ramalinga Raju’s scuppered bid to buy infrastructure firm run by his son Teja Raju.

The state has issued an order on Saturday sanctioning funds for the road project in Kadapa, the constituency of Andhra Pradesh chief minister YS Rajasekhara Reddy. The order said that the project was awarded to Maytas Infra on a nomination basis and funds will be provided by the state’s irrigation department.

Simply put, there was no bidding for this project, a 30-kilometre road between Mangapatnam and K Sugumanchipalli in Kadapa on state highway 31. The road is meant to provide connectivity to an irrigation project being executed by Maytas Infra.

“I am not aware of the details of the government order,” said principal secretary (irrigation) SK Joshi.
A company spokesperson said Maytas Infra has been awarded the project to construct a new road to replace the existing road. The new road project has to be completed by June 2009, he said. The sanction of funds to Maytas Infra could spark off a controversy, coming as it does just two days after Satyam’s failed bid to pick up a 51% stake in the company.

According to unconfirmed reports last week, Satyam had proposed the deal since some of the promoters and their investment firms had faced margin calls from financiers after having borrowed against stocks.

VV Raju, chief financial officer, Maytas Infra, had said last week that the company had no issues regarding working capital requirements and no immediate capital expenditure needs.

Maytas Infra is the consortium partner in the Rs 12,000-crore Hyderabad Metro Rail project. The company had floated a special purpose vehicle in September last to execute this project. But the project became controversial after the Delhi Metro Rail Corporation chief E Sreedharan had labelled it “a future political scam” and questioned its operational viability. The Hyderabad Metro Rail has since snapped ties with the prime consultant DMRC.

Incidentally, the president and chief executive officer of Maytas Infra PK Madhav was arrested last week on charges of an alleged financial fraud in a different case unrelated to Maytas Infra.