Energy & Power

FDI

Bangladesh Giving Studied Looks to Tata Proposal: Saifur

Finance and Planning Minister M Saifur Rahman said in New Delhi that his government was giving a studied look to Indian industry giant Tata's proposals for US$ 3.0 billion investment in Bangladesh.

"These are complicated and involve many imponderables," he told an interactive meeting organized by the Federation of Indian Chambers of Commerce and Industry (FICCI).

Saifur, who was accompanying Prime Minister Khaleda Zia on a three-day visit to the Indian capital, indicated that there was no agreement on Tata's demands for a coalmine, land allocation and 25-year gas allocation.

He said that the India's industrial conglomerate Tata Group has been asked to revise its investment plans as the Bangladesh authorities and Tata unable to agree on key issues like the pricing of gas for the proposed projects.

"The Tata Group is revising the proposals. As many as 23 agreements will have to be signed before the Tata proposals can go forth," he said.

While favoring the Tata proposals for power and steel production, Saifur Rahman said the fertilizer plant was not being looked at with favor as "there is nothing exceptional about it".

About gas supplies, the minister referred to the issue of a firm commitment for 25 years and said: We don't know if there are enough reserves. Then, there is the question of price. The Tata's gas price offer is embarrassing.

Indian press quoted Saifur as saying that they (Tata) have offered $1 per million British thermal units (MBTU) at a time when "our industries are getting supplies at $2.3 MBTU.

"We cannot discriminate among industries so we will have to give the same to Tata also."

Saifur Rahman along with Foreign Minister Morshed Khan and a 50-member business delegation assured the business meeting that many issues raised during the deliberations would be favorably addressed at the earliest, provided there is reciprocity from the Indian side.

He said that beyond the business considerations, "we are looking at the Tata plans as an example. This will create an environment in which India and Bangladesh relationship will go in a different direction."

India is currently the 11th largest investor in Bangladesh. The share of FDI flow from India in 2004 was just 1.9 percent of the total proposed investment in Bangladesh.

BDNEWS