AP terminates metro contract with Maytas

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Hyderabad: The Andhra Pradesh government has terminated the Rs 12,000-crore-plus contract awarded to Maytas Infra for the Hyderabad Metro Rail project for reneging on contractual commitments.

Andhra Pradesh chief minister YS Rajasekhara Reddy in a statement on Tuesday announced the state’s decision to cancel the concession agreement with Mytas Metro Ltd, the special purpose vehicle formed to execute the project.

The contract for the Metro Rail Project was awarded to a Maytas Infra-led consortium in a global tendering. The other consortium members were Nava Bharat Ventures Ltd, Italian-Thai Development Public Company Ltd and Infrastructure Leasing & Financial Services Ltd.

The Rs 12,132-crore tender for developing a 71.16-km fully elevated metro railway project was awarded to the consortium on a design, build, finance, operate and transfer (DBFOT) basis.

Maytas Metro was bound to declare the financial closure and submit a performance guarantee of Rs 240 crore by March 17, 2009. However, the company, in deep financial difficulties after the infamous Satyam episode, could not honour this commitment.

Maytas Infra has a 26% stake in Maytas Metro, while Nava Bharat has 16% and Italian-Thai and IL&FS has 5% each.

Besides, the consortium holds a 37% stake in the SPV. The remaining 11% is held by the state government.

Reddy said the priority would now be to put the project back on rail, complete with definite milestones.

He has asked the officials to work on all other options available for the project, like government-run and PPP models. "Due to the election code and the formation of government, the administration could not take a decision,” the statement said.