Monday, May 9, 2005
Tata to invest $2.5 bn in Bangladesh
Indo-Asian News Service
Dhaka, May 9, 2005
India's Tata Group is set to finalise a $2.5 billion deal with Bangladesh by November under which the industrial giant will invest in the power, steel and fertilizer sectors.
A preparatory meeting between senior officials from Tata and the Bangladesh government here Sunday decided to start formal investment negotiation by May 23 and complete it by August 31, Daily Star newspaper reported Monday.
Tata, India's largest private sector group, intends to set up a 1,000MW power station, a steel mill with an annual capacity of 420,000 tonnes and a one million-tonne fertiliser unit.
The proposed investment will be Bangladesh's biggest deal. It will be the second largest overseas investment plan by the Tata Group after Singapore and comes after a six-month feasibility study.
Ratan N. Tata, chairman of the Indian conglomerate, visited Bangladesh in mid-October when the group signed an expression of interest agreement to set up gas-based industries in Bangladesh.
Before signing the investment agreement, the government had to identify Tata's requirements with regard to gas, pipelines, site selection and land requirements, Minister of State for Energy and Mineral Resources A.K.M. Mosharraf Hossain said.
According to Tata officials, the investment will help Bangladesh earn around $26.6 billion in net foreign exchange in 30 years that would go a long way in meeting the country's balance of payment position.
They said the projects would also provide employment to 5,600 skilled and unskilled people and stimulate the country's gas exploration and development, besides diversifying its energy basket.
The gas pipeline, pricing and pressure, coal mining and exploration, cross-border railway transportation, customs regulations, freight charge and investment incentives will be the key issues during the negotiations with the government, said Tata Sons Executive Director Alan Rosling.
State Power Minister Iqbal Hasan Mahmud, who also took part in the meeting, urged the Tata representatives to make an equity partnership with the stock market, saying this will help decrease pressure on the country's foreign exchange reserves after the investment.
The one million tonne fertiliser unit and the 1,000MW power plant will use natural gas as a raw material, and the steel unit will also be gas-powered.
Bangladesh has abundance of gas reserves but faces acute shortage of power, steel and fertilisers.
Besides Hossain and Mahmud, the prime minister's principal secretary Kamal Siddiqui, secretaries from the finance, shipping, foreign and power ministries and Board of Investment Executive Chairman Mahmudur Rahman attended Sunday's meeting.
Tata Power Managing Director (MD) Firdose Vandrevala, Tata Chemicals MD Prasad R. Menon, Tata Steel MD B. Muthuraman, Tata Steel General Manager Sukaran Singh, Tata Group Bangladesh Resident Director Manzer Hussain, chief of Tata Steel project in Bangladesh Indranil Sengupta and chief of the Tata Power project in Bangladesh N. Suresh represented the Tata group.
© HT Media Ltd. 2004.