Tata pulls out of Singur, blames Trinamool stir

Written by fe Bureaus | Kolkata, Mumbai, New Delhi, Oct 3 | Updated: Oct 4 2008, 06:38am hrs
Twenty-eight months after announcing his small-car project at Singur in West Bengal, and having invested around Rs 1,500 crore at the site already, Tata Motors chairman Ratan Tata on Friday announced the companys decision to pull out of the state its plant for the much-awaited Rs 1-lakh Nano.

We have taken the decision to move the Nano project out of West Bengal. It is an extremely painful decision, but there was no other option. There is also a great feeling that we are doing the right thing, Tata said, addressing a press conference after an hour-long meeting with state chief minister Buddhadeb Bhattacharjee.

Tata Motors had to move the project out of West Bengal entirely due to the continued agitation by the opposition Trinamool Congress, led by Mamata Banerjee, with total disregard for the rule of law, Tata said. You cannot run a plant with police protection. We cannot run a plant with walls broken. We cannot run a project with bombs thrown. We cannot run a plant with people intimidated, he said.

Some of you may say that we should have waited for some more time, but we moved out because we have a timeline to reach, Tata said.

Tata Motors started construction at the Singur plant two years ago, despite an agitation by and open hostility of the opposition. Land was acquired legally. I believe it was done transparently and compensation paid fairly, Tata maintained.

The company had suspended work at the site for almost a month before it decided to pull out. At that time (end August), I had hoped that there would be some reduction in the agitation. But shortly after that, the agitation increased. We do not see any change on the horizon, Tata said.

When asked about the role of the state government, he said, The chief minister was very persuasive in his desire for us not to move. We parted as friends and the chief minister would have to trust that we have not lost our enthusiasm to invest in West Bengal. I confirm that this is an investor-friendly state. We faced agitation not from the government, but from the opposition.

On the financial loss the auto major would face, Tata said: We would have to evaluate the financial loss we are facing due to this shift. I wishreally, really wishthat we could have found a congenial environment in West Bengal. It was estimated that auto ancillary units were slated to invest Rs 2,000 crore in supplying spares to the car and would have actually generated more jobs than the plant itself. They will also have to be relocated.

Tata also said a number of states have offered to host the project, now that it is moving out of West Bengal. We have got offers from three or four states and we are exploring the possibilities, he confirmed, saying he hoped to find a location where there is a congenial environment. Tata did not comment on the price of the car or the rollout schedule, both of which might be impacted by the relocation.

India Incs reaction to Tatas announcement was unequivocal, with concern expressed about its impact on the company, component makers and the states industrial development.

Said VN Dhoot, chairman, Videocon Industries: Tatas exit from Singur is bad luck for West Bengal, despite the fact that the state has a very good labour situation and power availability, apart from industrial facilities.

Tatas decision against Singur was inevitable. After all, how long could they have waited for things to quieten down, says Vishnu Mathur, executive director, Automotive Component Manufacturers Association. According to Mathur, apart from the delay in launching full-scale production of the Nano because of the relocation, the company and its vendors would incur monetary loss on construction already up in Singur and civil work in its precincts.

Industry chambers are of the opinion that Tatas exit from West Bengal would slam the brakes on the states industrial development. It is sad that the land dispute over Tatas Nano project could not be amicably resolved and that project could not be retained in Singur, said Ficci secretary-general Amit Mitra. He added that this was not a one off auto project, but would have given a host of ancillaries a boost as well.

According to CII, the Tata move would affect Bengals economic and industrial environment. Chandrajit Banerjee, director general, CII, said, This calls for a full review in terms of how we can prevent such occurrences in the future. The Tatas have been patient and there is still hope that they will bring other investments into Bengal. It is in the interests of all to prevent any such incidents in the future for the countrys image.

With the Tatas pulling out of Singur, industrial development has come to a halt. The West Bengal government should not be blamed for this. It is a section of the polity which is responsible for Tatas exit, said DS Rawat, secretary-general, Assocham.

After Singur, where

Last month, the Karnataka government offered 1,000 acres of land to the Tatas in case they planned to shift the Nano car project from Singur. We have offered the Tatas 1,000 acre and promised other facilities, said state chief minister BS Yeddyurappa after his meeting with Tata Motors MD Ravi Kant.

Maharashtra, which already hosts several automotive manufacturing facilities including those of Tata Motors, had offered to host the Nano project in August. State chief minister Vilasrao Deshmukh had offered land in Pune, Nagpur or Nashik to set up the plant. On Friday he said, My invitation is open. We are likely to meet some time next week and then take a decision on this issue.

The states of Uttarakhand and Orissa have also been vying to host Tatas project. According to analysts, Tata Motors had the option of setting up its assembly line at one of its existing manufacturing plants at Pantnagar, Jamshedpur and Pune.