credits: Business & Econimics -> original report <-
following are not my words, but i felt like sharing it with my readers...
“If I believe that we were doing something wrong, then I will be the first one to pull out… You put a gun to my head and pull the trigger or take the gun away, I won’t move my head.”That was Ratan Tata in 2006, daring the ‘motivated’ opponents of the Nano project to do their worst, and worse. Now you can blame Mamata Banerjee of many things; but even her most trenchant critic won’t accuse her of riding a horse towards Bombay House (the headquarters of the Tata Group) and pointing a Smith & Wesson at Ratan Tata. Then why is the Tata Group behaving so petulantly (unfortunately, blindly supported by most of the media) and threatening to pull out? If Tata Motors has not done “something wrong” ('Wrong' could be legal, ethical or moral), why has the company filed a petition in the Calcutta High Court requesting for a restraint on the State Information Commission from releasing details about the Nano car project? That’s because the more you learn about the deal between Tata Motors and the WB government, the more you wonder if J.R.D Tata would have ever pushed for such a deal.Lest you bracket us as ‘professional protestors’, let me tell you that this magazine declared the Nano as the genuine Bharat Ratna. We still think the Nano is a paradigm changing at ‘low cost mobility’. Our problem is with how the ‘low cost’ is being achieved. The devil, as always, lies in the details.
The cash starved WB government has given a Rs.200 crore loan to Tata Motors at – yes – at 1% interest. The first instalment will be repaid in the 21st year of the project. Does a group that paid Rs 35,000 crore or so to acquire the British steel company Corus need a Rs.200 crore loan at 1% interest? Forget that. By the time the first instalment is due, Tata Motors would have earned close to Rs.2,000 crore in interest income by investing that money in a fixed deposit. Tata Motors will pay a lease of Rs.1 crore per year on 647 odd acres of land for the first 30 years of the 90 year old lease. That is less than Rs.1,300 per acre in commercial land, less than 50 kilometres from Kolkata. Even poor middle class souls like you and me pay a lease of Rs.1,80,000 per year for a 1,000 square feet house far from the heart of the city.The Nano project will get power at Rs.3 per KwH; the current rate in Bengal is Rs.4.15. If rates go up by more than 25 paise per Kwh in five years, the government will refund Tata Motors. You and me are already paying close to Rs.6 per unit for electricity. For every Nano sold in Bengal, the state will de facto refund the VAT and sales tax collected on each sale of Nano.There is far, far more and we don’t even know the details of what Tata Motors has prevented us from knowing by going to the courts. I can’t but help wonder about two things. How much of the ‘low cost’ is because of media hyped innovations and how much because of the deal? Then again, who is putting a gun to whose head?