Chennai, Aug 6 - Hit by the economic slowdown, engineering and construction major Larsen and Toubro (L&T) has scaled down its investment plan for the upcoming Chennai shipyard, a senior company official said here Thursday.

'Initially we planned to make commercial ships at an outlay of Rs.2,500 crore. With the global economy going down, we later decided to make only defence vessels and investment will now be lower by Rs.1,500 crore,' J.P. Nayak, a member of the company board, told reporters.

'The land acquisition for the project is on and we are in the process of acquiring the equipment,' said Nayak, who came to the city to attend a seminar on infrastructure organised by the Confederation of Indian Industry (CII).

The Shipyard project needs around 1,200 acres, he said.

'We are yet to form the shipyard company. Once the company is formed, the state government will take three percent stake in that.