Tata’s exit ‘a wakeup call for Dhaka’

August 4th, 2008 - 11:56 am ICT by IANS  

Dhaka, Aug 4 (IANS) The scraping of $3 billion investment plans for Bangladesh by Indian conglomerate Tata Group is likely to deter investors and should be “a wake up call” for Dhaka, that must update its energy security plans, a leading financial daily has said. “The Tata Group deserves appreciation for displaying the utmost patience and keenness to invest in Bangladesh in the face of the government’s usual foot-dragging on the issue for the past four years.

“The group, which has spent a good amount of money in maintaining a resident office to help get its investment plan through, has finally decided to call its investment plan off, possibly, in the backdrop of deteriorating gas situation in Bangladesh,” the Financial Express said in an editorial.

Supporting Dhaka’s contention that it does not have gas to spare for the Tata projects, a line that differs from the findings of the US-sponsored geological survey and of the American multinationals engaged in gas exploration in Bangladesh, the newspaper said neither the Bangladesh government nor Tata had done their ‘homework’ before beginning the negotiations four years ago.

“It remains a puzzle as to why the government has kept the Tata waiting for such a long time when the domestic industries and power plants have been suffering due to short supply of gas,” it said.

It was time for Dhaka to decide on its course for energy security, both on oil and gas fronts, without which future investments could be affected, the newspaper said in an editorial, wondering why top authorities in Dhaka were “putting up a brave face” in the face of the Tata exit.

While the government has justified its lack of decision on the proposal - the biggest ever Bangladesh has received - made in 2004, captains of trade and industry have been critical and have feared a slow-down in foreign investments.

They have also lamented the ‘politics’ behind the virtual rejection of the Tata plans. The last elected government of prime minister Khaleda Zia shelved them saying they were “politically sensitive”.

“Tata’s withdrawal would surely send a negative signal to other prospective foreign investors,” the newspaper said, unless the government worked on its long term energy plans “without wasting time.”

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