"A decision will be taken in the next 10 days or so and it is difficult to say which state will eventually bag the project," they said. According to them, the issue would boil down to the incentives offered by either party. This apart, the nagging issue of the 4 per cent octroi structure in Maharashtra was cause for concern and would even prompt M&M to consider AP.

"To the company, this would translate as an outgo of Rs 30 crore which just cannot be written off," sources said. The IDAM plan, or Project Scorpio as it is referred to, would not be a feasible option with this octroi duty level still prevailing, they added.

Whether Maharashtra concedes to the company'srequest remains to be seen but this will not discourage AP from wooing the auto manufacturer. The IDAM project would be a prize catch as the vehicle rolling out will be comparable to world standards. What AP desperately needs is an automobile investment which has continued to elude the state. Proton of Malaysia was keen on a car plant but the idea is believed to be on hold as of now.

Most other big car companies have settled for Tamil Nadu (Hyundai and Ford as also Mitsubishi through the Lancer though it has no equity stake in the project), Karnataka (Volvo and Toyota) and Maharashtra (Fiat and Volkswagen).

AP has generally not been an attractive option as sourcing components is more difficult apart from the fact that the state really does not have a mechanical engineering tilt like the other three, especially Tamil Nadu.M&M has a plant in Zaheerabad which caters to manufacture of its light commercial vehicles and the recently introduced Voyager. It, however, has had a history of labour strife and whetherthis would deter the company in its AP endeavour is anyone's guess.

On the other hand, Maharashtra has been familiar territory with units in Igatpuri and Kandivli, Mumbai. This, observers add, is good reason for M&M to continue in the state though the octroi issue will be the final deciding factor. The IDAM project is crucial to the company and an investment of Rs 800 crore has already been earmarked. The first vehicle is scheduled to roll out of the plant by the turn of the century. It will be completely contemporary and, as sources say, will be at par with world standards.

Such an offering is crucial to M&M as the next three years will see Toyota ready with the Indian version of the Kijang with other manufacturers like Hyundai, General Motors and Daewoo all set with their own multi-utility vehicles.

At one point, M&M was considering housing the project in the PAL-Peugeot plant at Kalyan in northeast Mumbai. It would have been the best bet considering this was a readymade facility with all theinfrastructure in place. However, the deterrent was uncertainty on the labour front and finally M&M shelved the proposal.