27. Nano Car Protests Off
by Saikat Chatterjee
Sept. 8 (Bloomberg) - Farmers blockading Tata Motors Ltd.'s plant to make the world's cheapest car, called off their protests, ending a two-week-long impasse after Tata threatened to move construction of the $2,500 Nano elsewhere in India.
The Trinamool Congress party, which led a campaign against West Bengal state giving agricultural land to Tata Motors, and its leader Mamata Banerjee, will make an announcement regarding the suspension of their protest, state Governor Gopal Krishna Gandhi said in a televised announcement. The plant is being built at Singur in the eastern Indian state.
The end of the protests will allow Tata Motors to resume factory construction, suspended after the company said employees were threatened by supporters of the Trinamool Congress. The political party wants the state government to hand back some of the land to farmers, who say they were not compensated.
``The uncertainty about closing down the plant is getting resolved,'' said Vaishali Jajoo, a Mumbai-based analyst at Angel Broking Ltd. ``Moving the project out of there would have been costly and they can now save the money and also the timeline of the project,'' she said in a phone interview today.
Government Compensation
The state government ``has taken the decision to respond to the demands of those farmers who have not received compensation,'' Gandhi said. The government will provide land within the project area and the rest in adjacent sites, he said yesterday after a meeting with the state government and Banerjee.
Debasis Ray, a Mumbai-based spokesman for Tata Motors, India's largest maker of trucks and buses, declined to comment in an e-mailed response to Bloomberg queries.
A committee will be set up to oversee the return of land to the farmers within a week, Gandhi said.
The Trinamool Congress, the biggest opposition party in the communist - controlled West Bengal state, started an indefinite protest outside the factory on Aug. 24, demanding that the land acquired for Tata Motors' component vendors be returned.
Gandhi acted as a mediator with the state government and the Trinamool Congress-led grouping that sought the return of the land in Singur, near the eastern city of Kolkata, the state capital.
Tata Motors Chairman Ratan Tata said Aug. 22 that he may move the factory even after spending 15 billion rupees ($338 million) on it to protect employees from violence.
The Nano car is aimed at first-time car buyers in India, where more than 45 million people use motorcycles. At about 100,000 rupees, the Nano will cost about half Suzuki Motor Corp.'s Maruti 800, the cheapest car on the market now.
Tata Motors rose as much as 6.6 percent to 447.9 rupees in Mumbai trading today and changed hands at 436.35 rupees at 10:15 a.m. in the city. The benchmark Sensex index climbed as much as 4.3 percent.
