After a controversial stay in West Bengal, Tatas on Tuesday shifted their Rs one-lakh car Nano project to Sanand near Ahmedabad at an investment of Rs 2,000 crore, delcaring that efforts will be made to roll out the world's cheapest car from a make-shift plant to meet the deadline.
"This is an extremely momentous and happy day for us because we have been through a rather sad experience from a small quarter of residents of West Bengal despite the state government's efforts," Tata Group Chief Ratan Tata said at a joint press conference with Cheif Minister Narendra Modi.
The MoU was signed by Tata Motors Managing Director Ravi Kant and Industrial Secretary Gouri Kumar.
Praising Modi for speedy allocation of about 1,100 acres of centrally located land, Tata said the company had a great deal of urgency in having a new location and was driven by the reputation of the state.
"The site in Gujarat, already under the possession of the state government, will help Tata Motors establish a new dedicated mother plant with the shortest possible time lag and least possible increment project cost," he said.
Together with Tata Motors, about 60 vendors would also move to the new location.
Asked about the over-all deal offered by the Gujarat government, Tata said, "it is as good as or slightly better than the one we had previously (in West Bengal)."
Gujarat was one of many states in the race for Nano car manufacturing facility. Welcoming Tatas, the Chief Minister said, "Tatas and Gujarat have started a new chapter of partnership which will give a new direction and dimension to the state. "After the Nano car project, Gujarat will make an important place in surface transport."
To begin with, Tata Motors would produce 2.5-3 lakh cars annually and the capaicty is expandable up to five lakh cars per annum, Tata said.
When asked about the timing of launching Nano, Tata said, "It will be our endeavour to be close to the timeline so that we can keep our promise."
He, however, did not specify any timeline and said the company would make an announcement in this regard later.
"Building this plant in Gujarat will take some time and we have some make-shift plan to introduce Nano in the market in the interim month while the plant is being built," he said.
A company statement said it would explore the possibility of manufacturing Nano at its existing facilities in Pune and Pantnagar and would launch the car in the last quarter (Jan-March) of the current financial year.
Meanwhile, reports from Uttarakhand said 'limited production' of the world's cheapest car will take place in Pantnagar.
"Tata Motors officials have conveyed to the state government that limited production of Nano will be held in Pantnagar despite their decision to take the mother plant to Gujarat," said Uttarakhand media advisory committee Chairman Devendra Bhasin quoting Chief Minister B C Khanduri.
Tata Motors also plans to have CNG, electric and exports variants manufactured at the mother plant in Sanand, Tata said.
Talking about the size of investment, company's Managing Director Ravi Kant said it would be about Rs 2,000 crore.
"... There will be some more things that we are talking about. We expect more number of vendors to come here. The size of the plant would be much bigger than what we had planned for West Bengal," he added.
As per the agreement, Tatas would also undertake a number of initiatives for human resource development in the state, including setting up of ITIs.
When asked about the loss incurred due to pulling out of West Bengal, Tata said, "We would be retrieving most of our costs out of Singur and I don't believe that there will be a need to have any appreciable loss reflected in our financials in the current year."
"The cost of moving out would be the cost of dismantling and the cost of moving to a new location," he said.
According to the agreement, the homegrown auto major would purchase land from the Gujarat government at current market prices.
Last week, Tata Motors withdrew its Rs one-lakh Nano car project from West Bengal, with a disappointed Ratan Tata blaming the Trinamool Congress leader Mamata Banerjee for the "unfortunate and painful" decision.
Hitting out at Mamata, Tata had said, "agitation by the opposition party has been the sole reason for this decision... How can we go into production when people are saying that we will continue agitation... I think Banerjee pulled the trigger".
Retaliating, Banerjee had said it was a "joint game plan" by the Tatas and the state government during Durga Puja festival.
Tatas had evacuated entire work force from Singur, complaining intimidation and violence from the agitators who had cordoned of the entire area since August to prevent progress on the project.
In the auto space, Gujarat so far has a General Motors plant in Halol, Bombardier's bus body making facility and Asia Motor Works' truck manufacturing unit at Bhuj.