Tata Motors to compensate vendors for relocation losses

Nano vendors who were forced to relocate their units to Sanand in Gujarat from Singur in the wake of the political agitation there, will be offered a compensation package, according to Tata Motors.

Simultaneously, the auto major has decided to retain 997 acres of land at Singur and renew the lease, expiring 31 March, 2010.

The Sanand unit of Tata Motors is expected to commence production next month. The company has meanwhile reached an agreement whereby it will compensate vendors in a phased manner, for the losses they suffered due to relocation of the unit.

According to industry sources the package would amount to Rs200 croreat, making up least 75 - 80 per cent of the vendors' losses.

Meanwhile, vendors are reportedly holding out on their Singur land and also awaiting a move from Tata Motors to sort out the issue with the state government.

According to a Tata Motors spokesperson, the Singur land was still with the company and it would retain it and the payment towards the lease would be done when it was required.

Many of the 56 vendors at Singur, had completed a major part of the construction work and some others like Caparo Engineering, Bosch Chassis Systems, Gabriel, Lumax Industries, Rasandik Engineering Industries India, Sona Koyo Steering Systems, Rucha Engineers, Tata Ryerson had started construction at the site.