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Tata Motors’ Ace plant idling over legal delays

Tata Motors’ Ace plant idling over legal delays
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First Published: Wed, Jul 11 2007. 12 44 AM IST
Updated: Wed, Jul 11 2007. 12 44 AM IST
Pune: Tata Motors Ltd, India’s largest truck maker, potentially faces a seven-month delay in the start of commercial production of its popular Ace mini truck at its fully operational Rs2,500 crore plant in Pant Nagar, Uttarakhand.
That’s because the state pollution control board has stopped issuing environmental clearances after a court order, which stemmed from a complaint by a former officer against the board. That dispute is unrelated to Tata Motors and the auto giant is not the only firm that has been forced to slam the brakes on industrial operations in the state.
“Industrial activity has come to a standstill because of the stay,” conceded Bansidhar Bhagat, Uttarakhand’s minister for forests, environment, watershed management and transport.
Tata Motors’ 225,000 unit per year plant was to go on stream in March and may be unable to commence production until October because of the court dispute. People close to the situation said Tata Motors had produced around 800 Ace mini trucks from the new plant, but was forced to stop because the expected clearance did not materialize.
The court case behind the problem was a complaint by a former member secretary of the state pollution control board who told the court that the board was flouting norms after he was prematurely removed from his role. The Supreme Court then put a bar on issuing no-objection certificates (NOCs). The next hearing in the matter is scheduled for 1 October.
“More than a hundred NOCs to be issued by the state pollution control board are pending with the department,” said N. Ravishankar, principal secretary of Uttarakhand. “However, the department just cannot issue the NOC, in deference to a Supreme Court stay.”
A Tata Motors spokesperson said their factory in Pant Nagar was completed in a record 11 months.
“Commercial production will begin only after receiving all statutory clearances,” the spokesperson said. “Once a plant is set up, the systems and machinery have to be tested out—and hence some trials were done. The statutory clearance required is the ‘consent to operate’ issued by the state government, and we understand that the state government is seized of the matter,” he said in an email response to Mint.
With production at the Uttarakhand plant being delayed, the company’s Pune plant is likely to be hit by capacity constraints, especially since the company last month launched Magic, the passenger vehicle variant of the Ace.
The Pune plant has a capacity to manufacture 2-2.5 lakh vehicles annually. “We are servicing the market from out of Pune as of now,” the company spokesperson said.
The commercial vehicle business unit of Tata Motors’ Pune plant produces a range of heavy and medium and vehicles of 15-25 tonnes capacity, and the Tata 407 and 709 lines in the light commercial vehicles segment.
The plant also produces the Safari and Sumo range of utility vehicles, the Ace, the newly launched Winger and now the Magic. Pune also produces Indica and Indigo cars and is preparing for variants on that platform.
A Tata Motors executive, who did not wish to be named, said the Pune plant is scheduled to produce 6,000 units of Ace this month, including Magic. The company’s new executive director, commercial vehicles business unit, P.M. Telang, had announced, at the launch of the Magic on 18 June, that production of the Ace would eventually make way for the Magic model, while the Ace would entirely be produced at the Uttarakhand plant.
It is not clear whether the company will delay the roll-out of the Magic and focus on the Ace, an already existing product that is in demand in the market.
Tata Motors has been steadily increasing production of the Ace, which is expected to touch 75,000 units this year at Pune.
The Ace has been a hit for the company and its success has seen a string of competitors, including Mahindra & Mahindra Ltd, Force Motors Ltd and Bajaj Auto Ltd, jumping onto the mini-truck bandwagon with similar projects in the pipeline.
According to the company spokesperson, the Magic will also be produced at Uttarakhand once the plant starts production. “We will arrive at a decision on the distribution of Ace production, between Pune and Uttarakhand, once (the) Uttarakhand (plant) gathers steam,” the spokesperson said.
As to the dispute, Ravishankar recounted that C.V.S. Negi, a former ONGC Ltd official, had joined the state pollution board on deputation in 2003 for three years. However, the state government repatriated Negi in July 2005 before the completion of his tenure. Immediately thereafter, Negi moved the high court, which quashed the state government order in March 2006.
The state government in turn moved the Supreme Court, which first ordered a stay on the high court order, in April 2006, and then ordered a stay on the NOCs, in an order dated 7 May.
Vijay Kumar, member secretary of the state pollution control board, said the Supreme Court had given 1 October as the next date of hearing in the case. Kumar, an Indian Forest Service officer, took over in May, nearly two years after Negi was repatriated to ONGC. During the interim period, the member secretary, forest, assumed the additional charge of the board.
After the stay order, Uttarakhand chief secretary S.K. Das filed a submission in the Supreme Court, detailing the loss to industry because of the non-issuance of NOCs by the state pollution control board.
Negi could not be reached for comment.
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First Published: Wed, Jul 11 2007. 12 44 AM IST
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