A little over a week after Tata group chairman Ratan Tata threatened to pull the Tata Motors small-car project out of Singur in West Bengal in the face of ?constant violence? and ?disruption? of work at the plant, the worst fears of the state government appear to have come true.

Tata Motors on Tuesday said it has suspended construction and commissioning work at the Nano plant in Singur ?in view of continued confrontation and agitation at the site?. It is also evaluating alternative options to manufacture the Rs 1-lakh Nano at other company facilities. A detailed plan to relocate the plant and machinery to an alternative site is under preparation, the company said.

This decision, it said, was taken in order to ensure the safety of its employees and contract labour, ?who have continued to be violently obstructed from reporting to work?.

The decision to suspend work followed five consecutive days of work cancellation at Singur, following an offensive launched by Trinamool Congress party workers under its leader, Mamata Banerjee, outside the company?s plant.

?The company has assessed the prevailing situation in Singur? and believes that there is no change in the volatile situation around the plant,? Tata Motors said in a statement on Tuesday evening.

Mamata Banerjee, reacting to the Tata statement, said: ?It is an internal and technical decision of the Tatas. I have nothing to say.? The Tata Motors broadside sent her into an emergency huddle with lieutenants at their Singur campsite.

A stunned state government and administration had no comment to make. Chief minister Buddhadeb Bhattacharjee, who was in a meeting with the governor when the Tata announcement came in, left without making any statement.

Earlier this month, chairman Ratan Tata minced no words when he told reporters after the Tata Tea AGM in Kolkata, ?If anybody is under the impression that because we have made this large investment of Rs 1,500 crore? we would not move, we say no. We would move at whatever the cost to protect our people. I can?t bring our managers and their families to West Bengal if they are going to be beaten and there is going to be violence constantly.?

On Tuesday, the company said that the move to suspend work at Singur and consider alternative locations was also because the project?s auto ancillary partners, who had commenced work at their respective plants in Singur, ?were also constrained to suspend work in line with Tata Motors? decision?. To minimise the shifting of recently recruited and trained people from West Bengal, the company is exploring the possibility of absorbing them at its other plant locations, it added.

As reported by FE on August 23, Tata Motors would now consider the option of setting up the assembly line at one of its existing manufacturing plants at Pantnagar, Jamshedpur or Pune for the Nano, scheduled to roll out in October. This is likely to restrict initial volumes. Among these locations, the company is expected to opt for one that has tax benefits.

?Tatas will look for a location with tax benefits. Pantnagar, which has these benefits, looks ideal,? said an auto analyst. The Pantnagar plant was already expected to manufacture a few hundred Nanos. The company’s statement came in after market hours, but the Tata Motors stock on Tuesday dropped 1.82% on the BSE to close at Rs 429.85.

Construction of the Singur plant has faced challenges at various points of time, the detailed note from Tata Motors said. There has, however, been a significant decline in the attendance of staff and contractual labour since August 24. Some of the international consultants working on the plant have gone home and construction work has been stalled since August 28.

?In fact, the existing environment of obstruction, intimidation and confrontation has begun to impact the ability of the company to convince several of its experienced managers to relocate and work in the plant. Further, several persons engaged in the construction and commissioning work who had taken accommodation at Singur and nearby areas have since vacated and have gone away due to intimidation and fear,? it added.

Construction of the Nano project, comprising the Nano manufacturing facilities and the vendor park?”a normal feature in modern world-class auto plants”?commenced in January 2007. Work on the construction and commissioning of the plant had been nearing completion on schedule. During construction, the project employed around 4,000 people at its peak, including several hundred young residents from the precincts.

?As part of its commitment to enhance the employability of its people, Tata Motors has trained over 762 ITIs and other apprentices from the region and the state,? the company statement noted. They have undergone retraining at Tata Motors facilities in Jamshedpur and Pune.