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29. June 2008

India - Brakes Auto plant delayed

Auto ancillary manufacturer Brakes Auto, which is setting up a Rs 66 crore greenfield castings and forgings plant in Dhulia, a remote area in Maharashtra, has postponed the plant's launch by eight-nine months to February next year owing to water and power shortages.

Its sister concern S S Forging and Engineering has postponed production at a Rs 86-crore plant in the same area.

"Initially the Maharashtra Industrial Development Corporation (MIDC) had promised a stable water and power connection. For power, they had given us a low tension connection which was sufficient while commissioning the plant, but we cannot initialise production with it. Similarly, the water supply from the river has dried up. Now we are told that the power and water connection would be available only by February. Hence we are rescheduling our production," says Suresh Sharma, director, Brakes Auto.

Since Brakes Auto is shifting production from Madhya Pradesh to Maharashtra, the delay has caused it to outsource production to third parties.

"Except for the induction furnace, all work at the Dhulia plant is complete. We will commission it only after power is provided. It is not possible to run full production on diesel gensets, though we have installed one that can take care of production in case of power failure," Sharma added.

Sharma said Brakes was not seeking compensation from MIDC for production losses due to its failure to provide power and water.

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