The Hindu : Front Page : Focus on Maytas Infra’s projects

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Wednesday, Jan 14, 2009
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Focus on Maytas Infra’s projects

K. Venkateshwarlu

HYDERABAD: After the embattled Satyam, its most important subsidiary, Maytas Infra’s fate could hang in the balance, with the Andhra Pradesh government ordering “assessment” of its capability to execute Rs. 30,074 crore worth of projects spanning irrigation, roads, rail and ports.

The A.P. government’s review comes in the wake of the Satyam fiasco and the Opposition charge that Maytas Infra was favoured in these projects on the ground that those in high echelons of power had stakes in it.

Corporate Affairs Minister Prem Chandra Gupta too had announced that investigations by the Registrar of Companies and the Securities and Exchange Board of India would encompass Satyam and its seven subsidiaries, including Maytas Infra.

The increasing scrutiny would make it difficult for Maytas Infra to raise resources to deliver such a huge order list, given the beating its credibility took. In fact, Chief Minister Y.S. Rajasekhara Reddy had to step in on Monday to allay fears of a Minister, an MP and an MLA over the capacity of the company to take up works relating to the deep water port at Machilipatnam.

Maytas Infra has witnessed a phenomenal growth in a short span. From a turnover of Rs. 100 crore in 2003, it registered Rs. 223 crore in 2006, Rs. 600 crore in 2007 and Rs. 1,600 crore in 2008. Telugu Desam Party spokesman and Rajya Sabha member M.V. Mysoora Reddy says the sudden rise reflected two aspects — diversion of funds from Satyam to Maytas Infra and the government going out of its way in handing out projects. “It became the fastest growing infrastructure company in the country in a short time of two years.”

Among the Rs. 30,074 crore projects it “won” either on its own or in joint venture with other companies are the now controversial Rs. 12,000-crore Hyderabad Metro Rail, the Rs. 9,222-crore packages of the Pranahita-Chevella Lift Irrigation Scheme and the Rs. 1,590- crore deep water port at Machilipatnam, all during the last six months ending December 2008.

Apart from a slew of irrigation projects, there are the Rs. 120-crore road project on nomination basis, the Rs. 1,800-crore Gautami power, the Rs. 9,900-crore Machilipatnam thermal power and the Rs. 3,375-crore Godavari drinking water scheme.

In favouring Maytas Infra, Dr. Reddy alleges that the government adopted a method of giving it a ‘prior briefing’ on bids and making it a leading partner in joint ventures with its share ranging from 50 to 100 per cent depending on the size of the project. “The tenders were virtually tailor-made for Maytas and difficult for the competitors, all for commissions or benami partnerships.”

But Major Irrigation Minister Ponnala Lakshmaiah refuted these charges and said the department had evolved an elaborate foolproof method of calling tenders and for close monitoring of the progress. Bills were cleared only after a visit by department engineers, inspection by quality cell and third party experts.

Of the Rs. 19,171 crore projects bagged by Maytas Infra, those worth Rs. 4171 crore were in progress, agreements were signed in the case of those amounting to Rs. 11,500 crore.

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