Tata Motors and other companies who purchased the land in Singur to set up a plant and auxiliary industries to manufacture Nano cars, have decided to hold on to the land even as the facility has moved to another location.

Union railway minister, Mamata Banerjee has said that she would set up a rail factory if the land is freed up by the company. Tata and other vendors have said that they would hold on to the lease titles. The Rail Minister plans to build a coach manufacturing facility on the land.

A vendor, Caparo Engineering has written to the West Bengal Industrial Development Corporation (WBIDC) and has sought land compensation with interest. The vendor has now decided to hold on to the land in Singur.

Tata came to the decision to pull out of Singur in October 2008 after Banerjee led an agitation demanding the return of the land to the farmers who did not give their land with consent.

Around 55 vendors who were related to the Nano project have signed lease agreements with WBIDC. Vendors including Tata Ryerson sources and Sona Koyo Steering Systems said that they would pay the lease payments.

The lease agreement decided the annual rental at Rs 8,000 per acre and Rs 1 crore a year for the first five years, for 646 acres for Tata motors.

The rail minister said during her rail budget speech that the Railways would be willing to set up the factory if the state government agrees to give it the land after returning 400 acres of land to the farmers.

Bharat Heavy Electricals Ltd also expressed interest on the site to set up a power plant however the state electricity board later said that the project is not viable. Later the proposal from rail minister to set up a coach factory on Nano site was announced.

The West Bengal government has accepted the proposal from the Railways and has asked Banerjee to rethink her demand of returning 400 acres to the farmers. The State government and the Railway board have exchanged letters on the proposal however they have not come to an agreement yet.

The state government has demanded that Railway board prepare a firm proposal and the Board has said that first the land should be recovered from the lease.

The state government has said that the land acquired legally is not returned however it cannot say anything about what the railways would decide to do. Tata Chairman Ratan Tata has said that he would not stall development projects but he wants to be compensated for the land.