Bangladesh-tata's Investment Proposal Not 'positive', Says Tapan

BANGLADESH

Tata's investment proposal not 'positive', says Tapan
Staff Correspondent, NewAge

16th April 2007

Power and energy adviser Tapan Chowdhury on Sunday said that the Tata Group's investment proposal was not 'entirely positive' and the government did not agree with several aspects of the proposal. He, however, felt that the government should take a decision on the group's investment proposal within 3-6 months.

'There are many problems in the investment proposal. The incentives including the gas price that Tata wanted were not realistic. We have to review every aspect of the proposal before taking a final decision,' he told reporters.

Tata has been awaiting the government's approval for the more than $3 billion investment proposal to set up steel, fertiliser, power and coal plants.

Tapan said Tata should be informed of the problems that are present in their proposals.

The adviser said the file on the investment proposal was now pending with the chief adviser.

'It is not right that any big investment should get extra incentives. Tata wanted guarantee of continuous supply of gas for a long time. But we have gas that will last till 2012 if we do not explore and find any new gas-fields,' he said.

He, however, favoured fresh negotiations with Tata which will based on the report and suggestions of a secretary-level committee that has studied and assessed the proposal.

Sources in Petrobangla as well as in the Energy Division feel that even the price formula fixed by the secretary-level committee under the BNP-Jamaat government was not appropriate as the suggested gas price for Tata plants would be much lower than the price in the international market. They pointed that India was going to sign a gas import deal with Iran and the total cost of gas, including transmission cost, would be over $7 at present, whereas, according to the BNP-Jamaat government's secretary-level committee's suggestion, the gas price for Tata would be only around $2-$3.7 for its power, steel and fertiliser plants.