Tata Suspends Work on World's Cheapest Car

Company is concerned about safety of workers

Tata Group on Sept. 2 officially suspended construction of a plant to build the world's cheapest car in the face of unrelenting protests and said it was looking at new sites.

The group, which had hoped to market the four-door Nano for 100,000 rupees (US$2,264) by October, said it was considering shifting the plant from its site in the Singur district of Marxist-ruled West Bengal state.

"Tata Motors has been constrained to suspend the construction and commissioning work at the Nano plant in Singur in view of continued confrontation and agitation at the site," the company said. "In view of the current situation, the company is evaluating alternate options for manufacturing the Nano car at other company facilities."

The announcement came as thousands of protesters continued to blockade the nearly completed Nano car plant in Singur, a suburb of state capital Kolkata, saying poor farmers had been evicted to make way for the factory.

The protesters, led by local politicians, say they will lift the siege only if 400 acres of land is returned to the owners.

Protests in the area have been going on for two years but recently escalated. On August 29, the company said it was halting work at the project because it could not ensure its employees' safety.

"The decision has been taken in order to ensure the safety of its employees and contract labor who have continued to be violently obstructed from reporting to work," the Tata statement said.

Tata Motors has already poured $350 million into the project.

Indian businesses joined ranks against the protests, saying the move to suspend operations would dent investors' confidence. "Corporates would now want to know if they can go where they are wanted," Dilip Chenoy, chief of the Society of Indian Automobile Manufacturers, said in New Delhi. The country's largest trade lobby also backed Tata.

Copyright Agence France-Presse, 2008

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