The fate of the prestigious Hyderabad Metro Rail Project has become uncertain after the Centre decided to take over the Maytas firms. Maytas Infrastructure Limited,headed by Teja Raju,elder son of B Ramalinga Raju,had bagged the Rs 12,132 crores project last August.
The Maytas consortium’s model of public-private partnership was dubbed by the Andhra Pradesh Government as innovative and unique based on a design,build,finance,operate and transfer of the 71-km long metro rail. The consortium comprises Navabharat Ventures Limited,Maytas Infra Limited,Italian-Thai Development Public Company Limited and Infrastructure Leasing and Financial Services Limited.
Though the consortium is still intact,Maytas Infra was finding it hard to achieve financial closure. “The state Government felt that Maytas had time till March 31 to achieve financial closure but the firm is in trouble after Ramalinga Raju revealed the Satyam fraud. Now that the Centre has taken over,the project becomes uncertain because it will take time to complete the legal formalities to hand over to a new board to be appointed by the Centre,” an official of Hyderabad Metro Rail said on Wednesday.
The project had courted controversy right from the beginning. E Shreedharan,MD of the Delhi Metro Rail Corporation,had expressed reservations and doubts over the viability of the project.
As per Maytas model,the Andhra Pradesh Government didn’t have to spend a single penny on the project. Instead,the Maytas Metro Limited which would have spent Rs 12,132 crores to build the elevated metro rail would also have paid the Government for being allowed to execute the project. Over the 35 years concession period of the project,Maytas would pay the state Rs 30,311 crores as a payback: Rs 11 crores on signing of the agreement,Rs 50 crores on achieveing financial closure,Rs 200 crores in the fourth year,Rs 100 crores a year from seventh to ninth year and,Rs 1,750 crores from 18th to 34th year.
The Maytas hoped to generate its revenues by developing prime real estate and leasing space for commercial use along the elevated project: at stake was nearly 18 million square feet of virtual space or 269 acres available at 66 stations and three depots along the 71-km metro rail. Maytas planned to develop shopping malls,multiplexes,residential apartments,office spaces etc within the applicable laws,and give them on lease. After Shreedharan’s comments,the HMR ended the contract with the DMRC as its prime consultant.