Tata pullout won’t affect foreign investments, minister hopes

August 2nd, 2008 - 12:49 pm ICT by IANS  

Dhaka, Aug 2 (IANS) The Tata Group’s decision to scrap a $3 billion investment proposal is unlikely to affect the flow of foreign direct investment (FDI) in Bangladesh, a top official hopes. Finance Adviser Mirza Azizul Islam, performing ministerial functions in Bangladesh’s army-backed interim government, Friday said: “I hope there’ll be no adverse impact on the investment.”

Tata, the Indian business giant, had made an offer of $2 billion investment in 2004 and raised it to $3 billion later. Successive governments have taken no decision on it and the last elected government of Prime Minister Khaleda Zia had shelved it, terming it “politically sensitive”.

Islam’s reaction came a day after Anisul Haq, president of the Federation of Bangladesh Chambers of commerce and Industry (FBCCI), expressed disappointment at the Tata decision and feared that this might affect FDI inflow, United News of Bangladesh (UNB) news agency said Saturday.

Haq lamented that the people of Bangladesh had not been given a clear picture since the government had viewed the entire thing “politically”.

While the government of Chief Adviser Fakhruddin Ahmed has justified its lack of decision on the Tata offer, economists and experts have been critical. Tata had sought to develop fertiliser, power, steel and agro-based industries, utilising Bangladesh’s gas reserves.

Islam said Tata sought guaranteed gas supply to its planned projects for a 20-year period from Bangladesh, “which itself is suffering from lack of smooth supply of gas due to sharp rise in domestic demand”, The Daily Star said.

The Indian industrial giant Thursday said it would not pursue its long-awaited $3 billion investment plan in Bangladesh, as the country would not be in a position, in the foreseeable future, to give the projects the natural gas needed.

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