EVEN as politicians — who once vouched for the soundness of Ramalinga Raju and created risks that have now come home to roost — purvey various formulae to rescue Satyam, the Centre has once again ruled out any governmentsponsored bailout package.
The Congress-led government in Andhra Pradesh is breathing down the Centre’s neck for an immediate fiscal intervention as a lingering crisis in Satyam will be bad news for the state government. The state government has pledged close to Rs 30,000 crore in various infrastructure projects with companies controlled by the Raju family. The state government is endorsing a fanciful proposal that a UTI-type solution should be employed in Satyam —creation of a Satyam-II like UTI-II by transferring business and some Satyam assets to the new company — in the hope that it will cleanse the YSR administration of the Raju taint.
Prime Minister Manmohan Singh has made it amply clear that tax payers’ money cannot be used for working out a rescue plan. His senior Cabinet colleagues are also in agreement with the view that tax-payer money cannot be used for cleaning up a problem created by a corporate crook. “There is no question of any bailout package. The government can intervene if a particular sector is under stress. But how can the government intervene when Satyam seems to be a case of the promoter running away with the money,” asked a minister. He said the immediate priority is to analyse the exposure and reliance on Satyam resources. The new board has been asked to immediately establish a clear inventory of the systems and projects that Satyam was working on. “They will identify the most mission-critical systems maintained by Satyam and craft a plan for bringing these back in shape,” the minister said.
But for the Congress, which is experiencing sniper fire from the Opposition, the Centre’s reluctance to come out with a bailout package just does not augur well. Chief minister Y S Rajasekhara Reddy had awarded the Hyderabad Metro Rail project to Maytas Infra, a subsidiary of the IT major, rejecting all suggestions that the agreement was one-sided as 269 acres of prime land was sought to be handed over to the company. When E Sridharan, who successfully executed the Delhi Metro, raised serious objections to the concession agreement, the chief minister had threatened him with a defamation suit.
In yet another instance of favouritism, an irrigation project in the chief minister’s native Kadapa district was entrusted to Maytas Infra even after trouble began brewing in the Satyam group. Maytas is also a leading contractor for various Jalayagnam irrigation projects. The value of the irrigation contracts is over Rs 10,000 crore.
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