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Downturn delays Cummins' Rs 750-cr project near Pune
Kaustubh Kulkarni / Mumbai/ Pune Jun 26, 2009, 00:52 IST

Diesel engine maker Cummins India has delayed its Rs 750-crore 'mega project' at Phaltan near Pune by six-eight months due to the economic slump.

The company wanted to have its first phase of bus and truck engines operational by July. This is now unlikely before December. The delayed project has given the firm enough time to improve local infrastructure and other crucial works in and around the Maharashtra Industrial Development Corporation (MIDC) premises in Phaltan.

Cummins India Ltd had announced this as a three-phase project. In the first phase, the company plans to manufacture bus and truck engines through a joint venture company named Tata Cummins Ltd. The investment would be Rs 400 crore.

The engines would primarily be used to meet the requirements of Tata Motors Ltd and also for export purposes. Apart from this, the company plans to set up a diesel and gas gensets’ unit at an investment of Rs 200 crore. Other than this, a subsidiary firm, Cummins Turbo Technologies, would set up the third phase unit to manufacture diesel engines.

Cummins India had signed a Memorandum of Understanding (MoU) with the government of Maharashtra in March 2008 to develop this site. In an emailed reply to Business Standard, Group Vice-President (legal) Dinesh Castellino said: "The Phaltan project has been granted 'mega project' status by the government of Maharashtra. Cummins has started working with MIDC and the local authorities on skills and infrastructure development. However, like most other businesses, Cummins too is having to respond to slowing economic conditions and some delay in the project is inevitable."

The mega project aims at manufacturing 240,000 engines annually, equal to the number delivered by Cummins India's Jamshedpur facility. The new unit will manufacture high-power engines in the range of 110-230 Hp for buses and trucks and also smaller engines for other requirements. Although the company did not specify the delay, informed sources said it could be between six-eight months.

"As of now, we plan to utilise this time to strengthen the area's infrastructure and bring it to a state of readiness which will support the pace of the project once the economy stabilises. However, our commitment to Phaltan remains unwavering,” Castellino added.

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