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Maytas Infra Ltd, promoted by the family of beleaguered Satyam Computer Services founder B Ramalinga Raju, has sought an extension of deadline for financial closure of the Rs 12,132 crore (Rs 121.32 billion) Hyderabad Metro project. A consortium led by Maytas was to achieve the financial closure on Thursday.
The company will now have to submit a Rs 240 crore (Rs 2.4 billion) bank guarantee and will get a 60 day breather by paying a penalty. "I am yet to know if the Rs 240 crore (Rs 2.4 billion) performance guarantee has been deposited or not," said the company spokesperson.
"The global recession and the consequent credit squeeze in national and international capital markets has created a force majeure (a clause in contracts that essentially frees both parties from any liability when faced with an extraordinary event) situation. Besides, the ongoing PIL (public interest litigation) is having an extremely deleterious effect on our ability to achieve the financial closure," said the company. The PIL was filed by the Forum for Better Hyderabad, a non-government organisation.
"We are affected by the global recession and raising of debt (including external commercial borrowing) is proving to be a challenge," said a company spokesperson.
Hyderabad Metro Rail Limited Chairman CVSK Sarma said Maytas had sought a six-month extension. "We will examine their request and study the legal aspects involved," he said. He said it was too early to comment on the penalty clause. Earlier, HMRL Managing Director NVS Reddy had said that the decision on the project vested with government. "HMRL is a facilitating agency," he said.
The 71.6-km rail project is to be executed on a build, operate and transfer basis by a public-private partnership. The government's contribution will predominantly be land. The government had issued the letter of acceptance for the project in August last year.