Nano project faces cost overrun for 3rd time

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Tata Motors on Saturday indicated that the cost of its small-car project in Singur has gone up further by Rs 300 crore because of some ‘challenges’ such as waterlogging at the project site during last year’s monsoons.

This is the third revision since Singur was selected as the location for the plant in 2006. The initial project cost of Rs 1,000 crore was later revised to Rs 1,500 crore and then to Rs 1,700 crore in January this year.

Tata Motors’ managing director Ravi Kant, who was here for a site visit and a meeting with chief minister Buddhadeb Bhattacharjee, declined to comment specifically on the cost overrun at the plant, which will manufacture the Nano, billed as the world’s cheapest car at Rs 1 lakh when the project was announced in 2006.

“I won’t like to talk about cost overrun, it’s an internal issue,” he said. “Surely there has been cost overrun because the whole project has undergone major changes. It was Rs 1,700 crore.”

But, stressing Tata Motors’ commitment to producing Nano from West Bengal, Kant said it had invested more than Rs 2,000 crore in the project wants the Nano rollout to take place from Singur.

On Friday, when Kant, his lieutenants and top officials of the project contractor had visited the site, they had been given a stormy reception by villagers who are still protesting the acquisition of farmland by the government for the project in 2006.

“Yesterday, I spent a few hours with senior managers, contractors, suppliers and West Bengal government officials. We have made considerable progress…,” Kant said.

Tata Motors hopes to bring out the car before the Durga Puja festival in October this year.

Regarding the challenges, Kant referred to the waterlogging of the site last monsoon.

“This forced us to go into major regressive mode with the change in the entire plan of laying of equipment with even relaying of certain equipment and raising the level of the plant,” he said.

He avoided any reference to the sporadic disturbances created by villagers backed by the Opposition Trinamool Congress.