Indian protesters on Monday suspended a siege of a factory set to build the world's cheapest car, but the site stayed shut as Tata Motors demanded pledges it would be able to operate smoothly.
The decision by India's top vehicle maker came one day after the Marxist government in West Bengal state announced a deal to end violent demonstrations over farmland seized in order to build the Nano car factory.
The company said it would only move forward if “satisfied the viability of the project is not being impinged, the integral nature of the mother plant and our ancillary units are being maintained and all stakeholders are committed to develop a long-term congenial environment for smooth operations.”
Tata Group chairman Ratan Tata warned last month he would abandon the plant unless his workers' safety could be assured, even though the company has poured 350 million dollars into the project.
The Nano, targeting millions of Indian first-time car buyers, is slated to retail at just 100,000 rupees or 2,264 dollars.
Protests against the Tata plant have been going on for two years, but they deteriorated in recent weeks, with demonstrators besieging the factory and threatening to kill workers.
Earlier, West Bengal's Trinamool Congress party, which has been spearheading the opposition to the plant, called the promise by the state government to return seized land “a big victory” for evicted farmers.
The pledge was given after three days of talks between the protesters and the government in state capital Kolkata. Tata was not part of the talks.
However, Tata sources insisted Monday no land from the factory site could be returned to the farmers as the car project was conceived on such a tight-costing basis.
The “integral nature of the mother plant and ancillary units is sacrosanct and must be recognised as such” before the plant can reopen, a senior company source who asked not to be named told AFP.
Any move to shift the ancillary units — mainly automotive part vendors — from the plant site to other areas would affect the tightly managed supply chain and drive up costs, the source added.
“We are not closing the window” on a settlement but “we are going ahead with Plan B” to roll out the Nano from other Tata plants, he said.
“We have a business to run — this a project of national importance, the whole world is watching it.”
The plant in Singur on the outskirts of Kolkata is 90 percent complete, and Tata Motors, part of the tea-to-steel Tata Group, has said it aims to launch the Nano in October, in time for the big-spending annual Hindu festival season.
All work on the factory was halted over a week ago when protesters barred workers from entering the plant.
Even though Tata was keeping the plant shut, people in Singur were optimistic it would be saved and praised the agreement between the state government and protesters.
“It's a new dawn,” said plant worker Subal Manna.
The West Bengal government had wooed Tata Motors to set up the plant here, hoping it would lead the way for the state's industrial resurgence and create jobs.
Scrapping the plant would hit Tata Motors' finances, already under pressure from its 2.3-billion-dollar acquisition of British motoring icons Jaguar and Land Rover earlier this year, and from slowing domestic vehicle sales.
The dispute reflects a wider conflict between farmers and industry over land rights across the nation.
On one side are many farmers who say they will starve without their land, while business and government say India must industrialise to create jobs for its army of young people.
