No progress on MP auto cluster

Original auto equipment manufacturers (OEMs) of Madhya Pradesh, who never hesitate to come down heavily on the government for poor infrastructure, have failed to show up when it is their turn to contribute.

A low-key response from industry to the much-awaited Pithampur Auto Cluster Limited (PACL)""a facility to be created in Pithampur (Dhar district for auto component manufactures)""may put the project in jeopardy because the central government, according to insiders, has indicated withdrawing its assistance from the project.

Interestingly, OEMs had asked for the facility and the MP chapter of the Confederation of Indian Industry (CII) had conceptualised the auto cluster last year to enhance the international competitiveness of domestic auto industry.

The central government had given its nod earlier this year and had approved a grant of Rs 49.94 crore for the Rs 73.29 crore cluster. A special purpose vehicle had been formed.

"The first instalment of Rs 16 crore had been received, but local industrialists have not come forward to contribute their share. So far we (Audyogik Vikas Nigam Indore, a subsidiary of the MP State Industrial Development Corporation) have contributed Rs 1 crore. But industrialists are supposed to contribute at least Rs 2.5 crore initially. They have contributed only Rs 25 lakh in the project," PACL Chairman Raghav Chandra said, adding, "we are asking them to contribute as early as possible since the facility is for the industry only."

After the completion of the project, the industrialists' contribution should reach Rs 15 crore. When contacted, MP CII Director Rameshwar Prakash said, "We have floated the concept and convinced the central and state governments to get funds, etc. for the project. Our role is over now."

The central government has reportedly asked for a progress report on the cluster and has indicated withdrawing assistance if the project does not move. "It is a routine exercise, but industry should come forward to contribute," said Chandra.

Under this cluster OEMs, mostly small-scale and medium entrepreneurs of Pithampur, were to be trained in special skills to enhance competitiveness. The Indian Institute of Management (IIM), Indore, has been roped in for setting up the Centre for Innovation and Entrepreneurship at its premises against a payment of Rs 1.65 crore. Feedback Consultant had been assigned the task to recommend the courses prepared by the IIM.

The IIM Indore has also agreed to provide campus facilities at a discount of 25 per cent on fee for training and management development programmes and 33 per cent discount on management consultancy besides campus facilities including training classes, tool rooms, conference rooms, consultancy and meeting rooms, computer rooms for organising training seminars and meetings etc.