by A. J. PHILIP
It was a scholarship from J.R.D. Tata that enabled a Dalit from Kerala, the late K.R. Narayanan, to scale heights in diplomacy and public life to become the 10th President of India. It is said that familiarity breeds contempt. When I knew how Tata maintained an office at Patna to keep politicians in good humour, I realized that this, too, was just another Indian company ready to break bread with devil.
Years later, I was not taken by surprise when the Tatas were found to pay money to the insurgents in the Northeast like any other business house. Some may say that the Radia tapes, which revealed the behind-the-scene manoeuvrings done by Tata during the telecom spectrum allocation marks the lowest point in the conglomerate’s history. I think that distinction should go to the company’s Nano project at Singur in West Bengal. Let me recap the ugly episode in India’s industrial relations.
The Anglo-Dutch steel major Corus was to become the jewel in the crown of the House of Tatas. Months of negotiations preceded several rounds of bidding between Tata and Brazil’s CSN, which bowed out of the race on January 30, 2007. The total price Tata paid came to US $12.04 billion ranking it as the world’s largest such acquisition.
Overnight, Tata Steel, which was the world’s 56th largest steel maker, became the fifth largest. The then Tata chairman, Ratan Tata, told a television interviewer that he was prepared to pay more for the European company, though he did not reveal the extent to which he could have gone.
Around the time Tata was buying Corus, it was engaged in a bitter dispute with the farmers of Singur, near Kolkata in West Bengal. The then CPM-led Left Front government had acquired 997 acres of prime agricultural land at a throw-away price and handed it over to Tata to set up a factory to manufacture the world’s cheapest car, the Nano.
Tata had earlier entered into a deal with the West Bengal Industrial Development Corporation (WBIDC), whereby the land would remain with Tata for 90 years, for which it would have to pay an annual rent of Rs 1 crore. Farmers, supported by the Trinamool Congress, demanded the return of 300 acres. Well-meaning suggestions that Tata negotiate with the farmers and pay them some more money than what the state government had paid — Rs 120 crore — did not evoke any response.
There were also hints that Tata could have surrendered 300 acres out of the 997 acres in its possession. It was from my friend, well-known short story writer and senior IAS officer N.S. Madhavan’s column in the Malayala Manorama that I had learnt about how the Birla-owned Hindustan Motors had in 1942 acquired 1200 acres of land at Batala in Calcutta, a major portion of which remained unutilised.
When the Ambassador, about which it is said, more in seriousness than in jest, that all its parts, except the horn, emit noise, lost its pre-eminence and Hindustan Motors began incurring heavy losses, it found a goldmine in the extra land in its possession. The land’s market value was much more than that of the car company. I may have heard the story from Madhavan but the people of West Bengal would have known about the Birlas’ foresight in acquiring a larger plot than was necessary to set up the car factory. They felt that Tata could just as well have built its factory and ancillary units on 700 acres.
Incidentally, Tata now owns two British car companies, Jaguar and Land Rover. Their factories are located in what is called the Whitley plant, situated in the West Midlands of England. It was originally used to manufacture war planes. The total area was only 187 acres. When Ford owned these brands, it acquired some more land surrounding the plant, causing discomfort to the local people. Recently I read an article in IHT that the total area under Tata’s possession was only 300 acres.
Is it not curious that Tata wanted 1000 acres to manufacture the smallest car, while it needs only 300 acres to manufacture two of the costliest cars in the world?
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