Nano Costs Macro To West Bengal Govt: Tata Motors To Get Rs 766 Crore Compensation For Abandoned Singur Plant

Tata Motors announced on Monday (30 October) that it has secured an arbitral award of Rs 766 crore, plus interest, as compensation for its investments in the now-defunct Singur plant in West Bengal, Money Control reported.

The company had been constructing this facility with the intent to produce the ambitious Tata Nano. However, due to strong opposition from political leaders and local farmers, the company eventually abandoned its plans.

The company, in an exchange filing, stated, "Regarding the arbitration proceedings between Tata Motors Limited (TML) and West Bengal Industrial Development Corporation Limited (WBIDC), related to TML's claim for compensation from WBIDC under various categories, to account for the loss of capital investments in the automobile manufacturing facility at Singur, West Bengal, we inform you that the ongoing Arbitral proceedings, overseen by a three-member Arbitral Tribunal, have been conclusively settled through a unanimous Award issued on 30 October 2023, in favour of TML."

According to the filing, the tribunal has ruled that Tata Motors is entitled to recover a total of Rs 765.78 crore along with an 11 percent per annum interest from 1 September 2016, until the actual recovery from WBIDC. The filing does not specify whether the interest is calculated on a compound or simple basis.

Tata Motors has been granted the right to recover Rs 1 crore to cover the proceedings' costs. The company added, "With the issuance of the final arbitral award as mentioned above, the Arbitral proceedings have now concluded."

The Singur plant was originally allocated approximately 1,000 acres of farmland by the West Bengal government for Tata Motors' manufacturing plant and substantial investments had already been made at the site before Tata Motors subsequently relocated the manufacturing unit to Sanand in Gujarat after protests.