HYDERABAD: The elevated metro rail project for the twin cities is doomed. With the Maytas-led consortium, the selected developer, facing a bleak future following the Satyam Computer Services scandal, there is little chance of the project taking off.
While the government claims to be reviewing the consortium’s capability to take up the project under the public, private partnership (PPP) mode, it is now clearly waiting for Maytas to blink first. The other option is to wait till the financial closure on March 18 when Maytas not only has to pay a performance guarantee of Rs. 180 crore, but also show its funds inflow and outflow to build the metro rail.
Financial closure would mean that the consortium has to show its equity around Rs. 4,000 crore and a debt component of Rs. 8,000 crore (1:2 ratio) to be raised from financial institutions. Considering the unfolding financial fraud involving Satyam, Maytas could find it extremely difficult to raise the debt and equity component as it is headed by Teja Raju, son of B. Ramalinga Raju, former chairman of scam-hit Satyam.
“It will be very difficult to raise even Rs. 100 crore for the consortium after the Satyam imbroglio,” affirm official sources.
Penal clauses
The government seems disinclined to cancel the deal unilaterally considering penal clauses in the Concessionaire Agreement signed with the consortium of Maytas, Navabharat Ventures, Ital Thai and IL&FS. With general elections notification expected soon, nothing is likely to happen on this front till the middle of next year.
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