The Tata group on Tuesday said it had suspended work at the #320-million plant in India where it planned to make the Nano, the world’s cheapest production car, because of violent protests.
The factory in West Bengal’s Singur district has been under siege for weeks by groups who claim to represent the thousands of farmers unhappy at having their fields taken over for construction of the factory. A number of workers, say Tata, have been targeted by the protesters.
The company said that it had hired consultants to look at alternative locations for the Nano factory. A number of other Indian states have offered it land.
It is now almost certain that the Nano will not roll out in October, when the company was expected to begin selling the car. The news is a blow to the Communist administration in West Bengal, which had acquired 404 hectares from farmers and promised to spark an industrial revolution in a state better known for labour unrest.
Many commentators have begun to worry that India’s much vaunted plan to industrialise will fail before it has begun. ”A headline-grabbing agitation like Singur does instill fear into investors, both domestic and overseas,” wrote Govindraj Ethiraj in the Business Standard.
Many have pointed out that industrial projects in India can be thwarted by protests over land. A survey commissioned by the Times of India showed that 15 projects, an investment of 2 430-billion rupees ($54-billion), had been halted by demonstrations.
Even Tata’s rivals have questioned whether the Nano, a symbol of Indian inventiveness, should be allowed to fail. Mukesh Ambani, head of Reliance Industries and one of the world’s richest men, came out in support of the Nano. ”A fear-psychosis is being created to slow projects of national importance,” he said.
The news of the Nano’s woes came as Tata outlined a rights issue to raise cash for the acquisitive group. The company said it would offer shares with lower voting rights and raise 42-billion rupees to fund the purchase of Jaguar and Land Rover from Ford. Tata Motors said it would also sell assets worth 30-billion rupees. – guardian.co.uk