KOLKATA: In a stinging blow to investment prospects in West Bengal, Tatas today pulled the Rs 1-lakh Nano car project out of the state with Ratan Tata squarely blaming Trinamool Congress chief Mamata Banerjee-led farmers' agitation for the "painful decision".

"I am extremely pained. It has been an extremely painful decision. It has been a great disappointment for the people working on the ground, more than me," Tata announced the much-anticipated decision after meeting the state Chief Minister Buddhadeb Bhattacharjee.

Addressing a crowded press conference, Tata announced the pull-out of the two-year long troubled project and said the company was looking at alternate sites in some states for rolling out Nano car by the promised deadline of December this year.

Gujarat, Karnataka, Maharashtra and Uttarakhand have invited Tatas to set up the project in their states.

Tata felt the Buddhadeb government was not to be blamed for the unfortunate decision and promised to continue investing in the state in new projects.

Tata added that West Bengal is a terrific state in terms of people. "In that context, whether we bought the land or whatever we did, we did it in good faith. We wanted to make a difference. I had a desire that this part of the country, which has been ignored, should be part of development, and I wanted to be part of it. The state still has the potential. I would have to say he (Buddadeb Bhattacharya) was exceedingly distressed... he persuaded us that we should not move but we told them that the safety of our employees could not be passed on to the government. You can't run a plant when people are being intimidated. This is only during construction... what happens when the plant starts functioning? The CM thought we made the wrong decision but we parted as friends."

Pinning the blame on Banerjee, Tata said "agitation by the opposition party has been the sole reason for this decision... How can we go into production when people are saying we will continue agitation."

"We have not been a party to any land dispute. It is between West Bengal government and Trinamool Congress," he added.

Ratan Tata said the project got caught in the political crossfire... "I am not pulling out, it is because of Mamata Banerjee. We waited for two years... it was prime time. We can't wait anymore. Opportunity for young people is large. Today, this project has gone but there are hundereds of such projects that would come. Bengal needs to have development. It needs to have infrastructure, it needs investments but what will be the future of WB unless there is development, and that one needs to ponder...."

Asked about the fate of vendors of the project, he said, "I think vendors will also move with us. They are an integral part of the project. We will try to protect the interest of the vendors."

He added that its a decision that shatters many dreams... "I share the disappointment with people who have worked on this project... but also have a feeling that it is good that we are moving. We all have lessons to learn..."

The Rs 1,500-crore project was announced in May 2006 for which the work started in January 2007. It ran into rough weather with the Trinamool Congress strongly opposing the land acquisition by the state for the project.

"To the best of my knowledge, the land was acquired legally... it was done transparently and the compensation was based fairly," he said.

Efforts by the West Bengal Chief Minister and Governor Gopalkrishna Gandhi to salvage the project turned futile with Banerjee unwilling to relent on her demand of returning 300 acres of acquired land to farmers.

Tata said the move has been prompted after taking into account issues such as well-being of its employees at the project and safety of contractors as well as that of its vendors.

On the future association of Tatas with the state, he said the group already has considerable presence here and it has not lost enthusiasm in future investment.

"I hope West Bengal prosper in the future. In the future we will be here again. We don't believe that we have lost our enthusiasm in investing in West Bengal and assure that we will invest in the state for new projects," he said.

Tata said the pull-out decision would have no bearing on group's future investments in the state.

The Tatas' pull-out from Singur for its prestigious Nano car project could not have come at a "worse time", as India was preparing to face the fall-out of the global financial crisis on the emerging economies, Commerce Secretary G K Pillai said today.

"It is an unfortunate development. It could not have come at a worse time," Pillai said, adding the country was faced with a challenge of coping with the financial turmoil in the world markets.

The Commerce Secretary said as a direct consequence, investment in West Bengal would drop by 30%.

However, he said, the Tatas' pull-out of the state should be seen as an isolated case.

Pillai expressed the hope that the Standing Committee of Parliament would soon finalise its recommendations on the new Land Acquisition Bill and the Rehabilitation and Resettlement Bill.

Chandrajit Banerjee, Director General of CII, said: "It is indeed regretful that the Tatas have had to pull out of Singur. CII feels that the Tatas have been very patient and this decision has come as a compulsion after the political dialogues failed to yield a consensus on the issue. The political consensus should have happened and such an iconic project should have come up in the state of West Bengal."

CII feels that such occurances need to be avoided in the future, as this only affects the image of the India.

Assocham Secretary General D S Rawat said: "It is extremely sad that the Tatas have pulled out of Singur. It is the most unfortunate happening of industrial activities in twenty first century.

"Though, the West Bengal Government should not be blamed for Tata’s exiting West Bengal. The blame lies with a  section of  a polity and people of West Bengal will have to pay a very serious price for it," he added.

Ficci Secretary General Amit Mitra said: "Huge investment was planned for Nano project. All that money will be a waste now... This will send a clear signal to investors abroad that West Bengal is not a preferred site."

According to sources, Tatas have approached the Maharashtra government, and have sought an appointment with Chief Minister Vilasrao Deshmukh.

Following is the press release issued by Tata Motors:

Tata Motors to relocate Nano Project from Singur

Kolkata/Mumbai, October 3, 2008…. In a meeting held with the Hon'ble Chief Minister of West Bengal, Mr. Buddhadeb Bhattacharjee and Minister in Charge, Department of Commerce & Industries, Mr. Nirupam Sen, Mr. Ratan N. Tata, Chairman, Tata Sons & Tata Motors and Mr. Ravi Kant, Managing Director, Tata Motors, expressed their extreme anguish at the heightened level of agitation and hostility by the opposition parties led by Ms. Mamata Banerjee, resulting in a concern for the physical security of their staff, contractors and vendors. Threats, intimidation and instances of assault and general obstruction in one form or the other have been the order of the day. It was therefore with great regret that Mr. Tata and Mr. Ravi Kant conveyed to the Chief Minister that in the interest of the project's success and viability and in light of the opposition's continued agitation, there was no option but to move the project out of the State of West Bengal. Mr. Tata and Mr. Ravi Kant expressed their deep appreciation of the State Government's efforts to facilitate and support the NANO Project.

Tata Motors had constructed the plant over the past two years, despite continued agitation and hostility as also continuous affect on the reputation and integrity of the Tata Group. Tata Motors has now almost reached a start up position of the plant. However, the heighted hostility and agitation had caused the commissioning and start up phase to be suspended. The contract labour had also been intimated and assaulted, thus making it impossible to continue. Tata Motors had suspended work for an entire month on the plant. Unfortunately, there was no de-escalation in the level of hostility and agitation. The Trinamool Congress and those supporting them, continue to demand a part of the land to be returned to the farmers by the Government, which would render the project unviable.

Tata Motors believes it has displayed immense patience and had sincerely hoped that the situation would improve. Throughout the construction period, despite the constant obstruction and acts of aggression, staff and the contractors continued to work in the hope that the situation would normalize and the company's bonafides would be understood.

Given the unfortunate conditions, Tata Motors has been obliged to take the hard decision of moving the project out of the State. In doing so, the company recognizes all the cooperation it has received from the State Government and states categorically that the NANO project having to be moved from West Bengal is entirely due to the continued agitative actions by the opposition party led by Ms. Mamata Banerjee with total disregard for the rule of law.

Mr. Tata reiterated that the location of the NANO project in West Bengal was an expression of faith in the investor friendly atmosphere created by the State Government. The project was to be a show case plant which would have considerably enhanced the visibility of the State, created jobs for the younger citizens of the State and through the company's community programs, would have enhanced the quality of life of the urban and rural population.

Both Mr. Tata and Mr. Ravi Kant reiterated their faith in the State Government's policies and expressed their regret that these unfortunate circumstances had prevented Tata Motors' participation in the development of West Bengal. They hoped that West Bengal would grow and share in the prosperity and growth of India.