Tatas double small car outlay, ink lease pact

Tata Motors has more than doubled its investment plans for the small car
project in Singur in West Bengal.

The company is set to invest Rs 1,500 crore for the mother plant on 645
acres for which a 90 year lease agreement was signed with the state
government today.

The vendors will be investing another Rs 500 crore in the project,
Sabyasachi Sen, principal secretary, Commerce and Industries department, West Bengal government, said.

Tata Motors had earlier pegged the project cost at Rs 700 crore, including the investment by the vendors, during the signing of memorandum of agreement (MOU) with the state. The initial capacity of the plant was pegged at 2.5 lakh units.

Tata Motors confirmed the higher investment figure but said that to start
with the capacity would be retained at around 2.5 lakh.

"The small car is set to roll out from the plant in March 2008. The project cost might have increased because of the increase in the planned capacity of production," said Sen.

West Bengal State Electricity Board (WBSEB) will set up a 220 KV sub
station on the area of the mother plant on 14.5 acres of land while West Bengal Industrial Development Corporation (WBIDC) will build the requisite infrastructure on 47 acres.

The state government did not reveal the details of the lease agreement since the Assembly was in session.