VZCZCXRO6161
RR RUEHCI
DE RUEHCI #0253 2491140
ZNR UUUUU ZZH
R 051140Z SEP 08
FM AMCONSUL KOLKATA
INFO RUEAIIA/CIA WASHDC
RUEIDN/DNI WASHINGTON DC
RUEHCI/AMCONSUL KOLKATA 2595

UNCLAS KOLKATA 000253 
 
SENSITIVE 
SIPDIS 
 
DEPT PASS TO USTR 
 
E.O. 12958: N/A 
TAGS: ECON EINV EIND ELTN IN
SUBJECT: TATA THREAT INTENSIFIES SINGUR TALKS 
 
REF: A. 08 KOLKATA 231 
     ¶B. 07 KOLKATA 380 
     ¶C. O6 CALCUTTA 453 
 
¶1. (U) SUMMARY: On September 3, Tata Motors announced that it 
has begun analyzing options to pull its Nano car project out of 
West Bengal. The opposition Trinamul Congress (TMC) appears to 
have been shaken by the threat, which came after several days of 
negative publicity and a growing public perception that closure 
of the Tata plant would harm not just the Communist Party of 
India (Marxist) (CPM), which runs the Government of West Bengal 
(GOWB), but also the common man and the Singur community.  West 
Bengal Governor Gopalkrishna Gandhi is mediating talks between 
the GOWB and TMC, with talks starting on September 5. There is 
speculation in the business community that Tata's announcement 
was issued in order to put pressure on TMC to agree to a 
compromise. END SUMMARY. 
 
¶2. (SBU) On September 3, Ratan Tata announced suspension of the 
construction and commissioning work at Tata's Nano plant in 
Singur. On August 24, TMC started an indefinite siege of the 
plant, demanding the return of 400 acres of land the GOWB 
acquired from farmers to provide to Tata for the plant (see 
reftels). Tata explained that protesters, in their second week 
of a siege of the plant, had intimidated workers and he was 
suspending operations because he could not ensure the safety of 
its workers. Tata added that the company is evaluating options 
for manufacturing the Nano at other company facilities and is 
preparing a detailed plan to relocate the plant and machinery to 
an alternate site. A senior Tata Steel employee, who claims 
personal knowledge of Tata's plans, told ConGen that Tata is 
already producing the Nano at an alternative site and would not 
miss its October launch deadline even if the Singur plant does 
not reopen. 
 
¶3. (U) Tata's announcement came at the end of several days of 
negative media coverage of the TMC's siege. While no violence 
has been reported since TMC's blockade started on August 24, the 
media has reported that workers were harassed and intimidated by 
members of the blockade. The media widely reported the story of 
a 65-year-old farmer from Singur, who committed suicide after 
hearing Tata might pull-out from Singur. A rare alliance of 
small business owners, suppliers of raw materials and 
information technology workers also formed to confront TMC 
loyalists, using Internet blogs and media stunts to draw 
attention. 
 
¶4. (SBU) TMC's weakened position appears to have raised hopes 
for a settlement. West Bengal Governor Gopalkrishna Gandhi 
agreed to mediate talks between CPM (GOWB) and TMC, with talks 
starting on September 5. Former Member of Parliament and TMC 
ally Jayanta Bhattacharya (protect) told EconFSN on September 4 
that Mamata Banerjee has softened her position and is ready to 
find a solution. However, West Bengal Industrial Development 
Corporation Advisor Sudip Sinha (protect) told EconFSN that some 
of Mamata's ultra-Left allies within the Krishijami Jiban 
Jeebika Raksha Committee (farmland, life and livelihood 
protection committee) are looking to block a negotiated 
settlement. Sinha believes that these ultra-Left groups are 
ideologically opposed to industrialization at the cost of 
agriculture and are immune to public opinion as most of them 
have no ambition to hold public office. 
 
¶5. (SBU) COMMENT: The Singur political theatre continues, with 
each party - CPM, TMC and Tata - jockeying for an advantage. The 
CPM and TMC do not appear to have a strategy for resolving the 
conflict, but are responding tactically to each other's moves. 
Both CPM and TMC are trying to preserve a public image that they 
support development in West Bengal, but both are constrained by 
internal conflicts and political realities. It is unclear 
whether Ratan Tata has a long-term strategy, but by suspending 
operations at the Singur plant right before the talks, he has 
inserted himself into the political fray. END COMMENT. 
 
PAYNE