Tata Motors, the Indian multinational automobile company, must have thought that after Tata Nano's Singur plant debacle four years ago, the Sanand plant will face no problems after Gujarat government vowed full support for its the new facility. It has been revealed that the current situation is also not so smooth with the government's failure to provide the first instalment of the promised Rs. 2,000 crore loan to the company.
Both the Tata Group and Gujarat government are facing a stiff deadlock on the loan amount and annual payment. Sources have revealed that a Gujarat government committee has provisioned a tentative loan of Rs. 2,138.85 crore at 0.10 per cent annual interest, but Tata Group has declined the offer citing the amount much less in terms of its requirement.
Reportedly, a series of meetings organised between government officials and Tata executives to solve the mutual agreement have failed comprehensively. According to company’s claim and government's decree dated January 1, 2009, the Sanand-based Tata Nano production facility comprises an estimated expenditure of Rs. 3,466 crore, inclusive the cost of shifting it from Singur.
Kamal Kumar Dayani, Commissioner of State Industries, has revealed that the government has put aside Rs. 120 crore as the first instalment and there has been no official claim for the loan from Tata Motors. Dayani said that the loan amount will be not be dispensed unless the company files an official claim for it. On this he quoted, “We haven’t received a formal claim from the company.”
In an email response, a spokesperson for the Tata Group expressed the company’s stance and said, “The agreement between the company and the Government of Gujarat is internal to the two parties, and therefore we cannot engage on this topic.”
According to a State Support Agreement, mutually agreed by the Tata Group and Gujarat government in 2008, the interest rate was fixed at 0.10 per cent annually for the loan to be paid back in 20 years from its outset. Sources also reported that both the parties were fighting over land price and disbursement. Tata Group was supposed to pay Rs. 400 crore to the state government against the consideration of 1,100 acre land provided to the auto major near Sanand.
The Sanand Tata Nano could have not existed, if Narendra Modi, Chief Minister Gujarat had failed in his attempt of persuading Ratan Tata bring the Nano production facility to Gujarat after his frustrating experience in Singur that led to rampant political unrest and local agitation. Tata Motors is the sole receiver of government assistance among several auto majors carrying operations in Gujarat.
