Karnataka serves notice to Maytas on airport projects

February 2nd, 2009 - 11:47 pm ICT by IANS  

Ramalinga RajuBangalore, Feb 2 (IANS) The Karnataka government has served notice to the beleaguered infrastructure firm Maytas Infra Ltd on delay in implementing the two greenfield airport projects at Gulbarga and Shimoga that it had bagged as part of a consortium.According to a belated official note here Monday, the decision to serve the show-cause notice was taken Jan 29 by chief secretary Sudhakar Rao at a review meeting of infrastructure projects in which Maytas and fraud-hit Satyam Computers Ltd are involved.

“Maytas has been served notice on why action should not be taken against it leading to termination of the project development agreement (PDA) with the developers and the consortium members for implementation performance being behind schedule, including non-intimation of financial closure,” the statement said.

The Hyderabad-based Maytas has been given 10 days to respond to the notice, which also referred to the recent developments in Satyam, whose disgraced founder B. Ramalinga Raju had admitted to have committed the Rs.70-billion (Rs.7,000 crore/$1.43-billion) fraud over the years.

Maytas won bids for the two projects in consortium with Nagarjuna Construction Company (NCC) and Vienna international airport arm VIE India Project Development and Holding LLC after the BJP government came to power last year.

Each airport project is estimated to cost the consortium Rs.1.1 billion (Rs.110 crore).

Mytas is headed by Ramalinga Raju’s younger son B. Teja Raju.

Though a listed firm, the Raju family holds 36 percent equity stake in Maytas.

The state government decided to lease the consortium 662 acres of land near Shimoga, the home district of Chief Minister B.S. Yeddyurappa, and 567 acres of land on the outskirts of Gulbarga in the backward region of north Karnataka for the airport projects.

Since the Satyam scam surfaced Jan 7 and Maytas came under scanner of the investigative agencies, the state government has been concerned over the timely completion of the projects though the financial closure is slated for March.

Earlier, Yeddyurappa told reporters Jan 28 that the government would soon call for fresh tenders to ensure the infrastructure projects are completed on schedule.

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