Posted by: John Elliott | October 4, 2008

“We cannot run a factory with police around all the time” – Ratan Tata

WHO WAS REALLY BEHIND TATA’S TROUBLES AT SINGUR?

So it’s happened. After months of violent protests over loss of farming land, after vicious battles by self-serving regional politicians, and after seemingly endless attempts at a compromise, Ratan Tata has pulled down the shutters on Tata Motors’ low cost Nano car plant in West Bengal and is off to make the car elsewhere.

“We have little choice but to move out of Bengal. We cannot run a factory with police around all the time,” was one of several memorable wrap-up quotes that he produced last night to explain his decision.

Ratan Tata leaving an earlier Singur press conference in Kolkata when it seemed likely he would pull out

Ratan Tata leaving an earlier Singur press conference in Kolkata when it seemed likely he would pull out

He wasn’t blaming the police – they have been guarding the site at Singur from protestors organised by Mamata Banerjee, leader of the Trinamool Congress, a regional political party. Ms Banerjee  has been using the project to try to score points against the state’s Communist-led Left Front government that has ruled West Bengal for 30 years.

 

“We have to shift because of Mamata Banerjee,” Mr Tata said at a press conference in Kolkata last night. So this fiery politician’s ambitions have robbed a state that desperately needs industrial development of a $350m project that would have generated thousands of jobs in the main car factory, in component suppliers located on the same site, and in other downstream businesses.

This is the second time that politicians and powerful pressure groups have turned investment away from West Bengal. A battle between the Communist-led Left Front and Trinamool for control of another part of West Bengal led last year to plans being abandoned for a 25,000-acre chemicals special economic zone (SEZ) at Nandigram amid violent protests where 14 people were killed.

Protests by farmers and the landless labourers against their land being used for industrial development are understandable – and in many cases justified. As Kamal Nath, India’s Minister for Commerce and Industry, said to me last month when I was talking to him about delays in Orissa on a steel plant planned by Posco from Korea, “In a democracy all the stake-holders have to have a voice – and in India they have a particularly loud voice”.

The irony is that Ratan Tata, who heads a government –sponsored Investment Commission set up to help foreign companies like Posco manage their projects in India, could not turn Singur round  – which brings me to a final thought………Is there something happening here that has not been publicised? 

Was someone else encouraging the protests?

I would not be surprised to hear that Tata’s problems were fanned by another autos manufacturer wanting to disrupt the “one lakh” Nano’s launch. I have no evidence of this but such dirty tricks are not unknown. Ratan Tata himself has said publicly that he wonders “who’s financing the protests”.

Ratan Tata in a Nano at the launch

Ratan Tata in a Nano at the launch

There were rumours a few years ago that bureaucrats and politicians were being paid by a foreign car company to disrupt the appointment of top management at Maruti Suzuki, a highly successful Japanese-India joint venture, in order to delay the launch of an important new Maruti model. Has the same sort of thing happened here? Politicians always need funds!

The Tata Nano was unveiled at Delhi’s auto show  in January with a price tag of around 100,000 rupees ($2,130). and was due to be launched on the market this month. The plan was to make 250,000 cars a year at Singur, rising later to 350,000. That will not now happen. Instead the car will be produced in smaller numbers at other Tata locations till a new permanent site is found.

So who has gained? Not Tata, nor West Bengal – nor, in political terms, either the Left Front which has been shown to be weak, or Mamata Banerjee, whose protests have lost jobs, nor the people living in the area, some of whom have lost both their land and Tata jobs.

The only winners are other auto firms that need longer to get their rival cars ready for market.

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Responses

  1. [...] 2008, she led opposition to a $35m Tata Motors car plant at Singur near Kolkata,  saying she was saving poor people’s agricultural land being used for [...]

  2. [...] 2008, she led opposition to a $35m Tata Motors car plant at Singur near Kolkata,  saying she was saving poor people’s agricultural land being used for [...]

  3. [...] I wasn’t a Nano fan when it was launched in March last year, and I still am not. I’ve only see one on the cluttered roads of the Delhi and it looked not only tiny but also desperately vulnerable – which it is measured when against US safety standards. Only about 20,000 have been delivered to dealers, and production has yet to start at the main factory in Gujarat that has been built since local opposition led Tata to abandon its plant in West Bengal. [...]

  4. I agred with you papia. Finaly those farmers got nothing .Politics become champion.Taa fulfil there terget “nano” is in market “bertho dhonis) are agar to buy it.Farmers………….??

  5. Tata says that it is impossible to run a factory under police protection; yet he thought it was possible to steal land with police help.!

    Ratan Tata believed that the CPIM govt. has such a strong hold on the area that he could do as he wished; that was his mistake.

    As someone living in West Bengal, I can assure you that for once Mamata Banerjee has my support. (Quiet possibly other industrialists did fund her)

    Intimidation, bureacratic armtwisting, miserly amounts being paid, plain beatings and even threats of rape — but since it is all in the name of ‘development’ and it happens to the lower classes we are expected to weep that middle class children would be deprived of jobs.
    The middle class believes it is the whole of India — they are shocked when the farmers say “what will happen to my children? Why shall we care babus from Kolkata will get big jobs?” ” So they write in press about how awful it is!!

    Also I am yet to get satisfactory answer about what exactly are the huge number of jobs This car industry is supposed to bring about? How many will exactly get jobs and how many from the affected area and what kind of jobs?

    As one farmer from Singur wrote — ” As long as I had land my family was assured of food; now the land has been taken away and we are told we can work in the houses of the big babus who will work at the factories. From independant landowner to servants. Are not the educated people ashamed of saying this is progress?”

  6. [...] Rama makes some valid points, I agree with John Elliot who points out that West Bengal needed the investment and the jobs. And could Tata’s problems [...]

  7. thanks RR and Sandip – without wanting to be dubbed a conspiracy theory junkie, these sorts of things certainly do happen and I just wondered if it had happened here. Two friends have emailed me privately supporting the idea, though of course without evidence.

    On your main points, it’s specially odd that Tata got it wrong here because it has had experience of problems at its planned steelworks on 3,400 acres at Kalinga Nagar in Orissa where 12 tribals died during protests in January 2006. The government was handling the land acquisition and clearing, and the protests started when the state government was forcibly ousting villagers from the site. Tata Steel then decided that it needed to build trust with the local people itself, so it took over the job of resettlement from the government, and that now seems to be going well. It has re-settled about 750 of the 1,050 families involved but does not yet have access to the full site.

    There’s also a story on the front page of this morning’s Sunday Express about a Tata-Hitachi factory for earth-moving vehicles coming up successfully elsewhere in West Bengal. I presume that, at Singur, Ratan Tata assumed that the magic of his Nano dream, supported by the state government, would carry the day.

    je

  8. I for one don’t subscribe to the ‘sabotage’ by competition theory – tho’ I know many (incldg the Ed of an influential Biz Weekly) has been endorsing it. I would grant competitors – especially global ones – greater credit for their ingenuity than trying to scuttle some other manufacturer’s plans just by a few weeks or months – spending millions to fund a political agitation (that is also being disingenuous about the integrity of our politicians without exception and of very respected social activists such as Medha Patkar).
    In an earlier blog (http://ghoses.blogspot.com/2008/08/nano-vision.html#links)I had made exactly the same point as RR. The Tatas are past masters at land acquisition – they have been doing it for over 100 years across the country. How could they think of going into Singur without engaging with local stakeholders and communities (something they are generally well-known to do months before even breaking ground for a project).
    The answer came even as I type this comment – in a TV programme (Karan Thapar’s “War of Words” on CNN-IBN) the CPM spokesman admitted that, the government didn’t want the Tatas to go to Singur in the first place – they had offered them Kharagpur. But, the Tatas insisted on Singur and the Govt had to agree as otherwise they were faced with the prospect of losing the project to some other state if they didn’t accede to the Tatas’ choice of location.
    As the Trinamool represantative (Dinesh Trivedi) pointed out it is such eagerness on the part the govt going out of their way to accommodate the Tatas is what, perhaps, made them somewhat over-confident of this project – expecting that the Govt would be able to hand-over the land to them on a platter.
    Sandip (www.ghoses.blogspot.com)

  9. John
    Don’t know about this conspiracy theory but a more interesting question for me is how is it that the Tatas, a group that created Jamshedpur for its workers, has been so out of it for the past two years when it comes to the common people who live where it wants to set up factories, irrespective of whether those common people are influenced by their politicians or not. Leaving projects to state governments and politicians cuts both ways as they seem to be finding out.


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