Tata to move car plant from West Bengal

October 3rd, 2008 - 10:09 pm

Kolkata, Oct 3 (IANS): The inevitable has happened. Tata Motors chairman Ratan Tata Friday announced that the company was taking its Nano small car project out of Communist-ruled West Bengal due to continuing political opposition.”This is a decision that we have taken with great deal of sadness,” Tata group chairman Ratan Tata told reporters here, after a meeting with West Bengal Chief Minister Buddhadeb Bhattacharjee.

“We’ve taken this decision today because we’ve a timeline to meet and assurances to keep. We did not see any change on the horizon,” said the chairman of the $62 billion group, the largest in the country’s private sector.

He said he was feeling all the more sad in announcing the decision at a time when the state was gearing up to celebrate its most important festival, Durga Puja, over the weekend.

“It is an extremely sad decision, which has shattered many dreams. But it’s a great feeling at the same time because we are doing the right thing - because there is no other option,” he said.

He, however, did not divulge from where the group now intended to roll out Nano, even as Gujarat joined other states like Haryana, Uttarakhand, Maharashtra and Andhra Pradesh in rolling out the red carpet to host the prestigious project for the world’s most inexpensive car priced at Rs.100,000 ($2,200).

Tata was also critical of Mamata Banerjee, whose Trinamool Congress led the protests since the project was announced May 18, 2006 saying some 400 acres of the farmland given for the project was forcibly acquired.

The state government had acquired 997.11 acres of land for the project and its ancillary units. The project, into which the Tatas had already pumped in Rs.15 billion, was nearing completion at Singur, a 75-minute drive from here.

“Two years ago, I mentioned that if you put a gun to my head, either you pull the trigger, or you pull away the gun. I will not move my head. I think, Ms. Bannerjee has pulled the trigger,” he said.

“We were open to dialogue and as long as human approach was taken, but agitation and Ms. Bannerjee’s statement that people of Singur do not want you here did create a hostile environment.”

Tata said he sincerely believed that the land transaction was not only legal and transparent, but also that the compensation was adequate.

“The fact that the agitations happened is unfortunate,” he said, adding: “We believe we were caught in a political crossfire.”

Earlier, Tata, along with Tata Motors Managing director Ravi Kant, expressed their anguish at the heightened agitation and hostility by the opposition that raised concern over the security of their staff, contractors and vendors.

“Threats, intimidation and instances of assault and general obstruction in one form or the other have been the order of the day,” the company said in a statement.

Tata to move car plant from West Bengal

By Amy Kazmin in New Delhi
Published: October 3 2008 15:39

FINANCIAL TIMES

India’s Tata Motors on Friday said it was withdrawing its ground-breaking low-cost Nano car project from the state of West Bengal, after more than a month of violent protests by local farmers brought construction to a halt.

The decision by Ratan Tata – one of India’s most respected industrialists – to relocate the car factory comes as the greenfield plant was nearly 85 per cent complete, and as the group neared its self-imposed deadline of October for rolling out the car.

It comes after weeks of intensive negotiations between Tata, West Bengal’s Communist government and the state’s feisty opposition leader, and highlights the difficulties companies can face in acquiring land in India for industrial development.

The protests by the farmers – who claimed they had been forced to give up their land and had not received sufficient compensation – were stoked by West Bengal’s opposition leader, Mamata Banerjee, who has battled for years against the state’s elected Communist government.

“It is an extremely painful decision – a decision that shatters many dreams that many of us had, and a great disappointment to the people who have worked on the project on the ground,” a shattered-looking Mr Tata announced at a press conference. “But there is also a feeling that we are doing the right thing because there is no other option.”

The decision is also a severe blow to the state of West Bengal, whose authorities have been struggling to attract industrial investment and had hoped that the Nano project would serve as an anchor for a new automotive industry that would have generated thousands of jobs.

Kapil Sibal, India’s science and technology minister, lamented on Indian television that “politics has triumphed over development”.

The Nano has been billed as a car for the common man, which will initially be priced at Rs100,000 ($2,100). Tata Motors, one of India’s top vehicle makers, initially planned to produce 250,000 cars a year, but projected that demand could eventually rise to 1m vehicles a year.

Mr Tata said the company had not yet decided where it would relocate the project, but had received offers from numerous states, all keen for the economic boost the plant would bring.