Vedanta terminates Maytas contract in Orissa

Sunday, January 18, 2009

BHUBANESWAR - Maytas Infra, the infrastructure company linked to scam-tainted Satyam Computer Services, has lost a contract from Vedanta Alumina to develop an integrated township in Orissa, Vedanta said here Monday.

‘We have terminated the contract. A final settlement with the company will be done in a day or two,’ Vedanta spokesperson Shashanka Pattnaik said.

Maytas Infra, promoted by a son of Satyam’s disgraced founder B. Ramalinga Raju, was awarded the contract in 2007 to develop the township in Jharsuguda district in western Orissa on an investment of about Rs.233 crore (Rs.2.33 billion).

The integrated township is proposed to be spread over about 70 acres and accommodate about 700 families.

After the Satyam scam broke out, banks froze all accounts of Maytas, which is now unable to pay its contractors and suppliers.

Vedanta has taken note of the financial mess Maytas finds itself in. ‘We found it (Maytas) is not in a position to pump in money,’ Pattnaik said, adding that the project was also behind schedule.

There is more trouble brewing for Maytas Infra, with the Orissa government announcing it would review all government projects awarded to the beleaguered company in the state.

Maytas had bagged several irrigation and port projects, which include construction of an earthen dam, a concrete dam and the headrace tunnel for the Upper Indravati Hydro Electric Project in Kalahandi district.

Filed under: India, Satyam

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