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Big plans for small car
Facility to be among world’s largest

Calcutta, Sept. 8: If the Nano plant in Singur is allowed to run at full capacity, it will rank among the largest car-making facilities in the world, information culled from a government document suggests.

The document, released by the West Bengal Industrial Development Corporation (WBIDC), outlines the terms of its agreement with Tata Motors for the lease of 997.11 acres and says the plant will make 250,000 cars a year working in two shifts.

The capacity will rise to 350,000 units when the plant operates in three shifts, but there is no time schedule fixed for the ramp-up.

That’s not all: the Nano mother plant will also make “aggregates” or parts for another 500,000 cars that can be assembled at other units.

It could not be immediately ascertained whether the“aggregates” would be for Nano cars. If that is the case, the Tatas may be looking to make as many as 8.5 lakh Nanos a year.

Put that in perspective: all the carmakers in India had together produced 1.76 million cars, vans and sports utility vehicles in 2007-08.

This means that the Tatas could potentially make about half of all cars produced in the country last year.

Of the 997 acres, the Tatas have got 645.67 acres on a 90-year lease.

The WBIDC has apportioned 290 acres for the 60-plus vendors that the plant will eventually have.

The Tatas will get the 645 acres for the mother plant at a very low rent of Rs 1 crore a year in the first five years; this will go up to Rs 20 crore a year in the last 30 years of the 90-year lease.

A back-of-the-envelope calculation shows that the heavily back-ended lease payment plan means that the Tatas will have to fork out a little over Rs 855 crore during the 90-year period with Rs 600 crore to be paid in the last 30 years.

The vendors — all picked by Tata Motors — will have to pay a rent of Rs 8,000 an acre for the first 45 years and Rs 16,000 an acre for the next 45 years. “On expiry of the 90 years, the lease terms will be fixed on mutually agreed terms,” the document says.

The government also sweetened the package for the Tatas with two highly subsidised loans to blunt the advantages of the special tax breaks that Uttarakhand and Himachal Pradesh could offer investors in the two hill states.

The Opposition had been demanding that the details of the deal be revealed.

The government had earlier revealed parts of it in the Assembly and read the deal out to the Assembly standing committee on industry but refused to make it public, saying the Tatas had to give their consent for that.

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