Talks with Tata restart
The government yesterday resumed talks with Indian conglomerate Tata Group after a two-year hiatus, reiterating that it would be unable to supply two trillion cubic feet (TFC) of gas over a 10-year period to Tata considering Bangladesh's current gas reserves.
It suggested that the Tata Group may consider the upcoming coal policy which may open up new avenues for the talks on the proposed $3 billion investment.
Tata Sons Ltd Executive Director Alan Rosling led his side to the investment talks while Board of Investment (BoI) Executive Chairman Kamal Uddin Ahmed led the Bangladesh side.
The government informed Tata Group that it has only eight TCF of gas in reserve and that it has already committed to supply gas to fertiliser factories, power plants, CNG filling stations and local industries in the country.
However, Tata Group again demanded 10 years' guarantee of gas supply for its projects, meeting sources said.
But it also wished to make observations on the draft coal policy and sought a copy of the draft policy. The government informed the Indian steel giant that the policy is on a website and it can make observations on the policy before it is finalised.
After the daylong meeting, the BoI chairman said they informed the group about the gas reserve situation.
"We exchanged ideas about our resource situation. We informed Tata about our gas reserves and the upcoming coal policy. We would have more talks based on today's discussions," Kamal Uddin said.
Alan Rosling said, "The Tata steel and chemical plants we had proposed are based on gas and if gas supply is not secured, discussions are meaningless. If gas is available, we will continue to have discussions. If it is not available, there are places in the world where there is gas."
Rosling, however, said the coal policy may open up new avenues for discussions.
He said they mostly spent yesterday's meeting on the changing situation in Bangladesh, particularly the energy situation.
"Now we have a good understanding of what the current situation is and what to look forward to. There are more issues which both sides need to work on. The government is working on the coal policy issue," Rosling said.
Terming the meeting useful, he said, "I think some work is yet to be done in terms of determining whether there is any substantive progress to be made in future."
Replying to a question, Rosling said the government did not say "no" to Tata, which earlier wrote to the finance adviser asking for the resumption of investment talks.
Energy, industry, and power secretaries and officials from Petrobangla, the Power Division and Tata's Country Director Manzer Hossain were also present in the meeting.
In 2005, Tata Group initially proposed setting up a 1,000MW power plant, a steel mill with an annual production capability of 420,000 tonnes and a fertiliser factory with one million tonne production capability.
The negotiations reached a stalemate in 2006 even though significant progress was made. Both sides provisionally agreed on a 15-year guarantee of 1.25 TCF gas supply to Tata and around 3 million tonnes of annual coal supply. They also agreed on upgrading the gas pipeline to 30-inch diameter from 24-inch diameter.
The Asian Development Bank had agreed to provide financial support for developing the gas pipeline.
A 10-year tax holiday for Tata and guarantee for uninterrupted gas supply was also agreed on.
The two sides then agreed on awarding Tata coalmines in Phulbari and Barapukuria to extract around three million tonnes of coal a year.
However, the decisions were never approved at the ministry level.
The previous BNP-led government was unwilling to make a decision before the scheduled general election.
Tata has launched major investment projects in other parts of the world.
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