Tata Group abandons cheapest car plant in W Bengal
Sunday, 5 October 2008
KOLKATA, Oct 4 (AFP): India's Tata Group announced yesterday it was scrapping a plant in eastern India slated to turn out the world's cheapest car after weeks of violent demonstrations by farmers whose land was seized.
The row over the high-profile Nano plant in Singur on the outskirts of West Bengal state capital Kolkata had emerged as a symbol of the clashing interests of India's small farmers and industry.
The announcement of the plan to relocate production of the Nano came after construction of the 90-per cent completed factory in Marxist-ruled West Bengal was halted when protests made work impossible.
"You cannot run a plant when bombs are being thrown, you cannot run a plant when workers are being intimidated," Ratan Tata, chairman of one of India's oldest industrial houses the Tata Group, told reporters in Kolkata.
Farmers and activists led by Mamata Banerjee, the fiery chief of the regional Trinamool Congress party, accused the state government of forcing farmers to give up their fertile land for a pittance to make for the plant.
"If someone had put the gun to my head I would not move away but I think Banerjee has pulled the trigger," Ratan Tata said, referring to Banerjee's unyielding opposition to the plant.
Trade lobbies said the problems that engulfed the Nano, due to be sold for 100,000 rupees (2,150 dollars), were a blow to India's efforts to woo badly needed foreign investment.
"Given the global turmoil, foreign investors could decide to go to safer destinations and not come here," said Dilip Chenoy, director general of the Society of Indian Automobile Manufacturers.
The state government had said it would be a "big loss" to industry-starved West Bengal if the Tatas pulled out of the desperately poor region.
"This decision shattered many dreams and the people who worked on the ground. But I think we are doing the right thing-that there was no other option left," said Ratan Tata, who conceived of the Nano as a way to make cars affordable for ordinary Indians.
Industrialisation has been long championed by government officials as a way to pull tens of millions of Indians out of grinding poverty.
But across India, land for factories has turned into a battleground and the Nano row was projected by some observers as a test case for industrialisation.
There has also been violence in Orissa state over South Korean steel giant POSCO's plans for a 12-billion-dollar steel plant, and clashes over plans for other special economic zones, a part of the big push for industrial expansion.
Ratan Tata had said he could have built the Nano plant in other parts of India with better infrastructure but had wanted to develop under-industrialised West Bengal "as our gift" and had not "come to exploit people."
West Bengal Industry Minister Nirupama Sen said the Tata decision "will have a chain reaction in the industrialisation of the state."
But others said the battle had underscored the need to reconcile the needs of big business with those of ordinary citizens displaced for industry.
The Tatas had said they hoped to roll out the car this month and December by the latest. They did not say where they would build the new plant.
"We're going to do everything possible to come close to the deadline we established," Ratan Tata said.
Tata officials have said the first Nanos could be made at other Tata plants and the company has been flooded by invitations by other states to set up a full-scale Nano plant.
Tata Motors poured 350 million dollars into the Singur plant.
The row over the high-profile Nano plant in Singur on the outskirts of West Bengal state capital Kolkata had emerged as a symbol of the clashing interests of India's small farmers and industry.
The announcement of the plan to relocate production of the Nano came after construction of the 90-per cent completed factory in Marxist-ruled West Bengal was halted when protests made work impossible.
"You cannot run a plant when bombs are being thrown, you cannot run a plant when workers are being intimidated," Ratan Tata, chairman of one of India's oldest industrial houses the Tata Group, told reporters in Kolkata.
Farmers and activists led by Mamata Banerjee, the fiery chief of the regional Trinamool Congress party, accused the state government of forcing farmers to give up their fertile land for a pittance to make for the plant.
"If someone had put the gun to my head I would not move away but I think Banerjee has pulled the trigger," Ratan Tata said, referring to Banerjee's unyielding opposition to the plant.
Trade lobbies said the problems that engulfed the Nano, due to be sold for 100,000 rupees (2,150 dollars), were a blow to India's efforts to woo badly needed foreign investment.
"Given the global turmoil, foreign investors could decide to go to safer destinations and not come here," said Dilip Chenoy, director general of the Society of Indian Automobile Manufacturers.
The state government had said it would be a "big loss" to industry-starved West Bengal if the Tatas pulled out of the desperately poor region.
"This decision shattered many dreams and the people who worked on the ground. But I think we are doing the right thing-that there was no other option left," said Ratan Tata, who conceived of the Nano as a way to make cars affordable for ordinary Indians.
Industrialisation has been long championed by government officials as a way to pull tens of millions of Indians out of grinding poverty.
But across India, land for factories has turned into a battleground and the Nano row was projected by some observers as a test case for industrialisation.
There has also been violence in Orissa state over South Korean steel giant POSCO's plans for a 12-billion-dollar steel plant, and clashes over plans for other special economic zones, a part of the big push for industrial expansion.
Ratan Tata had said he could have built the Nano plant in other parts of India with better infrastructure but had wanted to develop under-industrialised West Bengal "as our gift" and had not "come to exploit people."
West Bengal Industry Minister Nirupama Sen said the Tata decision "will have a chain reaction in the industrialisation of the state."
But others said the battle had underscored the need to reconcile the needs of big business with those of ordinary citizens displaced for industry.
The Tatas had said they hoped to roll out the car this month and December by the latest. They did not say where they would build the new plant.
"We're going to do everything possible to come close to the deadline we established," Ratan Tata said.
Tata officials have said the first Nanos could be made at other Tata plants and the company has been flooded by invitations by other states to set up a full-scale Nano plant.
Tata Motors poured 350 million dollars into the Singur plant.