Andhra government rejects demand for probe in Maytas deals

January 18th, 2009 - 10:41 pm ICT by IANS  

Ramalinga RajuHyderabad, Jan 18 (IANS) The Andhra Pradesh government Sunday ruled out a probe into the public projects awarded to Maytas Infra, the company promoted by a son of disgraced Satyam Computer Services founder-chairman B. Ramalinga Raju.State Finance Minister K. Rosaiah told a news conference here that there was no need for a probe as the works were awarded in a transparent manner and that the government had placed all the facts before people.

He also said the government was alert to the development and would “wait and see”. “We will not act in haste by cancelling the projects awarded to Maytas as this will incur losses to the government and harm the state’s interests.”

“There is no necessity for a probe at all. I have given every information available with the government,” Rosaiah said on the opposition’s demand for a thorough probe into Rs.300 billion (Rs.30,000 crore or $6.24 billion) worth of works awarded to the infrastructure company, or the consortia in which it is a partner, during last four years.

“There is the Right to Information Act, they can seek required information,” he remarked while rejecting the demand of opposition parties that the files related to the agreements signed with Maytas be placed before them for scrutiny.

“The government will not cancel any project in haste. The government’s duty is to wait and see. If a work is awarded to a company and it deposits EMD (earnest money deposit), the government can’t cancel the same without sufficient grounds. The contractor can sue the government and it would have to pay heavy penalty,” Rosaiah said.

The works awarded to Maytas or to various consortia include the Rs.122 billion Hyderabad Metro Rail Project, the Rs.15.9 billion all-weather deep water port at Machilipatnam and various irrigation works worth Rs.160 billion.

Maytas came under cloud after Ramalinga Raju admitted Rs.70 billion (Rs.7,000 crore or $1.43 billion) fraud in Satyam. There are allegations that he diverted the money to the company owned by his son B. Teja Raju.

“There are other partners with Maytas. They are jointly and individually responsible as per the agreements signed with them. If one backs out, others may come forward to execute the works. The government will then take a decision,” Rosaiah said.

“There is a method to award the projects and there is a method to cancel them. We will not sustain losses while cancelling them. We have to take every step carefully,” he said.

Since financial closure for Hyderabad Metro and Machilipatnam Port is due in March, he said the government can cancel the agreements if the consortia fail to achieve the same.

Rosaiah clarified that this applied to all the projects awarded to Satyam, Maytas Infra and Maytas Properties. The projects also include three special economic zones (SEZs) being developed by Maytas Properties in and around Hyderabad.

Denying that the Congress government had favoured Maytas, the finance minister pointed out that it was the previous Telugu Desam Party government which had awarded more works to Maytas.

“During 1999-2004 when TDP was in power, Maytas was awarded Rs.278.47 crore (Rs.2.78 billion) or 12.2 percent of the total works (Rs.2,285.32 crore) awarded to all the companies while the this government has awarded Rs.5,430 crore worth of works or 6.8 percent of all the works (Rs.79,418 crore).”

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