Vendors demand 100% compensation from Tata Motors for Singur investment

Facing liquidity crunch, the vendors of Tata Motors are looking for 100% compensation for their investments at Singur in West Bengal. While the exact investment by the vendors so far could not be known, industry sources said it could be around Rs 600-700 crore. Ratan Tata, chairman of the Tata group, announced the pull out of the Rs 1,500-crore small car project from Singur in October 2008 following violent protests from the Opposition.

"The company had offered us 75% compensation, but we have demanded the entire amount," said a New Delhi-based vendor. According to him, Tata Motors wanted them to absorb at least 25% of their investment in Singur. "It is difficult for us, especially in a financial situation like this," he said.

The West Bengal Industrial Development Corp (WBIDC) had earmarked about 290 acres, adjacent to the proposed Nano plant, for vendors' units.

Around 60 vendors intended to set up their units at the site. Caparo Engineering, Bosch Chassis Systems, Gabriel, Lumax Industries, Kinetic Engineering, Rasandik Engineering, Rico Engineering, TI Metal Forming, Sona Koyo Steering Systems Ltd, Exide , Subros, Beher, Rucha Engineers Pvt Ltd, and Tata Ryerson are some of them.

Meanwhile, vendors are also looking at the possibility of moving their assets from Singur as there has not been any activity at the site during the last four months. They are reportedly looking at the possibility of returning the land to the state government.

Tata Motors has asked the vendors to take up the issue of moving assets with the WBIDC. According to sources in the government, returning land would be a complicated task as there are "legal and contractual obligations".