Singur Impasse: Tata Motors hardens stance, West Bengal govt. backtracks on truce "deal"

The state government and TMC had reached an agreement on Sunday, September 7, that the government would return the disputed 400 acres of land to the farmers while TMC-led protesters would call off its protests and allow Tata Nano project to continue.

The accord ended the 15-day standoff between the state government and TMC in Sangur that began on August 24 and was marked by violent protests and demonstrations.

However, crying foul, Tata Motors refused to commence work at its Nano plant, saying that it was "distressed" at the limited clarity in the outcome of talks.

It may be recalled that on September 7, West Bengal Governor Gopal Krishna Gandhi who had mediated a truce between the protesters and the state government, had said the West Bengal government "has taken the decision to respond to the demands of those farmers who have not received compensation by means of land to be provided to the maximum within the project area and the rest in the adjacent area."

"The government and those who have been agitating on behalf of the farmer will cooperate with each other for the benefit of the industry, agriculture and ancillaries," the governor had said.

A committee would be set up to oversee the return of land to the farmers within a week, Gandhi had said. On the basis of the committee's report, part of the land that would be returned to the farmers would be carved out from the project site and accordingly, the affected component vendors would be shifted to adjacent regions, the governor had said.

Meanwhile, the vendors were also urged not to go ahead with the construction of their respective facilities.

Though the quantum of the land was not disclosed in the governor's statement, TMC's firebrand leader Mamata Banerjee said the state government had agreed to return about 400 acres of land (300 acres inside the Nano project site and 100 acres outside the site) and request the vendors to move to adjacent land.

However, earlier this week, the state government did a volte-face, saying it never agreed to return the land acquired for the Nano plant to the farmers or relocate the vendors to adjacent land. "There will not be any change in the Tata project nor any relocation of vendors' park," Nirupam Sen, West Bengal Commerce and Industry Minister, said.

"The Nano project is an integrated project and the mother plant and the vendors' park are inseparable. Sunday's talk was not a final agreement on land reallocation. The state government has not reached any such consensus on this matter with the opposition during the series of meetings it had with them and even with Banerjee. The main plant and the vendors' park will be in the same plot. After keeping these two intact, the committee that has been formed will look into how much land can be taken out for giving to the unwilling farmers. There was no discussion (with the opposition) on disintegrating the project or relocating it," Sen said.

"We have assured the Tatas again that no land will be taken out of the project area and the state government wants Nano car to roll out from Singur," he added.

However, clearly unimpressed with the developments, Tata Motors said it was "distressed at the limited clarity on the outcome of the discussions." It was also aggrieved, the company said, as it was not invited to participate in the talks and its opinions were totally disregarded.

Under the given circumstances, "Tata Motors is obliged to continue the suspension of construction and commissioning work at the Nano plant," the company said in the statement.

The company said that the Nano project would not be viable unless some 60 key suppliers, which have invested over $100 million, are allowed to continue construction at the emerging auto hub.

"We will review our position only if we are satisfied that the viability of the project is not being impinged, the integral nature of the plant and ancillary units are being maintained and all stakeholders are committed to developing a long-term congenial environment for smooth operations of the plant in Singur," it said.

The state government, the company said, should not take any steps that would upset the government's commitments over the integrated nature of the Nano project in Singur as this could have a bearing on the interest of the company. "The government should not take any step which will disturb this arrangement (the integrated nature of the Nano project). We would like to be clearly told about any future arrangements, understandings or commitments that will go contrary to the agreement (between Tata Motors and the state government), and which will result in not honoring the commitments," it said.

According to a Tata Motors official, the company was doing everything possible to launch the Nano on time as planned, around October, the peak of the festival season in India and if the Singur protests continue, it would relocate elsewhere. The company, the official said, is upset with the fact that people with little or no knowledge of the synergies involved in the Nano project are taking definitive calls.

However, the official confessed that shifting the Nano location at this stage would mean that the company would not be able to start off with 250,000 units of dedicated capacity for Nano as it had planned in Singur.

The best thing, the official said, would be to commence work in Singur as the Nano plant is over 85 percent complete and most of the vendors of the company have already begun setting up their plants there.

However, the official said, the company also could not afford to remain a silent spectator in the ongoing dispute as each day's loss of work in terms of man hours is costing them millions of dollars.

"The company has spent Rs.1500 crore in the Nano project in Singur. However, due to the protests, work has been suspended at the plant and costs could escalate by another Rs.200-300 crore," the company official said.

On conditions of anonymity, the company official said that Tata Motors has already asked its suppliers to deliver the components for about 200 Nano cars by next week to its plant in Pune, Maharashtra.

Though a panel has been appointed by the disputing parties to survey the disputed site and submit its report by the end of this week, the official said Tata Motors is doubtful whether it would be possible. "This week the Joint Committee on Singur will be inspecting the site to determine what portions of the land on the Nano plant site should be returned to the farmers. However, we are unhappy about the developments and are quite skeptical as to whether a solution will be reached by this week," the official said.

"The Nano project is critical to us. It is aimed at first-time car buyers in India, where more than 45 million people use motorcycles. Due to the ongoing dispute, Nano's future in West Bengal has becomes uncertain. But we have to protect our employees from violence," he said.

However, TMC's Banerjee said suspension of work by Tata Motors is not her party's fault. "I am not bothered about who is saying what. Whether or not Tata wants to stay is its internal problem. They cannot blame us. We want both industry and farmers to flourish here."

As per the agreement reached between the state government and TMC, the government, Banerjee said, is now bound to return the disputed land to the farmers and shift the ancillary units to adjacent land. "As per the agreement, maximum land has to be returned from the project area. No one can violate this agreement. The government cannot back out of the agreement," she said.

Agrees TMC spokesman Partha Chatterjee. "The agreement on the return of land to unwilling farmers was signed by Nirupam Sen and myself in the presence of the governor, the chief minister and Mamata Banerjee. There is no scope any misunderstanding or lack of clarity," he said.

ABOUT THE SINGUR IMPASSE

India's third largest car maker, Tata Motors, which had unveiled the Nano, billed as the world's cheapest car, in January this year, had zeroed in on Singur, a village near Kolkata, the capital of West Bengal, to set up its first Nano project, which has been billed as key to make the state, ruled by a coalition of communist parties for more than three decades, more investor-friendly.

However, during the process of land acquisition, which the state government undertook on behalf of the company, many farmers complained that they were forced off their land and offered paltry compensation to make way for the Nano plant.

Since 2006, state opposition party, Trinamool Congress or TMC joined in the fray, alleging that the state government cheated poor farmers by buying their lands for Tata Motors plant at throwaway prices.

According to TMC, a total of 997.11 acres was acquired by the government for the project, of which 691.66 acres belonged to farmers who gave their land willingly.

However, using colonial era land acquisition laws that allow states to buy land for undefined "public purposes," the government usurped about 400 acres of land from about 2300 farmers who had refused to part with their fertile land.

These farmers who did not want compensation, should be given their land back, TMC had said, and, hence the protests.

This standoff, economists claim, reflects the complexities India faces as it tries to haul 456 million of people out of absolute poverty through the promise of industrialization.