The West Bengal government has agreed in principle to hand over the site at Singur — once allotted to Tata Motors for its Nano project — to the Railways if they want to set up a coach manufacturing unit there.

This comes in the wake of Railway Minister and Trinamool Congress chief Mamata Banerjee expressing her desire to set up a unit at Singur, which she said could be a joint venture involving the State government.

Ms. Banerjee led an agitation that forced Tata Motors to shift its car project out of Singur.

Her demand was that 400 of the 997 acres acquired by the State for the project be returned, for the land was taken without the consent of the owners.

She has stuck to her demand, even as Chief Minister Buddhadeb Bhattacharjee has been emphasising that his government will continue to work for setting up an industrial unit on the site abandoned by Tata Motors.

Chief Secretary Ashok Mohan Chakrabarti said here on Tuesday that he had written to S.S. Khurana, Chairman of the Railway Board, saying that if the Railways were keen on opening a coach manufacturing unit at Singur, the State government would hand over the land.

Details of the project were sought from the Railway Board, he said.

Now that the State government has made clear its intention to hand over the entire land to the Railways, questions have come up over the issue of returning the 400 acres to their erstwhile owners, as has been demanded by Ms. Banerjee and her party.

Tata Motors, to which the land was leased out, had earlier said that it would not like to sit on the land, if the company was adequately compensated for the investment it made.

The State government would talk to Tata Motors for getting back the land after the Railways informed it of its proposal, Mr. Chakrabarti said.

“Let something come up on the land,” Biman Bose, chairman of the Left Front Committee, said. He backed any move that would ensure a “better use of the land which will generate employment opportunities.”