India: West Bengal reaches solution to Tata conflict (updated)

KOLKATA, India (AFP) - Tata Motors can go ahead with making the world's cheapest car at a factory in eastern India after talks yielded a compromise ending violent protests against the plant, officials said Sunday. West Bengal state's opposition Trinamool Congress party, which has been spearheading opposition to the plant, said it had reached a deal with the state government that would see some of the land for the nearly-complete factory returned to displaced farmers. Other farmers in the Singur area near Kolkata, the site of the factory set to mass produce the low-budget "Nano" car, would be given compensation -- addressing their complaints that they were forcibly evicted -- officials said.

By Joe Leahy in Mumbai Published: September 7 2008 17:18 | Last updated: September 7 2008 17:18

West Bengal’s government and opposition were inching towards a solution to a conflict over farmers’ land that is threatening to scupper the state’s flagship industrial project, the Tata Nano.

The two sides were locked in talks for the third consecutive day in a marathon effort to save the project, in which Tata Motors has agreed to make the world’s cheapest car in the state in return for tax breaks and other subsidies. "I am hopeful,” said Partha Chatterjee, a leader of the Trinamool Congress, the state’s main opposition party. The crisis began after the Trinamool Congress started mass protests in front of the Nano factory in Singur, near Calcutta, saying that some farmers were forcibly evicted to make way for the plant. The Tata group, which is racing to finish the plant ahead of the planned commercial launch of the Nano in October, suspended construction work indefinitely last week. It claims Trinamool supporters are threatening its workers and preventing them from accessing the site.

Earlier, Ratan Tata, the chairman of the Tata group, warned that he would relocate the plant to another state if the “violent” protests continued. The Trinamool Congress denies its protests have been violent or that it is against the Tata group. It says only that it wants the company to return about 400 acres of land it says belong to farmers forced to give up their land for the project. Indian media reported that the sides were discussing a land-for-land formula in which farmers would be given a small amount of land within the site, to be supplemented by farmland from elsewhere.