Companies

Singur Bill remains vague on compensation

Pratim Ranjan Bose Abhishek Law N. Ramakrishnan Kolkata/Chennai | Updated on June 14, 2011 Published on June 14, 2011

A copy of the Singur Land and Rehabilitation Bill which has been tabled by the West Bengal Governement at the state legislative assembly on Tuesday.   -  A. Roy Chowdhury









The 280-page Singur Land Rehabilitation and Development Bill, 2011 has little clarity on the issue of compensating Tata Motors and host of its ancillaries who had commissioned its plant and machinery till the Tatas decided to abandon the project in October 2008.

In section 5 under “Payment and amounts” it says the amount of compensation would be determined by the District Judge of Hooghly on application by Tata Motors. The amount to be determined shall carry a simple interest rate of 6 per cent. On vendors it says: the amount of “premiums” paid by the vendors be refunded after deducting the amount of arrears of rent left unpaid.

However, under clause 1 and 2 of the “Statement of objects and reasons” it says the State-controlled West Bengal Industrial Development Corporation leased out 647 acre land to Tata for setting up the Nano facility “without charging any premium”. On the vendor companies, who were due to be allotted the residual land (of the total project size of 997 acre), the Bill says, “None of these (vendors) industrial undertakings have taken any step for obtaining the lease in terms of letters of allotment or have not set up any industry and the land has been left unutilised for more than three years.”

According to sources, in a written communication to WBIDC at the end of last year, Tata Motors indicated that the company has recorded a loss of Rs 440 crore net of the equipment it had shifted to Sanand and expects to be compensated. The company also expected its vendors to be compensated with Rs 170 crore.

While Tata has not made any comment on compensation issue, Dr Surinder Kapur, Chairman and Managing Director, Dr Surinder Kapur, Chairman and Managing Director, Sona Koyo Steering Systems Ltd, said the company would ask the Government for compensation.

“We went there for Tata Motors. Whatever they do for Tatas, they must do for us also,” he said. The company had constructed the building and also put in place some material, which it removed.

“As long as they compensate us for what we have spent, we will be happy. We are not asking for any compensation of loss of profit,” Dr Kapur said. Sources suggest that apart from Sona at least 22 other vendors had set up facilities partly or fully at the time the project was called off.

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Published on June 14, 2011
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