Tata threatens to pull out of West Bengal

Tata threatens to pull out of West Bengal
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First Published: Sat, Aug 23 2008. 12 58 AM IST

Last resort: Tata Motors chairman Ratan Tata. (Indranil Bhoumik/Mint)
Last resort: Tata Motors chairman Ratan Tata. (Indranil Bhoumik/Mint)
Updated: Sun, Sep 07 2008. 09 12 PM IST
Kolkata: Tata Motors Ltd chairman Ratan Tata warned on Friday that his company would pull out of Singur, where it is setting up a factory to build the Rs1 lakh Nano car, if attacks on the plant by protesters don’t stop, ratcheting up the pressure on the West Bengal government.
“Our employees and contractors are working under tremendous tension,” Tata said in Kolkata. “Our compound walls have been broken, people have been coming in and materials are being stolen. We can’t open and operate a plant with police protection.”
Tata held out the ultimatum two days before West Bengal’s main opposition party, the Trinamool Congress, starts a sit-in protest in Singur. Tata Motors plans to roll out the Nano in October.
Tata Motors has already invested around Rs1,500 crore in its Singur factory. Given the hefty amount it has already spent, Tata Motors is unlikely to carry out the threat, said Mahantesh Sabarad, an analyst at Centrum BrokingPvt. Ltd.
“Tatas will be able to sort out the issue amicably by discussions with the concerned political outfits,” he said. “One should not forget that they have been successfully running their construction equipment company Telcon in Kharagpur, which happens to be just 100km away.”
Last resort: Tata Motors chairman Ratan Tata. (Indranil Bhoumik/Mint)
Tata said the money already invested wouldn’t keep Tata Motors tied to West Bengal.
“If anybody is under the impression that because we have made this large investment, we will not move, then they are wrong... I can’t bring our managers and their families to West Bengal if they are going to be beaten... if their children are going to be afraid to go to school.”
The Trinamool Congress wants the government to return 400 acres of the land it acquired for the Tata Motors project to farmers who had been unwilling to sell it in the first place.
“They cant go on facing problems for ever, there’s no point in continuing there if the crisis continues,” said an analyst at SSKI Securities who didn’t want to be named. “After all they are losing precious time. While I do agree that Rs1,500 crore is a lot of money, the land is for free and all they need to do is transfer the machinery. This would still be lesser than the loss that will happen as a result of the delay in the project.”
But, much to the relief of the government, the auto maker said it still doesn’t have a “plan B” to fall back on. “I’m an optimist,” said Tata, “(but) the last thing I want is a feeling that the Tatas are unwanted in West Bengal.”
Asked if the company could start production of the much awaited car from October, Tata said, “We are in a position to roll out the Nano in October or close to October, but it seems that many people have desired not to see that happen. So, it’s very easy for people to block that from happening; but our desire is to see it take place.”
The Trinamool Congress wants the so-called vendor park, where auto component makers would manufacture parts for the Nano, to be separated from the main factory, and the plot returned to farmers.
But Tata ruled out carving up the project.
“As we are looking at a unique product at a very low cost, we wanted it to be a consolidated car company with its ancillary suppliers incorporated in the same location because logistics and transportation cost are a major part of the component cost of any plant,” he said.
Some 53 ancillary units have already started setting up shop at Singur. The government has allotted close to 300 acres to them.
“The vendors have made as much a leap of faith as we have,” said Tata, adding that had the vendors not agreed, the Nano plant wouldn’t have come to West Bengal at all.
The Trinamool Congress, which wouldn’t budge from its demand for the return of 400 acres, has threatened to start an indefinite sit-in protest in Singur from 24 August.
“It’s not my business what he (Ratan Tata) does with his factory,” Trinamool chief Mamata Banerjee said. “No one can blackmail us into altering the course of ouragitation.”
The state’s commerce and industries minister, Nirupam Sen, who met Tata on Thursday evening, formally announced that the government was willing to revisit the compensation issue, almost two years after the 1,006-acre project site was acquired.
“The government is committed to help those who are financially affected,” Sen said. “The Tatas, too, have agreed to do their bit in helping them,” Sen told chambers of commerce in Kolkata on Friday.
West Bengal’s chief minister Buddhadeb Bhattacharjee said he was hopeful of resolving the impasse through discussions with the Trinamool Congress.
aveek.d@livemint.com
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First Published: Sat, Aug 23 2008. 12 58 AM IST
More Topics: Tata Motors | Ratan Tata | Nano | Singur | West Bengal |