By IANS,
Chennai: Hit by the economic slowdown, engineering and construction major Larsen and Toubro (L&T) has scaled down its investment plan for the upcoming Chennai shipyard, a senior company official said here Thursday.
“Initially we planned to make commercial ships at an outlay of Rs.2,500 crore. With the global economy going down, we later decided to make only defence vessels and investment will now be lower by Rs.1,500 crore,” J.P. Nayak, a member of the company board, told reporters.
“The land acquisition for the project is on and we are in the process of acquiring the equipment,” said Nayak, who came to the city to attend a seminar on infrastructure organised by the Confederation of Indian Industry (CII).
The Shipyard project needs around 1,200 acres, he said.
“We are yet to form the shipyard company. Once the company is formed, the state government will take three percent stake in that. The project is expected to be ready in two years.”
Asked about the future investment plans, Nayak said a major portion of the company’s capital expenditure – Rs.2,000 crore – will go for its two power equipment joint ventures with Japan’s Mitsubishi.
L&T, which has 6.9 percent stake in Satyam Mahindra – formerly Satyam Computers – has approached the market regulator, Securities and Exchange Board of India (SEBI), for permission to sell that stake to raise resources.
At present there is a six-month lock-in period for selling stake in the fraud-hit Satyam Mahindra.
Nayak added that L&T was also planning to set up a separate division to attract more business from the railways.
“The current order book from the railways business is Rs.3,000 crore. We have set up marketing and design teams,” Nayak said.