On Wednesday, the Jharkhand Government is slated to sign an MoU with the Centre to set up a municipal corporation to ‘develop’ Jamshedpur as a modern city under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM). If the MoU is implemented, Tata Steel will lose its right to administer the city.

“The town has grown over the years and it now has to be developed under the JNNURM,” said Chief Minister Madhu Koda. But the Tatas are not ready to allow the state to take over the city. “It does not make any sense to us,” said Tata Steel MD B Muthuraman.

In fact, after the state initiated a similar move a couple of years ago, Tata Steel had filed a Special Leave Petition in the Supreme Court challenging it. The petition begs for relief by submitting that it interpret the Article 243Q —which says the Government “may promote local bodies such as municipal corporations to manage urban townships”— in letter and spirit. Tata Steel contends that the power appears discretionary with the use of the word “may”. “However, the exercise of the power is to be guided by a duty to ensure that a modern township is created and not wrecked by encroachment, unauthorised constructions and so on,” said the petition.

With the Supreme Court not yet staying the state’s move, the Jharkhand Government and the Centre are planning to extend JNNURM to the city. The two have already inked MoUs for Ranchi and Dhanbad. “We will will make our submission before the court after the MoU for Jamshedpur is signed on Wednesday,” said a Tata Steel executive on the condition of anonymity.

Deputy Secretary (Urban Development) Sudhakar Singh said: “Since the Supreme Court has not stayed our move till date we are free to move ahead.”

The Tata city

• In 1919, the city was named Jamshedpur by the then Viceroy Lord Chelmsford in honour of its founder Jamshedji Nausherwanji Tata

•Jamshedpur is also called Steel City, Tatanagar or simply as Tata

•Amenities in the city are administered by Jamshedpur Utilities and Services Company Limited (JUSCO), a subsidiary of Tata Steel. It is among the few cities in India to have 24 hours running water and electricity

• In 2004, the city was selected for the UN’s Global Compact City, surpassing contenders such as Bangalore, Pune and Chandigarh