It’s finally curtains for the Australian chapter of Satyam with the Mahindras finally deciding to log out of the proposed A$75 million IT hub spread over 10 hectares that the disgraced Satyam founder had promised to set up in Victoria state’s second largest city of Geelong.
According to latest Australian media reports, Mahindra Satyam has conveyed its decision to pull the plug on the project to the Victorian Labor government headed by Premier John Brumby, which has been facing considerable flak for paying an undisclosed sum of money last year to woo Satyam to its shores.
Top Mahindra Satyam officials in Hyderabad confirmed the news. Mahindra Satyam’s corporate affairs president, Sujit Bakshi, is reported to have conveyed the company’s decision to Victoria’s IT minister, John Lenders, in a letter.
Reports in "The Australian" and "Geelong Advertiser" have quoted Bakshi as saying: “The need to concentrate on an extensive internal restructuring program of our business precludes Mahindra Satyam from embarking on expansion projects of this kind. While Mahindra Satyam is disappointed that it cannot proceed with the centre, it reaffirms its commitment to future expansion in Victoria when circumstances allow.”
The reports also suggest that Mahindra Satyam had agreed to pay back the hitherto undisclosed cash grant that the Brumby government had paid Satyam.
The pullout has already intensified the political storm that the Brumby government has been facing over the project. Terming the collapse of the Geelong project as devastating, Victorian MP and opposition spokesperson Kim Wells is quoted has having said: "We want an explanation of what has happened to the money, how much money has been handed over, we want to know the status of the 10 hectares of land and we want to know what the Brumby government is going to do to replace these 2,000 promised jobs, especially for the young people in Geelong whose hopes have been dashed."
Incidentally, it was in July that Vineet Nayyar, executive vice chairman of Mahindra Satyam, as Satyam Computer Services is now known, had said during a visit to Australia that the company was committed to the project but was looking into its viability.
The fate of the IT hub at Deakin University’s Waurn Pond campus , tipped to transform Geelong into a Silicon Valley by creating 2,000 jobs, had been hanging in balance after the multibillion-dollar Satyam fraud came to light in January 2009.
After the Satyam scam broke out, Victoria’s opposition leader, Ted Ballieu, in July this year demanded a status report from the Brumby government on the land handed over to Raju and sought public disclosure about the amount of Victorian tax-payers’ money given to him as a bait.
The Deakin Satyam project was reportedly codenamed project "Cricket" by Brumby, who had termed it "as a great partnership, almost like Sachin Tendulkar and Steve Waugh coming together" in a statement to the Victorian parliament.
"It is a fantastic outcome that will involve A$75 million of new investment in Geelong by Satyam, will create over the next eight years new jobs in Geelong with Satyam, and will lead to an increase of A$175 million in GDP in our state," Brumby had earlier told the parliament after the deal was announced during Raju’s visit to Geelong in April 2008.