Mukesh Ambani Backs Tata In Times Of Trouble !

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Mukesh Ambani backs Tata in times of trouble

Economic Times

MUMBAI: It’s not just corporate rivalries and bitter feuds that make interesting stories. In fact, most readers are perhaps beginning to accept that acrimonious exchanges and behind-the-scenes machinations by business houses to outgun each other are a way of life for India Inc. So, a statement on Wednesday evening by Mukesh Ambani, strongly backing the Nano project — Ratan Tata’s dream venture — came as a bit of a surprise.

“A fear-psychosis is being created to slow down certain projects of national importance. This will be counter-productive for the country’s economic growth, its global image as well as our ability to attract investments from across the world,” said Mr Ambani — India’s richest man and chairman of Reliance Industries, the country’s biggest private company.

“The Indian industry and the political leadership in the country need to work together to deliver on the aspirations of the millions of Indians in urban and rural areas, ” said the statement issued by Reliance. It is unclear as to what extent this would strengthen the West Bengal government’s resolve to stick to the October deadline for the Nano’s launch and put some pressure on Mamata Banerjee to come to the negotiating table.

However, coming from a traditional business rival, it was a gesture that may go down well in corporate India and political circles, but also bolster Reliance’s public image. Incidentally, Mr Ambani had faced protests during his Reliance Fresh rollout in West Bengal. According to Mr Ambani, “The Nano project is a unique and innovative initiative, which will establish India’s position as a small car hub. The Indian industry must be encouraged to make such large investments in order to build the country’s competitiveness as well as support job creation.”

There has been a media frenzy ever since the project scheduled to be housed in Singur in West Bengal, started facing stiff resistance from Ms Banerjee and her party.

Mr Ambani’s statement also encouraged another big name in Corporate India to speak in favour of the Nano project. Rahul Bajaj, chairman of Bajaj Auto, said: “The impasse created in Singur is extremely unfortunate, not only for the Nano project but also for the industrial development of Bengal. This project must come up at Singur. I have always said that farmers whose land has been acquired by the government in public interest must receive adequate and fair compensation. Return of 300-400 acres of land which are spread all over the Tata land, is, I understand impossible. Hence I plead to Mamtaji to give up her insistence on the return of the land to the farmers and accept on behalf of the farmers an alternate piece of equivalent size of fertile land and an increase in the monetary compensation which has been offered.”

Although no one in Tata Motors is officially “even thinking” about the next course of action, sources have said that in the event of Singur not working out, one option could well be to manufacture the first lot of Nano cars from Pantnagar and Pune before the new site is up and running. As it is, the first batch of around 4,000-5,000 is reportedly ready at Tata Motors’ plants in these locations. These can be rolled out as early as October this year. How things move from this point onwards will be decisive.

The Rs 1,500-crore Nano plant in Singur has been in trouble right from the time it was announced in late 2006, sparking off protests in the area. Since then, Tata Motors has had to deal with more several rounds of protests and flooding at the plant site. As things stand, the bone of contention is the 400 acres which has been earmarked for the ancillary units of the project.

Overall, the West Bengal government has given Tata Motors 1,000 acres on lease. The agitators are pushing for the return of the 400 acres to farmers who are unwilling to give up their land for the project. The WB government says this is impossible as the land is not contiguous. Giving back the land would mean the end of the project, according to both the state government and the Tatas.