Showdown at Singur
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21/09/2008
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Business India (Mumbai)
Tata Motor's plant for the Nano car has been stalled as the CPI(M) and the Trinamul Congress battle it out
The deadlock could not have lasted much longer. After Ratan Tata made a veiled threat to move the Nano car plant from Singur to another location, Mamata Banerjee of the Trinamul Congress could have backed down or intensified her agitation. She chose to do the latter. Her stake in the game was the rural vote in West Bengal for the 2009 Parliament election. Tata Motors was also finding the situation untenable and finally announced that they would be shifting their plant to another location.
While this decision may not be final, it means that the first batch of Nano cars to hit the market would come from some other Tata Motors plant. For the moment at least, an easy resolution is not visible. The project, which was to herald a breakthrough in car design and pricing and was closely followed by global car majors, seems to be stuck in a morass of competitive politics so endemic to India.
The agitation, which had begun in 2006 led by the mercurial Mamata Banerjee, became violent. The violence continued this year, months before the plant was to open in October - the compound wall of the factory was broken, material from inside stolen and employees threatened and prevented from coming to work. The agitation was to intensify from 24th August.
This led Ratan Tata to hold a press conference in Kolkata on 22nd August, when he announced, "We do not want to come to an area where we perceive that we are unwanted. If anybody is under the impression that because we have made this large investment of about Rsl,500 crore, we will not move, then they are wrong. I can't bring our managers and their families to West Bengal, if they're going to be beaten, if there is going to be violence constantly, if their children are going to be afraid to go to school."
State governments from around the country, including Gujarat, Maharashtra and Uttarakhand quickly issued statements inviting Tata Motors to set up the plant in their state instead. The government in West Bengal was visibly upset by Tata's veiled threat to close the plant.
The Nano plant moving out is a setback for the Chief Minister Buddhadeb Bhattacharya. The view among political observers is that in next year's elections, the cpi(m) would gain somewhat in urban areas but might take a beating in rural areas. Bhattacharya had hoped that with the Nano project going through it would strengthen the hand of his chief reform lieutenant, state industries minister Nirupam Sen, who could then be anointed his successor. Nirupam Sen has his political roots in the districts surrounding Singur.
But Mamata Banerjee went ahead with her agitation and road blockade. When Banerjee arrived on 24th August in a cavalcade of, ironically enough, 500 Tata Sumos to begin her siege at the upcoming Tata Motors plant at Singur, it seemed like a face saving political ploy. Banerjee had first resisted the acquisition of the 997 acres in 2006 by going on a 26 day hunger strike despite appeals from the prime minister to negotiate a settlement. The
land acquisition proceedings have also been bouncing in the courts for the past two years and are pending in the Supreme Court.
Banerjee then backed down to say the money being offered was not enough, then asked that the land be given back to unwilling farmers. She alternately blew hot and cool. From her initial demand of no plant at Singur, Banerjee has softened her stand. She now says, "Let the Tatas build the car factory on the 600 acres of land in Singur. But the vendor park can be put up in some other non-fertile area nearby, and 400 acres of fertile land can be returned to the farmers. A car for common people is good but that cannot be at-the cost of poor farmers." She has stuck to this after Tata Motors suspended work at the plant.
Mamata Banerjee had been joined by several politicians, among them Samajwadi Party mp Amar Singh and social activist Medha Patkar, several ngos and Naxalite groups hoping to cash in on the agitation. Amar Singh, known to be close to Anil Ambani, was the joker in the pack, with no previously known view on the matter.
Industry was quick in its support of Tata. Mukesh Ambani became the first major industrialist to back the Tatas. In a statement he said, "A fear-psychosis is being created to slow-down certain projects of national importance. This will be counter-productive for the country's economic growth, its global image as well as our ability to attract investments from across the world."
Other industrialists and associations followed. The Confederation of Indian Industry (en) statement said that the "process of development and growth being held ransom for short sighted, political mileage is unwarranted", The Society of Indian Automobile Manufacturers (siam) stated it would like to appeal to all concerned "that a process must be initiated to arrive at a solution. Such a solution would ensure that the investments of over Rs70,000 crore committed by the industry to be made in the country over the next few years would happen".
When he initiated his industrialisation policy, Bhattacharya did not foresee that opposition parties would not necessarily welcome potential investors in the state. In a candid aside former Kolkata mayor, former Mamata Banerjee lieutenant and cur