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AP govt was ‘kind’ to Raju Norms were violated in awarding a port development project for Maytas Infra Ltd, a company promoted by Raju and his family. Hyderabad, April 1 The leading software services company was allotted 50 acres of land near Visakhapatnam at a concessional rate of Rs 10 lakh per acre as against the ‘prevailing value’ of Rs 4 crore to Rs 4.55 crore per acre, thus passing on undue benefit of Rs 165.75 crore to the company. The CAG report also points out violation of norms in awarding a port development project for Maytas Infra Ltd, also promoted by Raju and his family. The favours were extended to the two companies much before the sensational confession by Raju to the accounting fraud in Satyam in January last year. Managements of both companies have now changed hands. Tech Mahindra has taken over Satyam, while IL&FS acquired Maytas Infra. The report pointed out that due to “deficiencies” in awarding works relating to development of Machilipatnam Port to the Maytas Infra-led consortium, the state government had been ‘saddled with the payment of Rs 335 crore as against nil investment initially
contemplated’. Initially, the state government had decided to develop the port at Gogileru. After issue of bids and a pre-bid meeting, the project was awarded to a consortium of four companies, including Maytas Infra. The Director of Ports also handed over government land to the extent of412.57 acres to the consortium, which proposed to develop the port at an estimated cost of Rs 1,225 crore. However, following representations from the public, the government subsequently decided to develop the port at Gilakaladinne near Machilipatnam. The consortium demanded a payment of Rs 335 crore for change in the location and the government agreed to pay. The government's explanation that the payment of additional cost to the firm was certified by New Delhi-based Water and Power Consultancy Services (India) Ltd was “not acceptable”, the report said. On land allotment to Satyam at Visakhapatnam, it said the government's IT policy stipulated allotment of 0.30 acres at concessional rate to a company for every 100 jobs created. Since Satyam had promised to provide 2,500 jobs, it was entitled to only 7.5 acres. However, 50 acres of land was allotted at a concessional price, the report pointed out. Meanwhile, a spokesman of the rechristened Mahindra Satyam said the land had since been surrendered at the request of the government before the new management took over the company. Machilipatnam Port project did not take off as Maytas failed to achieve financial closure.
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