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Embarrassed,YSR in Delhi to save Hyderabad Metro

With the prestigious Hyderabad Metro Rail project in jeopardy,Andhra Pradesh Chief Minister Y S Rajasekhara Reddy has rushed to New Delhi....

Written by Sreenivas Janyala | Hyderabad |
June 20, 2009 3:58:39 am

With the prestigious Hyderabad Metro Rail project in jeopardy,Andhra Pradesh Chief Minister Y S Rajasekhara Reddy has rushed to New Delhi to save the project. The project has become an embarrassment for the Government as cash starved Maytas,which got the contract last August,is unable to start work.

The Government is yet to decide on whether to cancel the contract and issue fresh tenders or restructure the agreement to provide Maytas with tax-payers money to execute the project. “No decision has been taken yet. The matter is pending with the Chief Minister,” Hyderabad Metro Rail (HMR) Chairman and Principal Secretary,Municipal Administration Dr C V S K Sarma said. HMR sources said the Government is cold to re-tendering as it would increase the cost manifold. “Besides,none of the other qualified bidders are interested in taking up the project now,” HMR officials said.

Hence the most viable option,sources in the Municipal Administration Department said,is to restructure the agreement with Maytas. “Instead of cancelling the contract,the Government may rewrite the agreement. The negative viability gap funding concession agreement by which Maytas agreed to pay the Government Rs 33,000 crore over a period of 35 years is likely to be done away with and the government may agree to fund the project. For that the state government will need funds from the Centre,” an official said. Reddy is likely to discuss the issue with Prime Minister Dr Manmohan Singh and Union Urban Development Minister S Jaipal Reddy.

Maytas,on its part,claims that given more time it can still pull off the project. It said the Government is yet to decide on its request for a 180-day extension to achieve financial closure. “The new board of government-appointed directors did not have any discussions with the government about cancellation of the contract. The government has not yet informed us of any decision it has taken,” a Maytas spokesperson said.

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Besides seeking funds for the Metro project,the CM is likely to ask the Centre for money to fund at least four populist schemes including Rajiv Arogyasri,the health insurance scheme,which requires the Government to clear hospital bills to the tune of Rs 1,000 crore. He may even request the PM to make it a Centre-sponsored programme,sources said.

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First published on: 20-06-2009 at 03:58:39 am

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