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Still can't resume work at India's Nano plant: TATA

MUMBAI - Conditions are still not favourable to resume work at a plant in eastern India which will make the Nano, billed as the world's cheapest car, Tata Motors TAMO.BO said in a statement on Saturday.

Tata Motors which is building the plant to launch the 100,000-rupees ($2272) car, has faced violent protests and political opposition over the acquisition of farmland in Singur, an hour's drive from the city of Kolkata, the capital of West Bengal.

'There has been no improvement in the ground situation so far, hence the conditions are still not conducive for resuming work today,' a Tata spokesman said in an e-mailed statement.

'We continue to assess the situation closely.'

Last week, Tata Motors Chairman Ratan Tata said he was prepared to move the plant from Singur if violence continued, despite having invested $350 million in the project.

Trouble began after the government took over 1,000 acres of farmland for the factory. The government offered compensation but some farmers rejected it, demanding that at least 400 acres of land be given back to them.

The protests reflect a larger standoff between industry in India and farmers unwilling to part with land in a country where two-thirds of the billion-plus population depend on agriculture.

Mamata Banerjee, leader of the opposition Trinamool Congress, which is spearheading the protests, has threatened to organise state-wide demonstrations.

On Friday, thousands of Trinamool supporters blocked roads and shouted slogans against the government, bringing traffic to a halt in the heart of Kolkata.

West Bengal Chief Minister Buddhadeb Bhattacharjee said he was ready for talks with farmers but could not return 400 acres of land, earmarked for ancillary units, because it would make the project unviable.

Tata Motors has since been flooded with offers from other states for the Nano plant.

Shares in Tata Motors have fallen about 40 percent from the start of the year, underperforming the broader stock market which has declined nearly 30 percent in 2008.