Orissa power project faces trouble for Maytas link

January 21st, 2009 - 7:48 pm ICT by IANS  

Ramalinga RajuBhubaneswar, Jan 21 (IANS) A proposed power project in Orissa has run into trouble over the promoter company’s links with Maytas Infra, a senior official said Wednesday.The state government has put on hold the process of land acquisition and water allotment for the project and asked the company, KVK Nilachal, a subsidiary of Hyderabad-based KVK Energy, to furnish details of its link with Maytas Infra - controlled by one of the sons of scam-tainted Satyam Computer founder B. Ramalinga Raju.

“The land acquisition process has been put on hold. There will be no progress until the company gives a firm commitment it is financially sound to develop the project,” energy department secretary Pradip Kumar Jena told IANS.

KVK Energy is setting up 1,050 MW coal-fired power project in Cuttack district, some 30 km from here, through KVK Nilachal. The Rs.5,000-crore (Rs.50-billion) project will come up in three phases.

The company has said Maytas is a joint venture partner for only the first phase, which involves construction of a 300 MW plant.

But the state government has now asked KVK Nilachal to state clearly whether it planned to include Maytas in the second and third phases, and whether it would be able to arrange for funds from elsewhere.

“The company officials met me on Tuesday and I asked them their position on the matter. The documents they showed were not satisfactory,” Jena said.

“They said they will have a meeting with investors on January 23. They requested more time and we have give it to them. However, everything will be on hold till they come with favourable documents.”

The KVK Nilachal is to commence construction work on the first phase in the second half of 2009. The entire project is expected to be complete by 2011.

The project requires some 1,100 acres of land including some 700 acres from the government. According to Jena, KVK has already acquired about 300 acres of private land and ordered machineries to begin work on phase one. No government land has been allotted as yet.

There is more trouble brewing for Maytas Infra in Orissa, with the state government announcing it would review all government projects awarded to the beleaguered company in the State.

Maytas had bagged several irrigation and port projects, which include construction of an earthen dam, a concrete dam and the headrace tunnel for the Upper Indravati Hydro Electric Project in Kalahandi district.

The infrastructure company also lost a contract from Vedanta Alumina to develop an integrated township in Orissa last week.

Maytas was awarded the contract in 2007 to develop the township in Jharsuguda district in western Orissa on an investment of about Rs.233 crore (Rs.2.33 billion).

The integrated township is proposed to be spread over about 70 acres and accommodate about 700 families.

After the Satyam scam broke out, banks froze all accounts of Maytas, which is now unable to pay its contractors and suppliers.

Vedanta spokesperson Shashanka Pattnaik said they terminated the contract after they found there was little progress in the work.

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