Power Grid Corporation of India Ltd(PGCIL), has decided to revoke seven rural electrification contracts awarded to Maytas Infra Ltd, the infrastructure builder in which the promoters of fraud-hit Satyam Computer Services Ltd hold a 36.44% stake. The projects, with a combined value of Rs395 crore, were awarded to Maytas Infra in Orissa and West Bengal under the rural electrification programme called Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY).
“Orissa and West Bengal have asked us to revoke the contracts given to Maytas. We have already sought legal opinion on the issue and plan to proceed with this course of action,” said a top PGCIL official, who didn’t want to be identified.
The Karnataka government said last week that it will cancel two airport projects being executed by Maytas Infra with Nagarjuna Construction Co. Ltd. London-listed Vedanta Resources Plc. has cancelled a contract with Maytas Infra for building a township for its staff in Jharsuguda, Orissa.
“Given the circumstances, it is an understandable decision which any board would have taken,” Anish De, chief executive at Mercados Asia, an energy consulting firm, said about PGCIL’s decision.
“We had given Maytas an advance of Rs20 crore and work had started on two packages. We have already written to the Union power ministry regarding the same,” the PGCIL official said. “We even checked the bank guarantees submitted by them and found out that they were genuine.”
At a PGCIL board meeting on 21 January, the company decided to seek legal counsel on proceeding with the contracts awarded to Maytas Infra. “The legal opinion is that there is no problem in going ahead with exercising this option (contract revocation),” said another senior PGCIL executive, who did not wish to be identified.
As per present progress, RGGVY will reach only a little more than half the 125,000 villages it was targeted to cover. According to a senior power ministry official, only 55,000 villages have been electrified with 4.5 million BPL families being connected as on 15 January.
Source - Live mint