Tata group sets conditions for investing in Bangladesh

Vol 9, PW 5 (16 Jun 05) People & Policy

Indias Tata business group wants Dhaka to agree to several conditions before going ahead with its $2.5bn investment plans in Bangladesh.

The first round of working-level negotiations between Bangladesh authorities and Tata officials concluded in Dhaka on 28th May, with a consensus on several key issues. However, a source tells this report that some major differences remain, raising doubts about whether the Tatas will finally make it to Bangladesh.

Sources in the eight-member Tata delegation to Dhaka led by executive director Alan Rosling tell PETROWATCH that the group has asked for nearly 3000 acres of land to construct its proposed steel, power and fertiliser plants. Other requests include: Unambiguous guarantee for 30-year supply of 2 trillion cubic feet gas Laying of two additional pipelines from gasfields to project locations Supply of 6m t/y coal for power project Fiscal incentives other than those already provided by Board of Investment and Bangladesh Export Processing Zones Authority We learn negotiations ended on a positive note and the Tata group plans to resume talks when it returns to Dhaka on 23rd June.

Specifically, we understand the Tatas have asked for 2000 acres of land for its steel plant at Ishwardi; 600 acres of land to set up a power plant near Barapukuria coal mine, and 400 acres for a fertiliser plant at Banshkhali in Chittagong. These demands are unlikely to be fully met, according to Dhaka sources.

One of the most difficult issues is the Tata groups demand for vast tracts of land for its projects. A source in Dhaka said the government would find it tough to acquire 3000 acres of land for the Tata projects, as Bangladesh is a land scarce country.

He said it would be difficult to resettle the hundreds of families living on the proposed Tata project sites.