The Hindu : Business : Tatas put on hold investment plans for Bangladesh

Online edition of India's National Newspaper
Tuesday, Jul 11, 2006

Business

Business

Tatas put on hold investment plans for Bangladesh

Negotiating team is still studying Tatas' proposal, says Board of Investment chief

DHAKA: Disappointed and frustrated over the delay by the Bangladesh government in approving its $3 billion investment in steel, power and coal sectors, the Tata Group on Monday announced the suspension of the plan until the general elections next year in Bangladesh.

"We are extremely disappointed and frustrated (over the delay in clearing the plan)... We think the projects are good for the country's economy, for the people and the balance of payment,'' Alan Rosling, Executive Director of Tata Sons, told reporters here.

Mr. Rosling, who held talks over the weekend with Bangladeshi ministers and officials on the implementation of the plan, said, "We are suspending the proposed $3 billion investment plan.'' He hinted at going to another destination. The planned investment might be spent on projects elsewhere, he said.

Mr. Rosling, who had met Finance and Planning Minister M. Saifur Rehman, Industries Minister Matiur Rehman Nizami and Principal Secretary to the Prime Minister on Sunday had told reporters that "if the Government does not make a decision we cannot wait. We have been waiting for ten weeks for the government response.''

Under the investment plan, the group had offered to set up a 2.4 million tonne steel plant, two power plants, a coal mine and a fertilizer plant.

Manzer Husain, Tata Resident Director in Dhaka, told PTI, after meeting Mahmmudur Rahman, Chief of Bangladesh's Board of Investment (BoI), that "we are suspending and will be no further work on the plan ... we have put in resources here though and so we will wait for the new government to come after the polls in 2007.''

`A long wait'

"After the new government comes we will then assess our position and decide,'' Mr. Husain said, adding "the ball is mostly with the government now... but it has been frustrating as it has been a long wait.''

Asked if the Tatas would move to a new location following uncertainty here, Mr. Husain said "we are constantly looking for possible new opportunities.''

The Tatas had earlier set a May 31 deadline for a decision by the Dhaka Government. Sources said Tata officials wanted to know the Government's mind after a lengthy study and revised submission of plans over natural gas pricing as well as other issues. Government leaders have said a consensus was needed among the country's political parties for approving such a plan. If the plan finally went through it would be the single largest direct foreign investment for Bangladesh since its birth in 1971. — PTI

UNI reports:

Mr. Rahman said he had communicated to the Tata officials that the government's negotiating team was still studying their proposal.

He said the Government negotiation team would sit in a review meeting on July 16 to finalise its report, which would be submitted to the Ministerial Committee headed by Industries Minister Matiur Rahman Nizami. Then the Ministerial Committee would submit the report to the Cabinet for final consideration, Mr. Rahman said.

The BoI chief said the Cabinet was the final authority to take a decision on the Tata proposal.

He claimed that the delay was due to Government's effort to maintain transparency in signing the deal.

Printer friendly page
Send this article to Friends by E-Mail

Business