Second round of Tata-Bangladesh negotiation slated for next month
The Financial Express — May 30, 2005

India's Tata conglomerate will start the second round of negotiations with Bangladesh government next month for its planned $2.5 billion investment, officials said on Sunday. They said the first round of three-day talks ended Thursday and the second round was expected to start on June 19. Media reports said the two sides ended their talks on key issues, but there were differences in some areas.

"Both the government and the Tata group are very much positive as both sides are progressing gradually towards the complex investment deal," Alan Rosling, executive director of Tata Sons, was quoted as saying by The Daily Star newspaper. Tata submitted its pre-feasibility study last month on its planned $2.5 billion investment in energy, steel and fertiliser sectors.

Coal, instead of natural gas, could be used as primary source of energy for Tata's proposed 2.4 million tonne basic steel plant and 1,000 megawatt power plant, reports said. The group has sought licences to explore coal mining blocks in northern Bangladesh where a number of coal fields, including the major Barapukria mine developed by China is located.

During the just-concluded negotiations Tata proposed 3,000 acres of land for its three plants, but The Daily Star said the government wants the Indian investor to cut down its land requirements as meeting Tata requirement would mean relocating some 600 homes. The group wants a 30-year guarantee for natural gas supply, while the Dhaka government proposed 15 years right away and another 15 years subject to availability of new gas fields, the report said.

Tatas have also sought special incentive investment package, it added. Natural gas export has been a hot political issue for Bangladesh since the late 1990s when proposals were made to Dhaka for exports to India by donors as well as New Delhi. If the investment plan gets through, it would be the single largest direct foreign investment for cash-strapped Bangladesh.