Business - Q&A Ratan Tata

Arindham Sen Gupta & Bharat Desai

TOI: It must be a relief for you that you have finally found a place for your plant. Tata: It is not a sense of relief but satisfaction — that it is all settled, that we are not orphans looking for a home. I think it's a continuing process. We left one place and have come to another. But we will look forward to the new location with a great deal of enthusiasm because, hopefully, we will have an environment where we can do what we set out to do, which is, not just manufacture a car but be a good corporate citizen in the process. TOI: Far from your project being an orphan without a home, states were falling over each other to offer you great villas. What was special about Gujarat's offer? What clinched it for the state? Tata: I think what made a difference was the fact that Gujarat has been able to define the land and give us the possession. Land is the main thing that takes much time. Gujarat has done it in an unbelievably fast manner and given all approvals and permissions with great speed. You know if it were possible to transport or move the plant in a day we could have been in business the next day at this location in Gujarat. But we are not dealing with something that can be moved in a day. TOI: How long it has taken to seal the deal? Tata: I was not directly involved in the process. We will have to ask Ravi Kant (Tata Motors MD). Ravi Kant: It took a few days. TOI: What would a few days mean? Ravi Kant: I would say about 10 days. TOI: When did you finally decide that it would be Gujarat? Tata: We finally decided last night. Let me say the entire process started when problems started growing in Singur. We had offer letters from many CMs who knew that we had problems in West Bengal. As soon as we made the announcement, I guess it was on August 22 when I made the announcement that we would move if the situation did not improve, we had letters from four or five states and we responded to each of the letters. I think most of us were travelling at that time. When we came back, we started picking up the letters and actually talking to the states about land — land being the main issue. And so I think probably some time in September, we started looking at land, studying what these states had to offer etc. Indeed, we had to look for an insurance policy. It was not an emergency from our side until it came very close to saying we were going to move from Singur. And then it became very urgent to settle something else fast. Ravi has been running around from one state to another. It was important that one team travelled from one state to another so that they can compare. The chief minister of Gujarat moved very fast. Gujarat enjoys the reputation of being an investor-friendly state. So we decided this was really the place where we have everything in order. With all other states, despite all their good intentions, there were many things yet to be settled. So we decided to move forward with Gujarat and everything was put in proper place. TOI: Will the Sanand plant be the mother plant? Tata: Yes, this is the mother plant. TOI: At the last Vibrant Gujarat summit in 2007, you said "You are stupid if you are not in Gujarat". What took you so long to come here? Tata: We were in Gujarat even at that time as we have Tata Chemicals here. But we didn't talk of this project at that time, although I think Mr Modi told me jokingly, "You are having trouble there. You come here and I will give you everything." Now, we are here, as luck would have it. TOI: Will you be able to deliver the Nano on time despite the Singur setback? Will the initial production of the car come from your plants at Pune and Pantnagar? Tata: Yes. We already have a makeshift operation in place. It is important to tell the world that in spite of all that has happened we will bring out the Nano within the same window (the last quarter of this year). TOI: What made you go to West Bengal in the first place? Buddhadeb Bhattacharjee? Tata: Did you say Mamata? (Laughs) Yes, it was Mr Buddhadeb Bhattacharjee. I have known him literally from the day he took over as chief minister from Jyoti Basu. We were at that time with the Haldia Petrochemicals Complex and because we had a problem, not with the state government, but with Purnendu Sen, we withdrew. At that time, I met Mr Bhattacharjee and was extremely impressed with his sincerity. And that sincerity has been there throughout. He told me that I should not withdraw and I told him we must but we would come back with a bigger investment to West Bengal because I believe he was doing the right thing. Then one day when we were inaugurating the cancer hospital in Kolkata he said why don't you bring your automotive project to West Bengal. I told him the incentives you have will not match with what other states are offering. And both he and Nirupam Sen (industry minister) set themselves the task of meeting what was needed. To be honest, he first offered us land at Kharagpur. But then that was far from Kolkata. I told him that if we wanted the project to be showcased to the world as a world-class enterprise, we should have it at a location where we could bring in our best people, give them the best schools, best colleges etc. In deference to my wish, he showed several plots out of which we found Singur most suitable. Unfortunately, what followed was something unexpected while we had something wonderful going. It would have brought investments to a part of a country which has been neglected. It was a forerunner of future investments in that part of the country. TOI: What is the loss to the Nano project because of time overrun? Tata: First of all, all the equipment will come good. So there is no loss on equipment. One may ask what have you left behind and how much of it is totally wasted. You can retrieve a fair amount of the fixed assets that you may have and relocate it. It is our view that in terms of the current year we will not have to reflect any appreciable loss in our books. We have also not discussed with the state government what we would do with the land because its still leased to us. The state government wants us to look at other projects, which we have agreed to do. We just said that we will do it if the environment is conducive, otherwise we will not. So it's not that we have walked out of West Bengal and left a crater or a barren piece of land behind. TOI: Gujarat has not been known to offer special incentives to industry. What was your experience? Tata: I think as far as we are concerned whatever we needed and were getting in West Bengal, it has been matched here. We are very pleased with the package and the speed with which, more than anything else, the package has been finalized. TOI: You are embarking on this project at a time when there is a global economic downturn. There is a liquidity crunch in the country too. What is your outlook regarding the global slowdown? How long do you think it will last? Tata: The global slowdown is affecting ... . It is percolating like a coffee machine down to industries that were not directly involved in the crisis. We ourselves here are facing a downtrend because of a tightness of credit. If it opens up, as there are some signs of doing, I think we will see some recovery. But the US and Europe are still reeling under writeoffs and writedowns and defaults, which is creating a kind of domino effect in other industries. And nobody seems to know where or when it will bottom out. TOI: Would you have an assessment of how long the slowdown might continue in India? Tata: No, I am not any more qualified than some others, although I think nobody knows how long it would be to bottom out. TOI: From Bengal to Gujarat, it's the same country and two very different stories. What lessons do you draw as a senior business leader? Tata: I don't know how much problem that we faced was really that of the famers. I would just say that political opposition and political aspiration should always be subordinated to the better welfare of the country or the state. I don't know who would be the losers. You have talked about ourselves being one of the losers in the sense of losses owing to time overruns. But I wonder what we have left behind. I am sure West Bengal can attract other investments and will attract other investments and we will be as supportive as we can in attracting new investments. But what about the people who had aspirations for jobs? The people who have made this issue of land-for-land — will they prosper? Has anything been done to increase their yeilds, their income levels? Many of them are below subsistence levels — they say so themselves. On the one hand, they talk of drinking their money away or not having money, and on the other hand, they talk of having their land back. I mean are we doing anything to improve their lot? These are the questions that come to my mind. So, political opposition should hold the country first and not themselves. That's all I am saying. TOI: Mr Tata, thank you.