Bangladesh likely to revive talks on Tata's $3-billion investment proposal

Mumbai: The Bangladesh government is likely to resume stalled negotiations with the Tata Group on a $3 billion investment proposal next month, media reports quoting company officials said.

Reports in the media said the move followed a letter from Tata resident director in Dhaka, Syed Manzer Hussain, to the commerce adviser seeking resumption of talks that have been stalled since August 2006.

Hussain also met the executive chairman of Bangladesh's Board of Investment (BoI), Kamal Uddin Ahmed, to set the schedule and agenda of the negotiation.

"The talks are expected to resume very soon," Hussain, told newsmen after meeting with interim government's commerce advisor Hossain Zillur Rahman.

Hussain expects the talks to resume soon. Although he did not elaborate, officials said it could resume in the first week of June.

Tatas submitted a $2.5 billion investment proposal way back in 2005 and revised it later to around $3 billion to set up a 1000 MW power plant, a steel mill with an annual production capacity of 420,000 tonnes and a one million tonne fertiliser unit in Bangladesh.

Tatas had also offered a 10 per cent stake to the Bangladesh government in each of these projects.

Sources said the government wants to wrap up the dialogue and settle the investment deal before December 2008.

Although the negotiations came to a standstill in 2006, significant progress had been made. Tentative agreement has also been made on a guaranteed supply of 1.25 trillion cubic feet of gas for a 15-year period and around three million tonnes of coal supply to Tata per annum and upgrading of gas pipeline from the current 24-inch diametre to 30-inch diametre.

The Asian Development Bank (ADB) had agreed to provide financial support for development of the gas pipeline.

During a year-long of negotiations it was also agreed that Tatas would enjoy a 10-year tax holiday.

But, in July 2006, the Tata Group announced suspension of work on its mega investment project because of inordinate delays by the government in according approval to it.