The Hindu : Front Page : Rajasekhara Reddy announces second probe into capability of Maytas Infra

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Monday, Jan 12, 2009
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Rajasekhara Reddy announces second probe into capability of Maytas Infra

S. Nagesh Kumar & Ravi Reddy

— Photo: PTI

Andhra Pradesh Chief Minister Y.S. Rajasekhara Reddy addresses the media in Hyderabad on Sunday.

HYDERABAD: Andhra Pradesh Chief Minister Y. S. Rajasekhara Reddy had to eat his own words at a press conference here on Sunday when he announced a second inquiry in four days by the Chief Secretary into the capability of Maytas Infra to execute projects worth thousands of crores of rupees in the irrigation and other sectors.

On New Year’s Day, that is two weeks after then Satyam chairman B. Ramalinga Raju created a stir in the corporate sector by announcing acquisition of Maytas Properties and Maytas Infra, Dr. Reddy batted for the group when he said, “Satyam’s problems have nothing to do with us.” These, he asserted, were purely internal problems and announced there was no proposal to review the agreement with Maytas for execution of the Hyderabad Metro Rail project, one of the biggest projects of its kind in the country in the public-private partnership mode.

When Dr. Reddy made this statement, the reputation of Satyam Computer had already taken a beating following the World Bank’s decision to debar the IT major “for providing improper benefits to Bank staff and for failing to maintain documentation to support fees charges for its sub-contractors.” The Bank had also alleged that Satyam indulged in data theft while doing business with it for eight years.

The magnitude of the crime changed completely on January 7 when Mr. Raju confessed to defrauding the company to the tune of Rs.7,000 crore. Dr. Reddy, who was in New Delhi attending a conference of Chief Ministers, said he had asked the CID to launch a preliminary inquiry and Chief Secretary P. Ramakanth Reddy to review the gamut of projects.

By then, a proper response from the government was of paramount importance since Maytas Infra, which virtually enjoyed “a most favoured company status,’ was executing projects, either on its own steam or in consortia, whose cumulative cost was close to Rs.30,000 crore. These projects are in sectors such as irrigation, metro rail, deep sea water port and power.

Dr. Reddy said on Sunday that the Chief Secretary had found no irregularities in the allotment of the Metro Rail Project, the Machilipatnam Port and various irrigation projects to Maytas.

Transparent process

He said the bids were finalised in a transparent manner in the presence of State and Central government officials. Yet, he had asked the Chief Secretary to once again verify whether Maytas had the capability to complete the ongoing projects and the financial strength to launch the new ones. If it did not, the government would evaluate the situation and explore available options to ensure their completion on time.

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