Singur: Cyrus Mistry exit raises question over land compensation

The primary concern of the state government now, according to sources, is whether or not the Tata Group will ask for compensation for their losses — amounting to almost Rs 1,400 crore.

Kolkata | Updated: October 28, 2016 4:04 pm
Cyrus Mistry, TATA and Sons, TATA news, TATA chairman, Singur, Singur TATA land, Singur TATA plan, latest news, India news, Latest news, Business news, With Cyrus Mistry out and the future of the Tata Group uncertain, officials said the state government has decided to adopt a ‘wait and watch’ attitude.

As news of Cyrus Mistry’s unceremonious exit from the Tata Group made headlines, a sense of uncertainty prevailed in the corridors of power in West Bengal. There was only one pressing question on everyone’s mind: What would be the fate of Singur?

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The primary concern of the state government now, according to sources, is whether or not the Tata Group will ask for compensation for their losses — amounting to almost Rs 1,400 crore. The nearly 1,000 acre plot of land, which was primary reason for the fall of the erstwhile Left Front regime, was the centrepiece of a defining moment in Mamata’s term as chief minister when the Supreme Court directed that it be returned to farmers instead of being used for a car factory. While she had a “good relationship” with Mistry, according to officials, her equation with his predecessor and now interim chief Ratan Tata was filled with acrimony and had shown no signs of abating until this year.

While Ratan Tata had famously differentiated between the “two M’s” as good and bad, in an indirect reference to Prime Minister Narendra Modi and Mamata, the state government began taking steps to bury the hatchet in the run-up to the 2016 Assembly elections. With Mistry’s at the helm of affairs, many in the government had believed that the Singur matter could still take a positive turn. But now, they are not so certain. “The government is not in a position to pay compensation. Instead, we would want to give them land to invest in and a slew of business friendly-measures,” said an official.

Mamata’s reaction to the news was predictable — she sent her confidante and Minister for State Parliamentary Affairs Partha Chatterjee to Singur to ensure that the work at Singur progresses without any delay. “The change in the company’s brass is sudden. But we’re following the orders of the apex court,” said Chatterjee.

The compensation issue has always weighed heavily on the minds of government officials. In fact, sources said that prior to demolishing the Tata Group’s shed at Singur, the matter was discussed between the two parties. The compensation issue stems from a clause in the land lease agreement of 2007 between the West Bengal Industrial Development Corporation and Tata Motors. The corporation had indemnified the company against losses that could arise from an imperfect title of the land. Tata Motors has already written off Rs 309 crore for Singur and in a petition before the Calcutta High Court in 2011, its losses were said to be around Rs 1,400 crore.

To end the eight-year long bitterness, the Mamata government had roped in an unofficial emissary to kick-start the dialogue process between the Tata Group and the chief minister. Prior to Mistry’s exit, the state government had cause to feel confident. Not only had the Supreme Court order — which quashed the erstwhile Left Front government’s land acquisition in Singur — validated the Trinamool Congress’ political position, it had also allowed Mamata to start looking forward. At the time, State Finance Minister Amit Mitra had told The Indian Express, “We have a land bank and a land map. We can also give 1,000 acres in Goaltore in West Midnapore. In Raghunathpur in Purulia, 2,600 acres of land is ready. We had kept the land for a railway corridor, but we have also kept 600 acres for industry separately. If Tata is serious, we can talk about it and the area can be prepared as an industrial hub.”

During a September business trip to Munich to attract investment, Mamata had reached out to the Tata Group — Tata Metaliks’ Managing Director Sanjiv Paul and Tata Steel India and South East Asia Managing Director T V Narendran had accompanied her — urging it to “forget one place” when “so many other places are available”.

Getting Tata to invest in Bengal, officials admitted, would have been the ultimate political coup that would silence all opposition.
But with Mistry out and the future of the Tata Group uncertain, officials said the government decided to adopt a “wait and watch” attitude.