Strong corroboration that Tata Motors was withdrawing its Nano plant from West Bengal came today after Commerce and Industries Minister Nirupam Sen told the state cabinet that the chances of the Nano being built at Singur were “remote”.
He added that he feared Tata Motors would convey its decision not to build the small car at the 997-acre plant very soon.
Following Sen’s statement, the West Bengal government today decided to write to both Tata Motors and the opposition Trinamool Congress. It has appealed to Tata Motors not to pull out and has requested Trinamool, which was leading protests by unwilling land-losers to the project, to accept the revised rehabilitation package announced on September 14.
Chief Minister Buddhadeb Bhattacharjee told the state cabinet that he feared the project, on which work has been suspended since August 29, would not be commissioned if the present situation continued.
Tata Motors, however, has not yet written to the government about withdrawing from the project, sources in the state cabinet confirmed.
The state cabinet discussed the Singur issue at length. Members felt that recent reports that Tata Motors was negotiating with state governments like Uttarakhand and Karnataka to relocate the Nano mother plant indicated that the company would not be setting up the plant in West Bengal.
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Sources close to Mamata Banerjee of Trinamool said the party wanted the project to come up and would not thwart any work at the plant. It, however, wanted the government to settle the concerns and issues raised by the 2,200-odd families who had lost their land (approximately 300 acres) to the plant but had not accepted compensation in protest.
The differences between the state government and Trinamool chiefly centre on the location of a land-for-land compensation package. The state has offered land mostly outside the factory complex but Banerjee has said 300 acres inside the premises should be “returned”.
The CPI(M), the biggest of the Left Front parties ruling the state, and Trinamool, will both hold meetings at Singur on September 26. The Congress, which has so far been outside the Singur agitations, will hold a rally outside the plant on September 28.
Meanwhile, Swaraj Baggonkar and Kaustubh Kulkarni report from Mumbai and Pune, even as the West Bengal government said there was a strong possibility that Tata Motors would shift its Nano plant out of the state, the company is getting ready to open bookings for the small car, billed as the world’s cheapest, next month.
Actual deliveries to customers, however, will take place only by the end of December or January.
To meet this deadline, the company is planning to start production in a small way at its facilities in Pune and Pantnagar (Uttarakhand).
"About 300 or 400 Nanos are being built at both centres, a majority of them in Uttarakhand. The Pune unit has already received all the components to manufacture 25 cars," a Tata Motors spokesperson said.
The 900-odd acre facility at Singur, 40 km from Kolkata, was to have been the mother plant for the Nano with an annual capacity of 500,000 vehicles. Pantnagar and Pune were to be satellite assembly plants to service the northern and western markets respectively.
Company sources told Business Standard yesterday that neither location has sufficient spare land to accommodate the mother plant. The company is now closely looking at Karnataka, where it has over 1,000 acres, as the alternative location of the mother plant.
Meanwhile, the company has already started to move critical components out of Singur. Although there has been no official word from the company on the pull-out, truckloads of material have started to roll out of the factory premises.
Analysts believe that the company's pull-out from Singur will mean a longer waiting period for the car due to absence of a regular manufacturing facility. "Pune and Uttarakhand can provide temporary solutions,” he said.
Tata Motors produces passenger cars and utility vehicles including the Indica, Indigo and Sumo from the Pune plant.
It recently shifted production of the light commercial vehicle Ace to Pantnagar, thereby creating a spare capacity at Pune.