Tata pullout @ Singur and What's nxt ?

Months of uncertainty over the fate of the jinxed Nano project was broken finally on Friday, with Ratan Tata announcing a complete pullout from Singur, a mere 48 hours before the festival season starts off in West Bengal.

Mr Tata declared that he was pulling out from Singur, not because of the West Bengal government’s attitude, but because of ‘Mamata Banerjee’ and her agitational ways. The company has displayed immense patience and had sincerely hoped that the situation would improve.

Ratan Tata reiterated that the project was to be a showcase plant which would have considerably enhanced the visibility of the State, created jobs for the younger citizens of the State and through the company’s community programs, would have enhanced the quality of life of the urban and rural population.

Well, now considering that Tata has decided firmly to quit Singur, we look at the many options Ratan Tata is being offered for Nano plant relocation and also the aftermath in West Bengal.

The Aftermath :

• The decision by Tata Motors to move the Nano project out of West Bengal after violent protests may affect the broader investment climate in the country, detering foreign investors and denting economic growth.

• Though the immediate impact would be limited to West Bengal as the Tatas move to a more industry-friendly state, it would have wider repercussions as more states may adopt a harder anti-industry tone for political gains.

Who will BAG the Project ?
...and the nominees are:

• Gujarat: The state has offered three strategic locations to Tata Motors, for setting up the Nano plant in Gujarat - Mundra in Kutch district, Charodi in Sanand taluka of Ahmedabad district and one location in the Surat district.

• Karnataka: Karnataka Chief Minister B S Yeddyrappa stepped up its efforts to lure Tata Motors to shift its small car project to Karnataka,and invited Tata CMD Ratan Tata for discussion.

• Maharashtra: As Ratan Tata made Nano's exit from West Bengal official, Maharashtra Chief Minister Vilasrao Deshmukh renewed his invitation to set up the car plant in the state. He reiterated that his government will give all necessary facilities to start the Nano plant in the state.

• Orissa: Chief Minister Naveen Patnaik asked him to utilise the company's unused land at Gopalpur in Ganjam district and avail all facilities provided to investors under the Industrial Policy Resolution-2007 and where Tata already have in their possession about 3700 acres land since 1998.

• Uttarakhand: The government is keen to provide every possible assistance to the industry for relocation. Chief Minister B C Khanduri also highlighted the advantages such as good rail, air and road connectivity, availability of continuous electricity and tax incentives on account of special industrial package.

Considering the tragic pullout of Nano project from West Bengal, Ratan Tata, although being offered varied lucrative locations for Nano, will make decision only after being assured of 'no politics' in business.

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What brought Tata to Singur ?

The agreement between Tata Motors and the government of West Bengal to manufacture the world's cheapest car in the state involved much more than subsidies on land and interest paid on bank loans. Here are few of the allurements:

• The government worked out a package - which included tax paybacks and concessional power, to match the benefits the plant would have enjoyed in Uttarakhand and Himachal Pradesh, both designated backward areas that attracted central tax concessions.

• The state government will provide to Tata Motors a loan of Rs 200 crore at 1% interest per year, repayable in five equal annual installments starting from the 21st year of the date of disbursement of loan.(as per the documents, which the West Bengal government released on Monday)

• This loan was disbursed within 60 days of signing of the agreement in May 2006.

• The West Bengal government will also provide electricity for the project at Rs 3 per KwH, against the going rate of Rs 4.15 per KwH.

• In the case of a more than 25 paise per KwH increase in tariff in every block of five years, the government will provide relief through additional compensation to neutralise the additional increase.

• The state government also promised to revisit the computation of the comparison of benefits offered by Uttarakhand and Himachal Pradesh.

• The incentive package in these states comprised excise exemption for 10 years and 100 per cent income tax exemption for the first five years and 30 per cent for the next five years.

• The state government also subsidised the cost of land required for the factory and the interest paid by Tata Motors on loans taken to build the project. (Thus, the West Bengal Industrial Development Corporation is to provide Industrial Promotion Assistance in the form of a loan to Tata Motors at 0.1% interest a year.)

• In other words, the state government would repay Tata Motors the VAT and CST collected on each Nano sale and as a result not earn anything as tax. This benefit will continue till the balance amount of the benefit offered by Uttarakhand was reached on a net present value basis.

• The agreement also said Tata Motors and the government of West Bengal will make joint efforts to maximise sales of the car in West Bengal.

• Under the agreement, WBIDC would provides 645.67 acres to Tata Motors Ltd on a 90-year lease, on an annual lease rental of Rs 1 crore per year for the first five years with an increase at the rate of 25 per cent after every five years till 30 years.

• The agreement says Tata Motors will manufacture 250,000 cars a year on a two-shift basis, which could be expanded to 350,000 on three-shift basis.

• In addition, the Singur unit would act as a mother plant for many aggregates to tune of 500,000 cars.

• Tata Motors told the West Bengal government it would be investing over Rs 1,500 crore and vendors were likely to make further investment of over Rs 500 crore.

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The Tata - Singur row continues

Singur hasn’t woken up to a more tense dawn. Every morning at 6.30 the first shift begins at the plant. Two hours later, it’s time for the general shift. Soon the plant becomes abuzz with about 4,000 workers racing against time to set up the country’s quickest car plant.

Every morning buses are provided from Singur station and different points, including Kolkata, to bring workers to the site. But now it looks like a war zone.

The political showdown on Tata's Nano car plant loomed larger when Ratan Tata declared that if things didn't get better in Singur, the company would consider a pullout.

Mamta banerjee insists she is not in favour of violence, but is not responsible for individual actions. "We are not against the industry but industry and agriculture should co exist," said Mamata Banerjee, leader, Trinamool Congress.

But there are voices of support for the Nano plant building up. "We want the factory because it will help us find work," said a worker.

The first round of talks ended on a positive note with the Leader of the opposition saying the talks were heading for a solution. A press statement issued by Raj Bhavan had said the discussions were held in a constructive spirit with the intention of providing a way out.

Meanwhile, at Singur there was no political activity at the dharna manch of Trinamool Congress chief Mamata Banerjee.

The company manufactures the Nano at US$2,500, the world's cheapest car at the Singur factory, and it had intended to launch the vehicle by the end of this year. To avoid delaying the launch, Tata has said it will produce the car at factories elsewhere in the country.

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World's most eco-friendly car - Tata OneCat

You must have joked in the past saying yea run your car using AIR. Well it will never be a joke anymore. The major automobile company from India, Tata Motors and the famous automobile engineer Guy Negre are going to launch a brand new car - The Tata OneCat.

This new zero-emission vehicle, with five seats and glass fiber body, weighs 350 kg and runs on compressed air stored in carbon fiber tank. The designer of this car claims that the car can achieve 120mpg on longer journeys and would be pollution free. The air tank will take three minutes to fill the air from the compressor.
The car would have a range of around 300 km between refuels. The cost of a refill would be about Rs 90. For longer journey one can use conventional fuel like diesel and petrol but with air one can drive the car at speeds below 50.
The car will be ready for its launch in India and Europe by the end of this year or early 2009 within a price range of between £2,500 and £3,000. Expecting the car to be economical Negre said, “The first buyers of the air car will be people who care about the environment."

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