Qantas: Satyam still 'manageable'

Qantas, Australia and New Zealand Banking Group and Suncorp-Metway yesterday said they were keeping a close watch on the situation, but had no immediate intention of following NAB's lead in suspending work with troubled IT outsourcer Satyam.

Local confidence in troubled Indian outsourcer Satyam hit a new low yesterday after the National Australia Bank (NAB) confirmed it would suspend future work with the company.

NAB, Qantas and insurance and banking giant Suncorp have monitored Satyam closely, following chairman B Ramalinga Raju's admission in January that he had inflated the company's earnings and assets by $US1 billion.

A spokesperson for Suncorp said it would not follow NAB's lead in suspending work being completed by Satyam. It contracted Satyam to build its customer analytics platform in 2007. "We are assessing that relationship," the spokesperson said.

Satyam had been fulfilling its obligations "to specification" and had continued to maintain services satisfactorily, he said.

Qantas yesterday reiterated the position held by its internal team monitoring the Satyam "situation". "At this stage Qantas assesses any risks to business as manageable," the Qantas spokesperson said.

Satyam still has five years left with Qantas from a seven-year deal signed in 2006.

Like NAB, Qantas also uses another Indian outsourcer for its offshore technology operations. The airline handed seven-year contracts worth $120 million and $71 million to Tata Consultancy Services and Satyam Computer Services respectively.

"In the event that Satyam is unable to continue services, Qantas has the ability to activate alternative internal and external arrangements to enable the continuation of seamless services," the spokesperson said.

ANZ spokespeople said it had a "modest" relationship with Satyam that supports development and testing on information technology projects.