Will Nano drive to Dharwad?

Will Nano drive to Dharwad?

Published on Sat, Sep 20, 2008 at 17:41 , Source : CNBC-TV18

As the Tata's get a green signal from the Karnataka Chief Minister Y S Yediyurappa to set up the Nano plant in Dharwad, the question arises how feasible is it for the Tata's to actually make the shift?

There is a Telcon plant in Dharwad owned by the Tatas and soon if things go the Karnataka government's way then the Nano could be its new neighbour. Chief Minister Yediyurappa has sent Tata Motors an open invitation to set up a 1000 acre plant

BS Yediyurappa, Chief Minister, Karnataka said, "I met Tata Motor's executives and their Dhadwad unit will be operational within a month. I offered them to shift to Dharwad if they want to from WestBengal and I offered them all assistance. They are very receptive. Now the decision is left to them."

With CM Yediyurappa going all out to make sure that the Tata's get their plant here in Dharwad it's a win win situation for both. The Tata's get a plant for the Nano and for Yediyurappa they get investment in Northern Karnataka.

But what makes the Dharwad plant an attractive option for Tatas? Dharwad is close to Pune, the manufacturing headquarter of Tata's. The presence of Tata's exisiting plant for its marco polo bus unit is another plus point. Vendor parks for Tata's commercial vehicles have set up base there plus vendors of Toyota in Bangalore and Tamil Nadu are close by. Also, South India constitutes almost 30% of the passenger car market.

But, there is flip side to this story. The Tata's will have to start from scratch in Dharwad as most of the technology used in the Marcopolo plant cannot be used to manufacture the Nano. Regular power supply in Northern Karnataka is a problem. Finally, the additional investments in Dharwad may push the price beyond Rs 1 lakh.

The final answer on whether or not the Nano will have a made in Karnataka tag will be known in the next two months.

Confusion over Karnataka’s offer

Confusion over Karnataka’s offer

Special Correspondent - The Hindu

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Company must use land immediately: Minister

1,000 acres needed in a contiguous

parcel, says Ravi Kant

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Dharwad: There is some confusion about whether the Karnataka government has offered a fresh allocation of 1,000 acres for locating its Nano small car project in Dharwad. This is significant because Tata Motors already has more than 660 acres of unutilised land in the Belur-Dharwad area near Dharwad town.

Minister for Industries and Commerce Murugesh Nirani told The Hindu that the “offer is at an initial stage.”

“The government would allot whatever land the Tatas required for the project if the company used it properly.” He clarified that “the company would have to use the land immediately without keeping it idle.”

Mr. Nirani said: “The company has not yet made up its mind and it has to convince us about the quantum of land it actually needs.” He said the land already allotted to Tata Motors was “not excess land.” “They need it for their future expansion,” he explained.

Familiar terrain

For Tata Motors Dharwad is not unfamiliar terrain. Tata Motors, through its subsidiaries and joint ventures, already possesses considerable real estate in and near the town. In 1996 Telco (as Tata Motors was known then) was allotted 647 acres of land in the Belur Industrial Area near Dharwad.

Of this, 119 acres was transferred to Telco Construction Equipment Company (Telcon), which manufactures earth-moving equipment. Telcon is a joint venture between Tata Motors and Hitachi Construction Equipment Company, in which Tata Motors holds a 60 per cent stake.

After Tata Motors entered into a joint venture with the Brazilian bus maker, Marcopolo, in 2006, it transferred another 123.45 acres to the joint venture company. This bus-building facility is set to go on stream next month. Tata Motors also transferred 18 acres to TML Distribution Company Ltd. (TMDCL), a fully owned subsidiary.

This means that in the Belur Industrial area Tata Motors has utilised only 283.45 acres, leaving 353.55 acres unutilised.

In addition, it was allotted 300 acres of land in the Dharwad Growth Centre Industrial Area last year.

Sources in the Industries Department told The Hindu that the company has 663.55 acres of surplus land in the area.

The point is whether the 1,000 acre offer reportedly mentioned by Tata Motors Chairman Ravi Kant in Bangalore on Thursday includes this “surplus.”

Rural Development Minister Shobha Karandlaje had, in late August said the State government was willing to allot 50 acres to Tata Motors, which, in addition to the 900 acres it already possesses, would be enough for the Nano project.

This would suggest that there is a wide variation between what the State government had in mind when it made its offer to the Tatas and what the Tatas expected.

Mr. Ravi Kant had pointed out that the company requires 1,000 acres in a contiguous parcel for the Nano project, so that it can accommodate its vendor units within the same complex. After the recent agitation in Singur, the company had rejected the West Bengal government’s offer of additional land for what it would surrender to farmers from within its allotted portion. The company had said it would require the land to be contiguous.