Business | Investment
Tata abandons investment plans in Bangladesh
India's giant business conglomerate Tata Group has abandoned a $3 billion investment plan for Bangladesh as it failed to win a government commitment for undisrupted gas supplies for the proposed projects.
- By Anisur Rahman, Correspondent
- Published: 21:27 August 2, 2008
Dhaka: India's giant business conglomerate Tata Group has abandoned a $3 billion investment plan for Bangladesh as it failed to win a government commitment for undisrupted gas supplies for the proposed projects.
"It is clear that the [Bangladesh] government will not be in a position in the foreseeable future to grant the projects the natural gas commitment they would require," the Indian conglomerate said in a statement late Thursday.
"Consequently, there is no prospect of taking further these [proposed] projects" for installing steel, power and fertiliser plants.
The Tata announcement came two months after Energy starved Bangladesh asked the conglomerate to revise its $3 billion investment plan apprising it of the country's dwindling gas reserves in existing fields and prospects of the upcoming coal policy.
Tata's local communication agent Adcom Limited in a separate press release, however, said despite its decision to abandon the $3 billion investment "the group has other interests in Bangladesh, which it will continue to develop".
It said the Tata Group first proposed four large projects in Bangladesh in 2004 and had intensive discussions with the government until 2006.
At that point, the press release said, the group suspended further work on the projects, as agreement on key issues with the government was not possible.
"Since then the Tata group has had frequent enquiries on the status of the projects and the prospects for reviving negotiations with the government.
In an instant response to Tata's announcement, Board of Investment chief Mohammad Kamaluddin Ahmad told the private Bdnews24 news agency that it was not possible for Bangladesh to supply the huge amount of gas Tata would need for its project.
"Tata has informed us that it will not pursue the proposal for gas-based projects in Bangladesh," Ahmad said.
But he said most of the Tata proposals were based on coal and "we need to make the coal policy before having talks on the issue".
The talks between the government and Tata were last held in May this year, having been stalled since August 2006 after a nearly one-year series of extensive negotiations in which both sides provisionally agreed on a 10-year guaranteed supply of 1.25 trillion cubic feet of gas and around 3 million tonnes of coal to Tata annually.
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