A vendor park adjacent to the mother plant has become a norm in the Indian automobile industry and Tata Motors? vendor park at Singur is no different. However, for the first time in the history of Indian automobile industry, this 300 acre piece of land, dedicated exclusively to vendors of Tata Nano, has been caught up in a controversy that seems far from over.
Consequently, while some component makers have put on hold their further investment in the plant till there is some clarity over the whole issue, others who are already at an advanced stage of development have refused to be reallocated.
?Construction at our unit, that is being set up at an investment of Rs 30 crore, is in advance stages and there is no way we could move out to another location away from the mother plant,? says a leading vendor.
He is one of the 20-odd vendors who have informed the state government that they would not be in a position to either return land inside the Nano vendor park to local farmers or relocate their units elsewhere in Singur.
Currently over 50-odd tier-one vendors that supply complete systems for a car have set up their bases at the vendor park. The park, spread on an area of 290 acres, entails an investment of Rs 500 crore. This is over and above the Rs 1,500 crore that Tata?s have invested in the main plant that is coming up at 645.67 acres of land leased by the West Bengal Industrial Development Corporation.
?Currently, we have pumped in just 10% of the Rs 20 crore investment that was planned for the entire unit to go operational and we will continue to hold back further investment till the issue is resolved,? says another vendor on conditions of anonymity.
?Allocation of vendors to place far from the mother plant will disturb the entire cost-equation in the long-run. Also if Tata?s decide to completely move out of West Bengal, a one-year time lag would be the minimum time before the project becomes operational,? says an official of the Automotive Component Manufacturers? Association.
The Trinamool Congress wants the vendor park carved out of the 997-acre project area, and 400 acres returned to farmers, who were unwilling to sell land for the project. However, the government has ruled out separating the vendor park from the car factory.
Considering that such vendor parks make the production more cost effective, players like Maruti Suzuki India, Hyundai Motor India and Volkswagen India have also allotted land adjacent to their mother plant for building up these vendor park.
Maruti, for instance have allotted around 100 acres of land adjacent to its second facility at Manesar for vendors to set up basis there. This is part of the company?s Rs 9,000 crore investment spread over next few years.
Likewise, Hyundai, country?s second largest passenger car manufacturer, has seen an investment of around Rs 1,021 crore by the new vendors at the company?s second plant in Chennai, over and above the Rs 1,564 crore that would be invested by the existing vendors.
Similarly, Volkswagen India, the new entry into the passenger car industry, has allotted around 200 acres of land, at its upcoming plant in Chakan near Pune, to vendors for supplying components.
However, while all such vendor parks will cater to all models that would be developed at the mother plant, the much-controversial vendor park at Singur would exclusively supply components for Tata?s dream project, the Nano.