Saturday, October 4, 2008

Tata abandons cheapest car plant

Tata abandons cheapest car plant
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The Tata Nano was unveiled at India's biggest car show in Delhi in January

India's Tata group has abandoned plans to build the world's cheapest car in the eastern state of West Bengal.

Tata group chief Ratan Tata said: "We have little choice but to move out of Bengal. We cannot run a factory with police around all the time."

He was speaking after protests in a row over land acquired from local farmers.

The car, the Nano, is expected to cost about 100,000 rupees ($2,130). It was due to be launched in October and will be ready "this year", Mr Tata said.

We will have to make the best of the deadline that we have

Tata group chief Ratan Tata

The BBC's Subir Bhuamik in Calcutta says the company is initially expected to produce several thousand Nanos this year at other sites in India.

It had planned to make 250,000 cars a year at the Singur plant in West Bengal, rising to 350,000.

A number of other car firms also plan vehicles to compete with the Nano but have not yet begun production.

The dispute in West Bengal highlights a wider problem between India's growing industry - which needs land - and its farmers who are unwilling to give it up.

'Offers'

Work at Tata's Singur plant has been suspended since the end of August following protests led by the state's opposition Trinamul Congress party.




Exclusive look at the Tata Nano

Mr Tata said the Nano will be built "within this year but I can't tell you where".

"We are going to do everything possible to come close to the deadline we had established," he told journalists in Calcutta.

"We have got offers from several Indian states but we have not yet finalised where to produce the Nano... All these issues we will announce in the next few days when we have a clearer picture."

Mr Tata said his group would still consider West Bengal as an investment destination in future.

"I value the considerable intellectual resources this state has, but something will have to change here," he said.

He was speaking after meeting the West Bengal chief minister Buddhadev Bhattacharya and his colleagues.

"This is a black day for Bengal. We will have so much more difficulty getting investments now," said the state's industry minister, Nirupam Sen.

Compensation

The West Bengal government acquired 1,000 acres of land for the Nano project two years ago.

More than 10,000 farmers accepted compensation for their land, but just over 2,000 of them refused and demanded land be returned.

During the protests Tata's engineers and workers were attacked, prompting the group to stop work.

Our correspondent says the Bengal governor then intervened and tried to mediate a deal between the government and the opposition but that did not work.

The plant was seen as a key part of industrialisation efforts in what is one of India's least developed states.




House backs $700bn bail-out plan

House backs $700bn bail-out plan

The moment the rescue package was approved in the House of Representatives
The US House of Representatives has passed a $700bn (£394bn) government plan to rescue the US financial sector.

The 263-171 vote was the second in a week, following its shock rejection of an earlier version on Monday.

The package is aimed at buying up the bad debts of failing financial institutions on Wall Street.

US President George W Bush praised lawmakers for their "spirit of co-operation" before signing the bill into law later on Friday.

The House adopted the new version after the Senate added about $100bn in new tax breaks to win Republican votes.

Intervention

The Dow Jones Industrial Average had been buoyant ahead of the vote, surging up 250 points, but those gains were pared back amid profit taking and continued uncertainty, and it closed down 1.5%.

The passing of the bail-out plan is just the first stage and it will be several months before anyone can tell whether it is working

Greg Wood,
BBC business correspondent


How will the rescue work?
Stocks trim gains after vote
Q&A: US $700bn bail-out plan

In a televised response after the House vote, President Bush said: "In coming together we have acted boldly to prevent a crisis on Wall Street becoming a crisis in communities across the country."

Mr Bush acknowledged there were concerns about the government's role and the cost of the plan.

He said he believed in intervention only when it was necessary - but "in this situation, action is clearly necessary".

However, he warned the package would take time to have an effect on the economy.


Despite traders' celebrations, the Dow Jones finished down

His Treasury Secretary Henry Paulson vowed speedy action to get the rescue package up and operating.

And Federal Reserve Chairman Ben Bernanke applauded Congress, saying the bill was a critical step toward stabilising financial markets.

BBC North America business correspondent Greg Wood says the passing of the bail-out plan is just the first stage and it will be several months before anyone can tell whether it is working.

Avoiding 'catastrophe'

Legislators were hugely divided on the bill during the House debate.

Some who had voted "No" on Monday said they were switching because of the improvements to the bill but many of them still expressed serious reservations.



President Bush thanks Congress after the bail-out bill is approved
Others maintained their opposition, saying the bill was still a bail-out benefiting mainly Wall Street.

But House Speaker Nancy Pelosi was one of many to refer to those suffering on America's Main Street and said that urgent action was needed "to avoid economic catastrophe".

"The bright light of accountability will protect the taxpayer," she vowed.

Democrat majority whip James Clyburn said: "We came together in a very strong, bipartisan way to deliver this decisive victory for the American people."

Georgia Democrat John Lewis reflected the views of many when he said: "I have decided that the cost of doing nothing is greater than the cost of doing something."


NEW MEASURES IN BAIL-OUT BILL
Increased protection for saving deposits
Increased child tax credits
More aid for hurricane victims
Tax breaks for renewable energy
Higher starting limits to alternative minimum tax


Congress vote reveals divisions
In quotes: Bail-out vote reaction
Send us your comments

South Carolina Republican J Gresham Barrett added: "No matter what we do or what we pass, there are still tough times out there. People are mad - I'm mad. We have to act. We have to act now."

But Texas Republican Jeb Hensarling asked: "How can we have capitalism on the way up and socialism on the way down?"

Friday's vote showed 172 Democrats in favour and 63 against. A majority of Republicans still opposed the bill - 91 voted for it and 108 against.

The House rejected the earlier version by 228 votes to 205 on Monday.

The Senate passed an amended bill on Wednesday that raised the government's guarantee on savings from $100,000 to $250,000.

It also included tax breaks to help small businesses and to boost alternative energy, expanded the child tax credit and extended help to victims of recent hurricanes.

The US had experienced more evidence of the financial volatility ahead of the vote on Friday.

The Wells Fargo bank announced it would buy troubled rival Wachovia in a $15.1bn (£8.5bn) deal, while the US also reported its biggest monthly job loss in more than five years.




Russia call to halt Somali piracy

Russia call to halt Somali piracy

Pirates wants a $20m ransom for the Ukrainian ship and its cargo
Russia's foreign minister has called for joint international action to halt pirate attacks off the Horn of Africa.

"Russia aims to stop the outrageous actions of Somali pirates," Foreign Minister Sergei Lavrov said.

A Russian warship has already been despatched to Somali waters following last week's seizure of a Ukrainian ship laden with 33 Russian-made tanks.

The pirates are demanding a $20m (£11m) ransom for the vessel which is surrounded by US navy warships.

On Thursday, the European Union agreed to establish an anti-piracy security operation off the coast of Somalia to become operational in November.

Mr Lavrov said the Russians would participate in international efforts to halt the piracy and called for a UN resolution to tackle the problem.




Life in Somalia's pirate town
Somali piracy costs $30m
Tanks 'were for Sudan arms race'

He said Malaysia was also sending frigates to join the US warships surrounding the pirates.

According to Russia's Itar-Tass news agency, the Russian warship Neutrashimy is to commence patrols in the Gulf of Aden on 6 November.

The warship is reported to be carrying marines and commandoes on board.

The Ukrainian vessel - the Faina - was carrying T-72 tanks, rifles and heavy weapons when it was seized last week and is being held off the coast, near the town of Hobyo.

Most of the 20 crew are Ukrainian or Latvian; one Russian has reportedly died of illness.

The ship is surrounded by US warships, which is not allowing the heavy weapons to be taken off the ship.

Piracy off the coast of Somalia has cost up to $30m (£17m) in ransoms so far this year, a report has said.




Russians killed in Georgia blast

Russians killed in Georgia blast
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Smoke rises from the scene of the explosion

A blast in Georgia's breakaway region of South Ossetia killed seven Russian soldiers, a Russian commander says.

The soldiers died when a car full of explosives blew up near a Russian military base in the regional capital, Tskhinvali, local officials said.

Georgia said Russia organised the explosion as a pretext to delay withdrawing troops from South Ossetia.

But Russia blamed Georgia, saying it was an attempt to undermine a ceasefire agreement between the two sides.

Tension remains high in the region following the conflict between Russia and Georgia over the summer.

Seven other soldiers were injured in the blast, the Russian military commander in South Ossetia said.

According to a statement from the South Ossetian breakaway government, Russian troops had confiscated the vehicle that blew up from an ethnic Georgian village because it was carrying weapons.

Russian television footage showed a black plume of smoke rising from behind metal gates at the base.
Russia says it plans to keep thousands of troops in South Ossetia

An unidentified Russian foreign ministry official said forces "striving to destabilise the situation" were behind the blast, Russian media reported.

South Ossetian leader Eduard Kokoity went further, describing it as "a deliberate terrorist act prepared by the Georgian Security Ministry", Russia's Itar-Tass news agency said.

Georgian Interior Ministry spokesman Shota Utiashvili rejected the allegation.

"I think this is a provocation with the aim of keeping Russian forces in Georgia," he told the AFP new agency.

EU monitors

The BBC's James Rodgers, in Moscow, says it is the most serious incident in South Ossetia since Russia and Georgia fought over the territory two months ago.


Q&A: Conflict in Georgia

Fighting began there on 7 August when Georgia tried to retake South Ossetia by force after a series of lower-level clashes.

Russia launched a counter-attack and the Georgian troops were ejected from South Ossetia and another region, Abkhazia, several days later.

Earlier this week, European Union monitors entered a Russian-controlled buffer zone around South Ossetia, as part of a French-brokered peace deal between the two sides.

Russia says it will pull out from the buffer zone and another around Abkhazia by 10 October.

But it has recognised the two breakaway regions as independent and says it will keep nearly 8,000 troops in the two areas.

The EU wants its observers to have access to the breakaway regions, but Russia has repeatedly refused to guarantee that



Russia call to halt Somali piracy

Russia call to halt Somali piracy

Pirates wants a $20m ransom for the Ukrainian ship and its cargo
Russia's foreign minister has called for joint international action to halt pirate attacks off the Horn of Africa.

"Russia aims to stop the outrageous actions of Somali pirates," Foreign Minister Sergei Lavrov said.

A Russian warship has already been despatched to Somali waters following last week's seizure of a Ukrainian ship laden with 33 Russian-made tanks.

The pirates are demanding a $20m (£11m) ransom for the vessel which is surrounded by US navy warships.

On Thursday, the European Union agreed to establish an anti-piracy security operation off the coast of Somalia to become operational in November.

Mr Lavrov said the Russians would participate in international efforts to halt the piracy and called for a UN resolution to tackle the problem.




Life in Somalia's pirate town
Somali piracy costs $30m
Tanks 'were for Sudan arms race'

He said Malaysia was also sending frigates to join the US warships surrounding the pirates.

According to Russia's Itar-Tass news agency, the Russian warship Neutrashimy is to commence patrols in the Gulf of Aden on 6 November.

The warship is reported to be carrying marines and commandoes on board.

The Ukrainian vessel - the Faina - was carrying T-72 tanks, rifles and heavy weapons when it was seized last week and is being held off the coast, near the town of Hobyo.

Most of the 20 crew are Ukrainian or Latvian; one Russian has reportedly died of illness.

The ship is surrounded by US warships, which is not allowing the heavy weapons to be taken off the ship.

Piracy off the coast of Somalia has cost up to $30m (£17m) in ransoms so far this year, a report has said.