Tatas may drop another Bengal plan

Less than five months after Tata Motors relocated its Nano project from West Bengal to Gujarat over land issues, another Tata group company, Tata Metaliks, is reviewing its expansion project in the state on similar grounds.

The West Bengal Industrial Development Corporation (WBIDC), which has been acquiring land in Kharagpur for Tata Metaliks’ diversification project, has already initiated dialogue with the company. But land prices remain a contentious issue.

Subrata Gupta, managing director, WBIDC, said that land prices in the last three years have doubled. Prices, which were around Rs 3.5-4 lakh an acre three years ago when WBIDC started acquiring land, have now doubled to Rs 8 lakh.

Gupta said the company has been asked to pay a higher price. “Tata Metaliks has sought 15 days to respond,” he said, adding that WBIDC officials had recently met a Tata Metaliks team after the company expressed its intent of withdrawing the project from the state.

Harsh K Jha, managing director, Tata Metaliks, confirmed that the company has sought time, but did not elaborate on the details. However, the company’s board has decided not to wait for the land indefinitely. The company has already waited for four long years to get the required land, Jha said.

West Bengal Chief Minister Buddhadeb Bhattacharjee had promised Tata Metaliks on February 26, 2005, that the state would allocate land on a “priority basis”. The company had applied for land on March 15, 2005.

Tata Metaliks, a pig iron producer, had initially sought 500 acres for its diversification into billets, but the land requirement was later scaled down to around 300 acres as contiguous land was not available.

Gupta said more than 150 acres has been acquired by WBIDC and the company has made an initial payment of Rs 9 crore for the land.

He also added that WBIDC would go ahead with land acquisition irrespective of the Tata Metaliks’ decision. “Even if they do not set up the project, we will develop an industrial park,” said Gupta.

WBIDC has decided not to acquire land for individual companies. Instead, it will set up industrial parks where companies will become anchor investors in a bid to maximise employment.

Tata Metaliks has also held discussions with the Karnataka government for an iron ore mining lease and for setting up of a plant. A high-level clearance committee of the state has already given approval for a steel plant in Haveri district.

At present, Tata Metaliks has pig iron facilities at Kharagpur in West Bengal and Redi in Maharashtra. The company has an annual capacity of 650,000 tonnes. Even though the diversification plan at Kharagpur is under the cloud, the company has lined up expansion of the existing plant. A sinter plant is being set up which will be commissioned in 2010.