[ALOCHONA] Tata Motors shifts Nano plant after land fight

Tata Motors shifts Nano plant after land fight         KOLKATA (Reuters) - Tata Motors Ltd will move the factory for its low-cost Nano car out of West Bengal state after violent protests by farmers who lost land forced it to stop construction, Chairman Ratan Tata said on Friday."Taking all things into account, mainly the wellbeing of our employees, the safety of our contractors and in fact our vendors also, we've taken the very regretful decision to move the Nano project out of West Bengal," Tata said.He made the announcement after meeting state Chief Minister Buddhadeb Bhattacharjee in Kolkata.   Tata Motors, the country's top vehicle maker, had already started looking for other sites at which to build the Nano, which it had originally said it hoped to launch this month. "We will have to make the best of the deadline that we have," Tata said. "We are going to do everything possible to come close to the deadline we had established." Tata said the firm had not decided where to build the Nano but was examining offers of sites from three or four states.   "We hope we would be able to find a location that has a congenial environment," he said. "All these issues we will announce in the next few days when we have a clearer picture." The Nano is expected to be priced at just above 100,000 rupees ($2,130) and has been billed as the world's cheapest car.   The company, India's third-biggest carmaker, had planned to make 250,000 cars at the Singur plant in West Bengal initially, later increasing capacity to 350,000 units. Trouble began after the communist state government acquired farmland for the factory using a colonial-era law which allows land to be taken over cheaply.Work on the plant was nearly complete when farmers, backed by the state's main opposition party, Trinamool Congress, stepped up their protests, saying they had been forced off their land without adequate compensation.   INDUSTRY-FARMER STANDOFF The dispute, which followed similar protests in other states, reflects a larger standoff between industry and farmers unwilling to surrender land in a country where two-thirds of the population depend on agriculture for a living.   The state government then offered compensation which some farmers, backed by Trinamool, rejected as inadequate. Others said they had not agreed to sell their land and demanded the state government return about 400 acres (162 ha)."This is what happens when you seize land, when you use force," said Becharam Manna, a leader of Singur's protesting farmers. "Blame the state government for the Tata decision."   Cost overruns caused by delays at Singur, where Tata Motors has invested about $350 million, had already raised the cost of producing the Nano, which was unveiled to a rousing reception in January and sent rivals scrambling for their own versions.Eventual demand for the Nano is expected to be about one million units, Tata has said.   Analysts say the market has factored in the extra costs, but the firm's share price may fall on Monday because of generally gloomy investor sentiment."What has not been priced in yet is if they manage to get a better deal from some other state government," V.K. Sharma, head of research at Anagram Stock Broking, told Reuters.   Tata Motor's New York-listed shares were down 0.4 percent at $7.23 at 1500 GMT. Before the news, the firm's shares listed in Mumbai had closed 2.5 percent down at 330.70 rupees in a weak market.   (Additional reporting by C.J. Kuncheria and Devidutta Tripathy) http://in.reuters.com/article/topNews/idINIndia-35787720081003?sp=true   Tata abandons cheapest car plant Work at the West Bengal plant was suspended in August India's Tata group has abandoned plans to build the world's cheapest car in the eastern state of West Bengal.   Tata group chief Ratan Tata said: "We have little choice but to move out of Bengal. We cannot run a factory with police around all the time."   He was speaking after protests in a row over land acquired from local farmers. The car, the Nano, is expected to cost about 100,000 rupees ($2,130). It was due to be launched in October and will be ready "this year", Mr Tata said. We will have to make the best of the deadline that we have Tata group chief Ratan Tata The BBC's Subir Bhuamik in Calcutta says the company is initially expected to produce several thousand Nanos this year at other sites in India.   It had planned to make 250,000 cars a year at the Singur plant in West Bengal, rising to 350,000. A number of other car firms also plan vehicles to compete with the Nano but have not yet begun production. The dispute in West Bengal highlights a wider problem between India's growing industry - which needs land - and its farmers who are unwilling to give it up.   'Offers' Work at Tata's Singur plant has been suspended since the end of August following protests led by the state's opposition Trinamul Congress party. Exclusive look at the Tata Nano Mr Tata said the Nano will be built "within this year but I can't tell you where". "We are going to do everything possible to come close to the deadline we had established," he told journalists in Calcutta.   "We have got offers from several Indian states but we have not yet finalised where to produce the Nano... All these issues we will announce in the next few days when we have a clearer picture."   Mr Tata said his group would still consider West Bengal as an investment destination in future. I value the considerable intellectual resources this state has, but something will have to change here," he said. He was speaking after meeting the West Bengal chief minister Buddhadev Bhattacharya and his colleagues. "This is a black day for Bengal. We will have so much more difficulty getting investments now," said the state's industry minister, Nirupam Sen.   Compensation The West Bengal government acquired 1,000 acres of land for the Nano project two years ago. More than 10,000 farmers accepted compensation for their land, but just over 2,000 of them refused and demanded land be returned.   During the protests Tata's engineers and workers were attacked, prompting the group to stop work. Our correspondent says the Bengal governor then intervened and tried to mediate a deal between the government and the opposition but that did not work. The plant was seen as a key part of industrialisation efforts in what is one of India's least developed states. http://news.bbc.co.uk/2/hi/south_asia/7651119.stm

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