Hyderabad-based Nagarjuna Construction Company Ltd (NCCL) is unfazed even as the future of Satyam-linked Maytas Infra, its partner in various infrastructure projects, hangs in the balance.
“We are fairly comfortably placed,” NCCL Executive Vice-President (finance) YD Murthy told Business Standard adding that the company was confident of taking the projects forward even if Maytas Infra failed to infuse the committed equity.
He said NCCL, in association with Maytas, was currently executing eight Build, Operate and Transfer (BOT) projects and 10 irrigation projects. The eight BOT projects include five road projects, of which the Rs 247-crore bridge construction project in Karnataka is already complete and three more are in advanced stages of completion. Nearly 80 per cent of the equity of the BOT projects has already been met and raising the remaining amount is not a problem.
Similarly, the combined investment in the 10 irrigation projects accounts for Rs 2,700 crore. Of this, Rs 1,300 crore worth of works have already been executed. Of the remaining Rs 1,400 crore, Maytas has to pump in Rs 700 crore while NCCL should bring in an equal amount.
“In case Maytas is unable to fulfil its part of the contract, NCCL, if the state government permits, will also meet Maytas share of investment. This will be an additional Rs 700 crore business for us,” Murthy said.
Regarding the Rs 1,600-crore Machilipatnam deep water port, he said the project was in an initial stage and the Detailed Project Report (DPR) was being prepared. The project was bagged by Maytas-led consortium comprising NCCL, SREI Infrastructure Finance Ltd and Sarat Chatterjee and Company Pvt Ltd.
Murthy said, so far only about Rs 30 crore was spent on the project towards consultation fee, preparation of DPR and other things. Unless the state government approves the DPR and allots 6,200 acres needed for the project, it would not be able to achieve financial closure.
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Here also, Murthy said, if Maytas failed to bring in the money, other consortium members could raise the required funds. Maytas has a 26 per cent stake in the project while NCCL holds 25 per cent.
Even in the case of the proposed airports at Gulbarga and Shimoga in Karnataka, not much work has been done. The DPR is now under preparation. “These are not major projects. They cost Rs 100 crore each, of which the equity component is Rs 7-8 crore,” Murthy said indicating that funding of these projects would not be a problem.
Maytas Infra and NCCL had signed a project development agreement with the Karnataka government in April last year for the development of the two airports. The state government is reviewing these agreements now. Last week, financial institutions IFCI and Sicom said they had acquired 24.39 per cent in Maytas Infra after claiming shares pledged to them by the founders.
Following the Satyam fiasco, Maytas account books are being probed by the Serious Fraud Investigation Office.