Govt, Tata re-start $3b investment talks next month
The government and Tata are going to restart talks on the Indian conglomerate's stalled investment proposal sometime in the first week of next month.
Tata's Bangladesh project director S Manzer Hossain yesterday met Commerce Adviser Hossain Zillur Rahman. He also met Board of Investment (BoI) Executive Chairman Kamal Uddin Ahmed to set the schedule and agenda of the negotiation.
The US$3billion investment proposal from Tata remained undecided since August 2006.
In 2005 the Tata Group initially proposed to set up a 1,000MW power plant, a steel mill with an annual production capacity of 420,000 tonnes and a fertiliser unit with one million tonnes capacity in Bangladesh.
Official sources said the Ministry of Finance has made a directive to the BoI to invite any representative of Tata for a dialogue afresh.
After the meeting with the Tata representative yesterday, the commerce adviser told journalists," Definitely we make sure that the country's interests are protected when we welcome foreign investment."
Hossain Zillur Rahman said Tata's interest to invest here as well as interests shown by big investors like Mittal meant that Bangladesh is a good destination for investment.
About the scheduled investment talks with Tata, the BoI chief said something will happen soon. “You will must see if it is happened,” Kamal Uddin Ahmed added.
Manzer Hossain, Tata's Bangladesh representative, said they still take interest in investing here and wait for a deal. A team from India will visit Bangladesh to start talk with the government next month.
Manzer, however, said,"Many things need to be reviewed because so many changes took place in the last two years."
Sources said the government wants to wrap up the dialogue and settle the investment deal before December 2008.
Although the negotiations came to a standstill in 2006, significant progress had been made. Both sides provisionally agreed on a 15-year guarantee of 1.25 trillion cubic feet (TCF) gas and around 3 million tonnes of coal supply to Tata per annum and upgrading of gas pipeline from the current 24-inch diametre to 30-inch diametre. The Asian Development Bank (ADB) agreed to provide financial support for development of the gas pipeline.
During a year-long series of negotiations it was also agreed that Tata would enjoy a 10-year tax holiday facility and uninterrupted gas supply would be guaranteed. The two sides then agreed that a coal mine in the middle of Phulbari and Barapukuria coal fields would be awarded to Tata for exploring around 3 million tonnes of coal a year. However the decisions never got endorsement at ministry level.
The previous BNP-led government was unwilling to make a decision before the scheduled general election, while the present caretaker government said it has other priorities.
In the meantime, Tata has launched major investment projects in other parts of the world.
During the period from April 2006 till date, Tata Group bought the largest steel maker in Europe Corus at a cost of around US$ 13 billion along with a soda ash plant in the US at a cost of $1 billion.
The group has also invested for the production of a 4000- megawatt power plant in India, and is going to invest in a steel plant in Vietnam and to explore a coal plant in Indonesia.