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Rediff.com  » Business » It's 997 acres, or nothing for Tata Motors

It's 997 acres, or nothing for Tata Motors

Last updated on: June 10, 2011 13:06 IST

It's 997 acres, or nothing for Tata Motors

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BS Reporter in Mumbai

If Mamata Banerjee is sticking to her guns, so would Ratan Tata.

Tata Motors is unlikely to scale down its plans and go back to Singur for a smaller plant.

Auto component manufacturers, however, can heave a sigh of relief they will be finally reimbursed for their investments after a three-year wait.

Component makers like Exide Batteries, Sona Koyo and Rico Auto were among the many vendors who had followed the Tatas to set up an ancillary components hub in the disputed 400 acres which was next to the mother plant at Singur.

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Image: Tata Nano.
Photographs: Reuters
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When contacted, a Tata Motors spokesperson said, "We are not aware of such a development, and we do not want to make any comment unless we have studied the Ordinance."

People following the development, however, said that the Tatas still maintain their original stand that without a 997-acre contiguous plot, the plant is not viable.

Some even said that the salt-to-software conglomerate may even seek legal option to contest the Ordinance and seek compensation from the West Bengal government.

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Image: Ratan Tata.
Photographs: Reuters
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It's 997 acres, or nothing for Tata Motors

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The Tatas had earlier sought a Rs 558-crore (Rs 5.58 billion) compensation from the Left Front government for vacating the entire land parcel.

The Tatas have been consistent with their stand.

At the 2009 annual general meeting held in Mumbai, Ratan Tata had clarified that it was open to the idea of moving back to Singur even when the company's plant had started manufacturing operations in Gujarat.

He had also clarified then that it was not interested in building the plant on a portion of the 997 acres, and instead was keen on getting the entire plot.

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Image: This file photo shows supporters of Tata Nano.
Photographs: Reuters
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It's 997 acres, or nothing for Tata Motors

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During the same AGM, Tata stated, if any party was interested (in buying/transferring the lease), they would do so, with government approval.

"Even if the government had an interested party, we are willing to sell it to them too," said Tata and added he did not expect to see any loss with its sale.

Some analysts also are of the view that at a time when Nano sales itself have failed to live up to the initial projections, a second Nano plant may also not make business sense at this point.

But the Singur plot, being well connected and having the necessary infrastructure to back a large manufacturing venture, could have had other usage for the group.

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Image: Ratan Tata and Gujarat chief minister Narendra Modi in Sanand.
Photographs: Reuters
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It's 997 acres, or nothing for Tata Motors

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In April this year, Tata Motors had in fact renewed the lease for Singur land by another year even after the Nano production was well underway in Sanand, Gujarat.

It paid Rs 1 crore (Rs 10 million) to the West Bengal Industrial Development Corporation after it gained approval from the vendors of the Nano project to renew the lease.

WBIDC is the owner of the entire land while Tata Motors is supposed to pay Rs 1 crore every year for the first five years of its 90 year lease agreement with WBIDC.

The amount, however, includes payment made by components companies for land earmarked to them.

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Image: A farmer at a construction site in Singur.
Photographs: Parth Sanyal/Reuters
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It's 997 acres, or nothing for Tata Motors

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Asked if Tata Motors would be paying the lease renewal amount every year for the entire 997 acre next year, a company spokesperson said the lease was renewed earlier this year.

The auto vendors are rejoicing the decision.

A Delhi-based auto vendor who had started construction of his plant at Singur before the agitation forced him to leave stated, "We welcome the decision of the West Bengal government. We are happy that the matter is now closed and that we would be reimbursed the amount we had invested there.

"We had moved out of there just after we had erected the columns and laid the foundation. So the monetary setback was not huge".


Image: The abandoned plant of Tata's Nano in Singur.
Photographs: Jayanta Shaw/Reuters
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