Tata Motors has prepared a compensation package for Nano suppliers forced to relocate their units to Sanand in Gujarat from Singur after work on the 95%-complete factory there was stopped after violent protests over land seizures. But the automaker has nonetheless decided to keep 997 acres at Singur and renew the lease which expires on 31 March, a local newspaper said.
Commercial Nano production will begin in Sanand from April, the Economic Times of India (ET) reported, adding that the company had come to an agreement with vendors who will be compensated in phases.
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“The company’s move to enter into a compensation package with vendors has been triggered by a recovery in automobile sales. Secondly, Tata Motors also wants vendors to be ready with their units at Sanand before commercial production kicks off and therefore has come forward with the compensation package,” an unnamed Delhi-based vendor, supplying chassis and heavy duty stampings for the Nano, told the paper.
The report said it was likely compensation would take care of at least 75-80% of the losses incurred by Nano suppliers due to the relocation costs. Automobile industry insiders estimated the package at around “INR200 crore” (INR2bn; US$42.2m; EUR32.6).
However, a company spokesman told ET: “We have done everything possible to help our vendors. We cannot quantify the size of the compensation package. It will vary from vendor to vendor depending on how much they had invested in their units at Singur.”
The paper noted that suppliers were still holding Singur land and waiting for Tata Motors to sort out the issue with the West Bengal government. Supplier sources said they were not talking to the state government individually about returning the land but would instead wait for Tata Motors to move. The West Bengal Industrial Development Corporation had earmarked about 290 acres adjacent to the mothballed plant for the vendors’ park at Singur.
The Tata Motors spokesman added: “The Singur land is still with us and we will retain it. The payment to renew the lease will be done as and when required.”
Tata chairman Ratan Tata last year said the automaker could return the land to West Bengal if a deal could be agreed.
According to ET, many of the 56 suppliers at Singur had begun work and completed a major part of their construction at the site before construction of the almost-complete plant was called off. Caparo Engineering, Bosch Chassis Systems, Gabriel, Lumax Industries, Rasandik Engineering Industries India, Sona Koyo Steering Systems, Rucha Engineers, Tata Ryerson were among suppliers that had started construction at the site.
Tata Motors began sales of the Nano – produced temporarily at a unit in Pantnagar in the northern state of Uttarakhandin – July last year. It is scheduled to roll out the tiny, cheap car from Sanand later this year.
Longer term plans include better specified, more powerful models for export plus electric and hybrid versions.
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