With no gas to spare, Dhaka to seek revised proposal from Tatas

May 9th, 2008 - 3:14 pm ICT by admin  

Dhaka, May 9(IANS) Bangladesh is expected to tell the Tata group that it cannot spare gas supplies for many of the ventures proposed as part of a $3 billion investment plan, a move that could further delay the Indian conglomerate’s entry to the country. Tata and the government are scheduled to resume talks here Sunday next.

The agenda for two-day talks was set last week when Tata’s country director Manzer Hossain met Commerce Adviser Hossain Zillur Rahman and Board of Investment (BoI) chief Kamal Uddin Ahmed.

Tata proposed investments in steel, fertiliser and power sectors worth $1.8 billion, was raised to $3 billion subsequently when its chief, Ratan Tata, visited here in 2003.

An unnamed energy ministry official told The Daily Star newspaper that the government will ask Tata to submit revised proposals so that instead of gas it can use other raw materials in the projects.

One of the Tata group’s local representatives said the conglomerate will listen to the government’s new proposals and may agree to review some of the previously settled issues.

About gas consumption, the Tata representative said the Indian conglomerate does not need the gas right now. The Tatas require gas after four years into the signing of the final investment agreement, he added.

Meanwhile, M. Tamim, chief adviser’s special assistant for power, energy, and mineral resources, last Monday said the government will follow a “cautious” policy in giving new industrial gas connections in and around Dhaka and has decided not to provide any new gas connection in Chittagong region.

“It is true that the country does not have adequate supply of gas. We will inform the matter to all potential investors who want to establish gas-based industries here,” the energy ministry official was quoted as saying.

An official of the Board of Investment (BoI) said the government wants to wrap up the much-talked investment proposals of the Tata group by this year.

“The government has to take immediate decision on the Tata investment proposals as many other potential investors feel shaky to start negotiation,” said a BoI official.

The move is a response to an initiative by Tata’s Manzer Hossain in which the group asked for a resumption of talks that have been on hold since August 2006.

In 2005, the Tata group initially proposed setting up a 1,000 MW power plant, a steel mill with an annual production capacity of 420,000 tonnes and a one million tonne fertiliser unit in Bangladesh.

The then government of Prime Minister Khaleda Zia said the Tata proposals were “politically sensitive” and decided to put them on hold in 2006.

As per media reports, there was also a sustained campaign by politicians, officials and energy experts who felt that Tata was being favoured in being allowed access to the country’s limited gas resources and their pricing.

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