Singur vendors may not get cash payout from Tatas

Though Tata Motors is yet to disclose how it will compensate its harried vendors in Singur, a section of them believe that the auto major is unlikely to provide them direct cash support to help them relocate to the upcoming Nano plant at Sanand in Gujarat.

A senior official of Tata Steel Processing and Distribution (formerly Tata Ryerson), one of the vendors for the Nano, told PTI, "Tata Motors is not likely to give cash support as compensation to the vendors."

The official said Tata Motors and the 56-odd vendors are still having discussions on the nature of compensation and that nothing has been finalised as of now. It is likely that Tata Motors would give options like loans or higher prices for components as compensatory packages to the vendors rather than cash, the official said.

A Tata Motors spokesman, when contacted, said it is logical that the vendors will need support from the company. It is also important to see that the cash-flow of the vendors is not disturbed, the Tata Motors spokesman added.

Due to political opposition, Tata Motors had abandoned the Singur project in October 2008 and subsequently relocated it to Sanand in Gujarat to roll out the world's cheapest car.

The company spokesman further said trial production has already begun at Sanand since January and that commercial production is set to begin next month, which has an initial capacity to rol out 2.5 lakh Nanos per annum.

Tatas had invested around Rs 1,500 crore in Singur for building the infrastructure.