Cabinet clears additional land for Tata Motors

Firm to invest Rs 2,734 cr in Dharwad.

The Karnataka Cabinet on Monday cleared the Tata Motors' proposal for additional land in Dharwad for setting up its manufacturing facility to produce luxury and mini-buses.

The Cabinet approved the Rs 2,734 crore project for which the company needs 300 acres of additional land. The company has 600 acres in Dharwad where it currently manufactures construction equipment.

The proposed unit, which is likely to commence production in 2008-09, will provide jobs to over 30,000 locals. The new unit will roll out 2,26,150 vehicles every year.

Briefing reporters after the meeting, Karnataka home and law minister MP Prakash said the government had agreed to allot 300 acres of land.

Tata Motors has a unit, Telcon, that manufactures construction equipment, set up a decade ago in the Belur industrial growth centre, about 10 km from Dharwad on the National Highway No 4.It has acquired 680 acres of land. It may be recalled that Tata Motors had announced a joint venture with Marcopolo, Brazil-based global leader in body building and coaches, in May 2006.

The Cabinet has also approved concessions like conversion of the VAT repayable over an 18-year period at 0.1 per cent interest per annum and the supply of water at concessional rates in view of the location of the project in the backward region.

The government has also given permission for the grant of soft loan to the company, said Prakash. The company has also agreed to provide jobs for people from rural areas as per the government's Suvarna Kayaka Udyoga Shikshana scheme.

A committee comprising chief secretary, finance, and industries secretaries has been formed to finalise the rules for granting conditional concessions as sought by the company. Tata Motors had sought some concessions on the lines of those granted to Toyota Motors, Prakash said.