MUMBAI: The Nano car plant issue continues to hang in the balance with Tata Motors determined to suspend operations even after the Trinamool Congress called off its agitation on Sunday.
In a brief statement issued here on Monday, the company said it was "distressed at the limited clarity on the outcome of the discussions between the West Bengal government and representatives of the agitators in Singur". Hence, it added, it was "obliged to continue the suspension of construction" at the plant.
Under the compromise formula between Trinamool chief Mamata Banerjee and West Bengal CM Buddhadeb Bhattacharjee on Sunday, ancillary units and vendors at the Tata plant have been asked to suspend work for a week till the committee set up to identify alternative land for farmers submits its report. However, work at the car plant could have continued unhindered. But the Tatas are in no mood to relent.
The key lies in the fact that 400 acres of the project land, which accounts for a lions share of the space for ancillary suppliers, could be forfeited. The Tatas have stated time and again that the project cannot be conceived without the vendor park because it will affect logistics, costs and overall viability of the business plan.
A section of ancillary suppliers told DNA that Tata Motors had assured them that there was no way work would continue if they had to relocate to an alternative site or were compelled to forfeit the land allocated to them.
Some of them have already commissioned their buildings with a handful having installed machinery too. The fact that they will not be able to construct anything on the site for a week is irrelevant since "work has virtually come to a grinding halt for over a month now".
What has particularly bothered the Tatas, sources say, is the fact that the Trinamool Congress has clearly stated that the agitation has only been suspended and not withdrawn.
"The management is obviously paranoid that this issue will only fester in the coming months which could affect smooth production of the Nano," they add. The last decade has seen automobile lockouts in India lead to a big-ticket closure like Peugeot and the near collapse of Fiats operations. This is something the Tatas can ill-afford with the Nano.
The following weeks will, in all probability, see ancillary suppliers deliver parts for the Nano from their existing plants, be it Pune, Gurgaon or Chennai, to Uttarakhand which is part of Plan B for Tata Motors. Sure enough, logistics costs will shoot through the roof but a substantial portion of these could be borne by the Tatas. For the moment, the vendors stand to be the biggest losers because they could end up writing off investments on land and buildings.
