Maytas projects to bear the brunt

Maytas projects to bear the brunt

Satyam scam may have exposed a fraud but this has put the state’s ongoing projects in limbo

Niranjan Kaggere
Posted On Friday, January 09, 2009 at 01:02:26 AM

The Rs 7,000 crore Satyam scam has not only shaken confidence in the stock market, but has also put a question mark over the execution of nearly half-a-dozen infrastructure projects in Karnataka, including the Shimoga airport in Chief Minister B S Yeddyurappa’s home district.

These mega projects are being executed by Maytas Infra, the sister concern of Satyam Computers. The projects that hang by a thread are that of the development of Shimoga and Gulbarga airports, ground levelling work and construction of interior roads at the Metro Rail Station at Byyappanahalli in Bangalore, construction of power sub-stations and the Jindal-Vijayanagar Industrial Township.

While these projects are yet to start, questions are also being asked over the completion of other infrastructure projects such as the Electronics City Elevated Expressway in which Maytas is a construction partner.

Rs 500-cr investment
“Investments from Maytas in all these projects is close to Rs 500 crore, we are not sure how they will steer ahead now,” a state government official said. The state government still lacks clarity on Maytas’ stand on these projects which comes at a time when the Andhra Pradesh government is weighing options on allowing Maytas to execute the ambitious Hyderabad Metro Rail project.

Airport projects
In Karnataka, Maytas is part of the consortium that succeeded in getting approvals for greenfield airports at Shimoga and Gulbarga, each to come up on 650 acre plots. Maytas was handed over 567 acre of land at Gulbarga at an annual lease rent of Rs 15,111 per acre and 662.38 acres at Shimoga at an annual lease rent of Rs 20,232 per acre. Maytas along with another Hyderabad based Nagarjuna Constructions Company partnered with Vienna International Airport’s arm, VIE India Project Development and Holding LLC and bagged the project competing against 19 other firms. The firms were expected to pump in Rs 100 crore for each project which are scheduled to be completed by 2010.

Breather sought
Now with the fraud exposed, Maytas has sought 15 days time from the state government to make its stand clear about its involvement in these projects. “Financial closure for these projects is yet to be completed. They have gone back as they have to win the confidence of the bankers,” the government official said. On whether the government would take back the projects, the official said,

“As of now, we want them to continue. It is difficult at this juncture, especially in the backdrop of the recession, to find new project promoters.”