MUMBAI MASALA FROM PUNE: CUMMINS BUILDS A GREEN FACTORY,

UNCLAS SECTION 01 OF 02 MUMBAI 000539

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STATE FOR EEB A/S SULLIVAN
STATE FOR EEB/ESC DHENGEL, SGALLOGLY, MMCMANUS, DHENRY
STATE FOR OES PDAS RHARNISH, GTHOMPSON
STATE FOR STEVE MANN, GMANUEL
DEPT OF ENERGY FOR U/S BUD ALBRIGHT, DSCHWARTZ
DEPT OF ENERGY IP FOR A/A/S KFREDRIKSEN, RCOOPER
DEPT OF ENERGY IP FOR TCUTLER, CGILLESPIE, GBISCONTI
DEPT OF ENERGY FE FOR DAS JMIZROCH, MGINZBERG

E.O. 12958: N/A
TAGS: ENRG SENV EFIN EIND PGOV IN
SUBJECT: MUMBAI MASALA FROM PUNE: CUMMINS BUILDS A GREEN FACTORY,
PRAJ INDUSTRIES RESEARCHES NON-EDIBILE CROPS FOR ENERGY, KALYANI OF
BHARAT FORGE DISCUSSES CEO FORUM AND MNS AGITATION DELAYS PROJECTS

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1. (U) Table of Contents:

- Cummins Builds India's first "Green" Factory
- Praj Industries Researches Non-edible Food Crops as an Energy
Source
- Kalyani of Bharat Forge Reviews U.S.-India CEO Forum
- MNS Agitation Against Non-Maharashtrians Delays Construction
Activity in Pune

Cummins Builds India's first "Green" Factory
--------------


2. (U) Cummins Generator Technologies India has constructed a
"green" manufacturing facility to manufacture alternators at
Ranjangaon in the Ahmednagar district in Maharashtra. The
company plans to apply for Leadership in Energy & Environment
Design (LEED) certification of the facility. Pradeep Bhargava,
the Managing Director of Cummins Generator Technologies India,
argued that the cost savings through reduced energy usage will
enable the facility to "pay for itself" within six to eight
months, although he acknowledged that the initial capital
investment for construction of the facility was high. For
example, the wind tower facility which provides natural
ventilation to the shop floor, and the construction of large
windows to let in natural light results in a 25-40 percent cut
in energy consumption. The facility is built with bricks with a
high fly ash content which not only utilizes the fly ash waste
from coal plants but also reduces temperature by 1 degree
Celsius. Rainwater harvesting will preclude external sourcing
of water within 2-3 years. Over the first 10 years of
operation, the facility is expected to save over 14 million KW
of electricity and avoid over 14,000 tons of carbon emissions.

Praj Industries Researches Non-edible Food Crops as an Energy
Source
--------------


3. (U) Praj Industries, a leading local and global supplier of
ethanol processing technology, is increasingly focusing on
converting non-edible food crops like switchgrass and algae to
energy. Pramod Chaudhari, the Chairman of Praj Industries,
noted that "there is a groundswell of interest for alternative
fuels and this presents a huge opportunity for Praj." The
company has established a new research facility - the Matrix
Innovation Center -- at a cost of $20 million. The company is
researching ethanol conversion from ligno-cellulosic crops like
sweet sorghum which requires less water than traditional sources
of ethanol like sugarcane. While there has been much hype about
Jatropha as an alternative fuel source, Praj interlocutors noted
that the crop has a long gestation period of 3-5 years to
achieve the necessary scale for conversion to bio-fuels and crop
output is maximized only with irrigation. Balu Sarma, President
& Chief Technology Officer of the research facility, pointed out
that with irrigation you can get 60-80 Jatropha fruit each month
as compared to 15-20 fruit without proper care and irrigation.
The key is to develop high-yielding varieties of Jatropha which
are drought-resistant, he added. Praj has also successfully
tested the energy efficacy of dried distillers grain with
solubles (DDGS),which is used as a cattle feed, and is looking
for funding to launch this project on a commercial scale. The
company has developed a process to extract oil from DDGS to make
bio-diesel while retaining the protein so that the remaining
DDGS can still be used to feed cattle. The company is also
conducting genetic engineering to create "designer crops" with a
higher calorific value to facilitate greater energy extraction.

Kalyani of Bharat Forge Reviews U.S.-India CEO Forum
-------------- --------------


4. (SBU) In a meeting with the Consul General, Baba Kalyani,
the Chairman and Managing Director of Bharat Forge and a member
of the U.S.-India CEO Forum, evaluated the impact of the
U.S.-India CEO forum. According to Kalyani, the forum had
actively lobbied for the passage of the U.S.-India civil nuclear
energy co-operation agreement and was now working to improve
India's access to sensitive technology. The forum also planned

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to create a USD 5 billion fund to invest in Indian
infrastructure projects two years ago. However, this has still
not materialized, he said. (Note: This infrastructure fund,
which is being led by Citigroup and the Infrastructure
Development Finance Corporation in Mumbai, has raised almost
$900 million in private equity funds and is now working to buy
and develop infrastructure assets. End Note.) In contrast, the
forum has made good progress in the area of educational
co-operation and collaboration. He pointed to the number of
Indian universities who have partnered with or have sister
universities in the U.S. as a case in point. The forum has
recommended that a regulator be appointed in India to oversee
higher education to ensure transparency and to facilitate good
governance. The forum is also trying to address legacy issues
of U.S. companies like Dow Chemicals.


5. (SBU) Kalyani noted that the major challenge for India,
besides inadequate and overloaded infrastructure, is sustaining
higher economic growth and creating good political governance.
He pointed out that India's economic growth was primarily driven
by the private sector and the high growth rate in GDP was
achieved "in spite of the government." He believes that
governance at the state level presents the major challenge to
India's growth. To illustrate, he noted the problems that the
Tata Goup had recently in Singur, West Bengal caused by Mamta
Banerjee and what he considered a minor political party.

MNS Agitation Against Non-Maharashtrians Delays Construction
Activity in Pune
--------------


6. (SBU) In discussions with companies in Pune, ConGenoff
learnt that the agitation led by Raj Thackeray's Maharashtra
Navnirman Sena (MNS) against non-Maharashtrian workers has
affected the construction industry in Pune. Several business
owners indicated that this agitation has forced delays in
several major projects as many construction workers hailing from
North India left Pune and have not returned. These workers
could have been absorbed into infrastructure projects in other
states in India and therefore did not need to come back to Pune
for work, they opined. Local Maharashtrians will not perform
manual jobs requiring heavy lifting so the shortage of workers
will never be filled, they said. Worker shortages affected the
timely completion of construction projects and disrupted
business expansion plans. For example, the construction of
Cognizant Technology Solution's new campus in the Rajiv Gandhi
Infotech park was delayed and Cummins Generator Technologies
green factory was commissioned one and a half to two months
later than planned.


7. (SBU) GM Rao of Cognizant Technology Solutions noted that
Shiv Sena's Bal Thackeray used the same "sons of the soil"
argument as the MNS to gain prominence 20 years ago. He
believes that the agitation against non-Maharashtrians is a
political strategy to gather a large political following
especially when there are a large number of people who are
"unemployable." North Indian workers are "more productive and
better workers" than Maharashtrians, he continued. D B
Chatteerjee of Cognizant Technology Solutions lamented that "the
economic growth of India is unfortunately in the hands of
politicians.
FOLMSBEE