Maytas: alternative mooted

M. Malleswara Rao

State may invoke provisions in deal to appoint another partner in case of company turning insolvent

HYDERABAD: The government will invoke the relevant clause in the agreements signed with Maytas Infra Limited (MIL) and appoint another partner in the consortium as lead player to ensure uninterrupted execution of irrigation projects, if MIL turns insolvent as a result of the Satyam crisis.

The clause providing for such an arrangement has been included in all the agreements signed with MIL and different consortia in which MIL figures as a lead player or partner.

M. K. Rahman, engineer-in-chief, Irrigation (Administration), who was recently asked to list alternatives to prevent stoppage of the projects if a partner, say MIL, or a consortium fails to fulfil the contractual obligations, has finalised his report. He said that under the clause “if the lead company of a consortium fails to fulfil its obligations under the agreement and cure such breach within the period designated by the non-defaulting parties in the consortium, then the other partners shall have the right to take up the work at the cost of the defaulting party”.

No risk

In his report, Mr. Rahman saw no risk to the projects awarded to Maytas for the reason that bills were being paid only for the work done. If Maytas turned insolvent which, however, was impossible, “the other partner in the consortium will be asked to take up. In case of projects which were being implemented by Maytras single-handedly, the bank guarantee furnished by it would be encashed and its EMD forfeited.

He said if the bank concerned did not honour the bank guarantee, the government would approach its ombudsman. “If the ombudsman does not respond we will approach the RBI.”

Work progressing

Meanwhile, feedback provided by chief engineers of the projects being implemented by Maytas have reported to the government that works are progressing at all places as scheduled. Tadipudi Lift, Gundlakamma, Thotapalli have almost been completed, while the work is at a brisk pace on Bhupathipalem project They have not reported any case of Maytas equipment or personnel being unavailable at the project sites.

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