Indian conglomerate Tata said on Thursday it would tie up deals this week to build hotels in Johannesburg and Cape Town in what would be the group's first investment in SA's tourism sector.

Head of Tata's large hotels chain, Raymond Bickson, said in Johannesburg Tata planned to sign a deal last night to build a hotel at Melrose Arch and a second deal was due to be signed in Cape Town today.

These marked further steps in Tata's plans to become a large investor in SA. Plans to build a R650 million ferrochrome smelter in SA were advanced, and Tata had expressed interest in buying Anglo American's Highveld Steel & Vanadium.

Chairman Rata Tata, who is also in SA at present, could not confirm whether Tata had submitted a bid for Highveld.

Melrose Arch Development Company head Nicholas Stopforth confirmed it was signing an agreement with Tata to explore a hotel development.

However, he said talks were also under way with two other foreign investors in this regard.

Tata, with revenues of about $18 billion last year, has 56 hotels in India and 13 in countries such as Mauritius, the UK and Sri Lanka.

Tata and Bickson were speaking on the sidelines of an awards ceremony for the group's vehicle dealers in SA.

The dealers heard Tata was hoping to launch its controversial "one-lakh" car, which would cost about $2000, early in 2008.

Controversy surrounds the development of the super-cheap car because of potential effect on roads and the environment. SA's road infrastructure is already creaking under the weight of rapidly growing vehicle numbers.

There are also concerns internationally about the increase in pollution caused by more cars on the roads.

The launch of Tata cars late in 2004, through the Imperial group, exceeded expectations and Tata is planning to double last year?s sales in SA to 20000 units this year.

Manny de Canha, head of Imperial?s vehicle-importing business, said on Thursday it was the best-performing marque in SA to date, achieving 14000 sales in the 14 months since it was introduced .

Business Day
Publisher: I-Net Bridge
Source: I-Net Bridge