MUMBAI, November 27: The Maharashtra government on Thursday received a shot in the arm with German auto major Skoda (the subsidiary of Volkswagen) giving a positive feedback on its Rs 1,100-crore project at Shendre near Aurangabad in Marathwada region.

A high-level team led by head of personnel, Bayer, who completed his two-day visit to Shendre told the government today that "the project is workable." Bayer, who was accompanied by Inder Hassen, project director (India) examined the living conditions and housing avenues at Shendre for the staff, labour movement and past incidents of labour "terrorism" if any.

Top sources told The Financial Express that Bayer's visit would be shortly followed by a visit of the technical team. This team will examine the infrastructure facilities like road, telecommunications, power and water supply. It would also look into the possibilities of vendor development near the site and the scope for implementing the state's incentive package for mega projects costing over Rs 1,000 crore.

The concessions include sales tax exemption for 18 years, assured water and power supply and land at Rs 250 per sq mt. These concessions are 25 per cent more than those offered to Fiat Auto India for its Rs 1,000-crore Palio project at Ranjangaon in Pune district. The government resolution (GR) in this regard will be issued tomorrow.

Sources said that the government may sign a memorandum of understanding (MoU) with Skoda within the next two months. The letter of intent has already been handed over by the government during a visit to Prague by deputy chief minister, Gopinath Munde. Skoda has outlined an initial investment of Rs 1,100 crore, going up to Rs 3,500 crore when the plant reaches full capacity.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.