We at Development Dialogues are constantly trying to expose what lies beneath the glitzy exterior of 'development' the world over. The blog was started as an archive for the articles and reports pertaining to the land acquisitions in West Bengal and India. The scope of the blog has since been expanded to include resistance movements against state and corporate repressions from around the world.
Tatas opt for ‘good M’
Ahmedabad, Oct. 7: Moving from a “bad M to a good M”, Ratan Tata today dealt a knockout punch to the tottering image of Brand Bengal by deciding to relocate the Nano plant in Narendra Modi-ruled Gujarat.
Modi said his government had transferred to Tata Motors 1,100 acres of land in Sanand, 35km west of Ahmedabad, rubbing salt in the Left’s wounds four days after the Singur pullout.
The fallow tract, which was with the Anand Agricultural University and was used as a cattle-grazing farm, can easily house a plant to produce the world’s cheapest car and 60 ancillaries which the company believes are critical to the success of the project but found doubters in Bengal, chiefly Mamata Banerjee.
The Tata boss, who had been generous to Buddhadeb Bhattacharjee, gave Gujarat a certificate Bengal could only aspire to now. “In Gujarat, things work and move,” Tata said, praising Modi for the lightning speed at which his government had sealed the deal.
If Bhattacharjee had felt his offer to the group was better than the rest, Tata made it clear Gujarat had gone one up. “It (the deal) is as good as or slightly better than the one we had previously (in West Bengal),” he said, soon after the signing of the MoU between Tata Motors MD Ravi Kant and industry secretary Gouri Kumar. The company will invest Rs 2,000 crore in the project, Kant said.
“Until yesterday, we did not know where to go. Today, we have found a new home, in a friendly, conducive atmosphere. It is unbelievable,” Tata gushed, only four days after he had announced sombrely that he was leaving because Mamata had pulled the trigger.
Mamata spent the day pandal-hopping in Calcutta. Tata did not mention her by name but could not resist uttering the M-word. “I hope there is a bad M and a good M. We need that transition,” Tata said, when asked whether his journey from Mamata to Modi was from a nightmare to homecoming.
If Mamata was oblivious, Bhattacharjee broke the news of “the disaster” to Jyoti Basu in Calcutta, and took pains to assert that his government had tried its best, which was echoed by Tata 2,000km away.
“This is an extremely momentous and happy day for us because we have been through a rather sad experience from a small quarter of residents of West Bengal despite the state government’s efforts,” the industrialist said at the secretariat in Gandhinagar.
For Modi, the Tata decision is sweet revenge on the Left, which has vilified him as a “blot on India’s secular fabric” who was singularly responsible for the 2002 riots. The chief minister, who celebrated his seventh anniversary at the helm today, did not talk politics, but the Left leaders could not hide their anguish.
“It is disappointing. You cannot go into an area and say I will build my house only if everyone gives the assurance that it will not be burgled,” PTI quoted CPM leader Sitaram Yechury as saying on TV.
Officials from neither side were willing to let out details of the deal, saying it was still being finetuned. But finance minister Vajubhai Vala insisted that nothing out of the way had been offered. “We are not giving any tax breaks to the Tatas. Also, they will have to buy the land at the current market rate,” he said.
The current market rate at Sanand, according to government sources, is a little over Rs 24 lakh per acre, though the state has paid almost double that amount to farmers from whom it acquired around 50 acres for building an approach road connecting the site to the Mumbai-Delhi NH 8.
At that price, Tata Motors will have to fork out around Rs 264 crore only for the land, which could affect the bottomline of the cost-sensitive project.
However, sources pointed out that the Gujarat Industrial Development Corporation, which is the custodian of the land, offers an option for staggered payment of land price. The buyer can pay 30 per cent of the price upfront and settle the remaining amount in 40 instalments over 10 years at an interest rate of 12 per cent.
The Bengal government had offered lease rental at Rs 1 crore per annum for the first five years, to go up incrementally till the ninetieth year.
Will the Tatas then be able to stick to their Rs 1 lakh sticker? “Why don’t we wait till the car is launched,” Tata told a television channel. “A lot of things have changed, price of steel, commodities have gone up. I think it is fair that when the car rolls out then the company is able to announce the price,” he said.