Tata Motors to compensate Nano vendors

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Tata Motors has readied a compensation package for vendors of its Nano, the world's cheapest car, after they were forced to relocate their units following political agitation, the Economic Times said.

Tata Motors had abandoned the original site of the ultra low-cost Nano at Singur in West Bengal and moved to Sanand in Gujarat in October 2008 over disputes regarding payment for land.

The compensation package is estimated at Rs 2 billion (USD 44 million), the newspaper said on Monday, citing unnamed automotive industry circles.

It said the payment would likely cover at least 75% to 80% of the losses incurred by the vendors due to the relocation costs.

"We have done everything possible to help our vendors. We cannot quantify the size of the compensation package. It will vary from vendor to vendor depending on how much amount they had invested in our units," the paper quoted a Tata spokesman as saying.

Tata Motors began sales of Nano in July last year produced at a unit in Pantnagar in Uttarakhand. It is scheduled to roll out the tiny car from the Sanand factory later this year.