When Metro man E Sreedharan suggested that a “big political scandal” was brewing in the Hyderabad Metro project in September last year, the Andhra Pradesh government threatened him with defamation.
But, with Satyam chairman Ramalinga Raju confessing to defrauding his own company of over Rs 7,000 crore and accepting the charge that the aborted buyout of Maytas was also part of this fraud, Sreedharan’s apprehensions appear to be justified.
The Hyderabad Metro project is being developed by Maytas Infra, a company promoted by Teja Raju, son of Ramalinga Raju, and other members of the Raju family.
The Delhi Metro Rail Corporation chief had, in a letter to deputy chairman of Planning Commission Montek Singh Ahluwalia, raised concerns about the AP government’s decision to award the Hyderabad Metro project to a consortium led by Maytas on the build-operate-transfer (BOT) model. “The BOT operator (Maytas) has a hidden agenda which appears to be to extend the Metro network to a large tract of his private land holdings so as to reap a windfall profit of four to five times the land price,” the letter stated.
Ironically, Sreedharan’s allegation not only drew criticism from the AP government but also from the Planning Commission, which reportedly blamed the DMRC chief for not backing his allegations with any evidence.
While Ramalinga Raju’s son Teja is the main promoter of Maytas Infra, Ramalinga Raju and his family hold about 20% equity as on September 30, 2008. Of the 2.15 crore shares in the promoter group category of Maytas, the family collectively held over 1.10 crore shares on that date.
Though Sreedharan has maintained a stoic silence over his allegations on the Hyderabad Metro project ever since the Satyam fraud came into light, he had in his letter to the Planning Commission pointed out that, while the state government was citing the Metro as a successful example of BOT approach, it wasn’t really so.
“I would like to caution that the example of the Hyderabad Metro (as a successful example of BOT approach) is quite misleading as the negative viability gap funding has resulted solely on account of 296 acres of prime land being made available to the BOT operator for commercial exploitation. This is like selling family silver,” he had said in his letter.
He went on to caution that the project may lead to “a big political scandal some time later”, alleging that Maytas “has a hidden agenda which appears to be to extend the Metro network to a large tract of his private land holdings so as to reap a windfall profit of four to five times the land price.”
Following his objection, the DMRC, project consultant for the Hyderabad Metro, pulled out of the project. There were also reports suggesting that the detailed project report prepared by DMRC had been “altered” to give benefits to the BOT operator which had procured large chunks of land around the Metro route.
