As per the direction of the High Court, the state government has appointed justice V.Eswaraiah, retired judge of the High Court, as arbitrator to resolve the issues between Maytas Metro Project Ltd and the government on the Hyderabad Metro Rail project.
The state government had terminated the concession agreement entered with a consortium of companies _ Navabharat Ventures, Mayatas Infra, Italian Thai Development PLC and IL&FS _ for construction of Hyderabad metro rail on ‘develop, build, finance, operate and transfer’ basis in PPP mode on the ground that the concessionaire failed to furnish the performance security of Rs 240 crore.
They failed to achieve financial closure by the stipulated date ending March 17 and also forfeited the bid security (Rs 60 crore) and bid offer (Rs 11 crore) in accordance with the terms of the concession agreement.
Maytas Metro Project filed a writ petition in the High Court against the action of government and seeking refund of Rs 71 crore paid towards bid security.
The court, while disposing the writ petition on November 16, 2011, said the matter should be referred to an arbitrator by invoking the clause as mentioned in the concessionaire agreement, giving liberty to the petitioner to avail the arbitration remedy.
Maytas Metro appointed justice DSR Verma as its arbitrator and urged the government to appoint an arbitrator as envisaged in the concession agreement. The advocate-general has suggested the name of V.Eswaraiah as arbitrator on behalf of the government for resolving the dispute between the government and Maytas Metro Limited.