Tata Motors renews Singur lease for a year

Tata Motors renews Singur lease for a year

Kolkata: Tata Motors Ltd renewed the lease on its plot in Singur, where violent protests against land acquisition three years ago forced one of India’s largest car makers to abandon plans to build a factory for the world’s cheapest car, the Nano, at the site. The Nano is now made in Gujarat.

The company paid the annual lease rent of 90 lakh on Friday, according to a West Bengal Industrial Development Corp. Ltd (WBIDC) official, who did not want to be identified. Almost all the car maker’s component suppliers have also renewed their leases, he said.

Dipankar Mukhopadhyay, principal secretary of West Bengal’s commerce and industries department, refused to comment, while Subrata Gupta, WBIDC’s managing director, could not be contacted because he was travelling.

Tata Motors’ spokesperson was not immediately available for comment.

The move comes just ahead of West Bengal elections in which the ruling Left Front is being challenged by the Mamata Banerjee-led Trinamool Congress in alliance with the Congress party. Banerjee spearheaded the campaign that eventually led to the scrapping of the Nano project in Singur.

Banerjee has said that if she’s voted to power she will return 400 acres to farmers from whom the land was acquired, while still finding a way to use the rest of the plot. Government officials said her plan may not be legally tenable.

“There is no provision under the land acquisition Act to return land," said a former principal secretary of the commerce and industries department, who did not want to be named. “It will lead to unmanageable legal complications."

WBIDC, the key facilitator for industrial projects in the state, had in early 2007 leased out 997 acres to Tata Motors and its component suppliers to build the small car factory.

Although Tata Motors decided to pull the plug on the project in October 2008, it has been renewing the lease for the Singur land every year.

The state government had rapidly pushed through land acquisition in Singur for the project. But the company had “lost patience", West Bengal chief minister Buddhadeb Bhattacharjee said at a recent press conference, expressing his displeasure over its decision to move to Gujarat.

After the October 2008 announcement, Tata group chairman Ratan N. Tata had said his company wouldn’t stand in the way of industrial projects in Singur, some 35km from Kolkata, and that it would vacate the land if compensated for the sunk cost.

Elections to the state assembly are to be held in April-May. The Communist Party of India (Marxist) (CPM)-led Left Front and the Trinamool Congress, West Bengal’s main opposition party, have both said the disputed plot in Singur is to be used for industrial projects.

With Tata Motors deciding to stay put, the incoming government will have to find a taker who will compensate the auto maker and its component suppliers for investments in Singur.

The factory was almostready when Tata Motors decided to abort the project. Though the company hasn’t said how much it spent, WBIDC officials estimate it at 300-400 crore.

Besides compensation, efforts to find another taker for the Singur land have been hobbled by the Trinamool Congress’ demand that the state government return at least 400 acres to the farmers who opposed the project.