Bangladesh invites Tata for negotiations
The Economic Times — June 16, 2005

Bangladesh has sent an invitation letter to India's Tata Group for initiating "conclusive negotiations" from July 2 on a $2.5 billion investment deal to set up steel, power and fertiliser units.

A senior official said the government would, in the meantime, finalise its terms and conditions for the negotiations on the proposed deal under which Tata will set up two 5,000-mw gas-fired power plants, one fertiliser plant and a steel mill.

"We will try to conclude the negotiations in the next round of talks instead of prolonging the process," a senior government official said, adding that the Board of Investment had sent the invitation on Tuesday.

The talks - the second round after the Tata Group formally submitted the investment proposal in April - were scheduled for June 19.

The date has now been deferred to July 2 because of the preoccupation of Finance Secretary Zakir Ahmed Khan, who heads the committee for negotiating with the Tata team, with the national budget.

Before starting the upcoming critical negotiations, the government will have to finalise its positions on all important and contentious issues that will be tabled during the meeting.
A member of the national committee headed by Industries Minister Motiur Rahman Nizami identified three issues as being critical to the negotiations - fixing the price of the gas, guarantee of its uninterrupted supply to Tata's plants, and the method of coal mining, if it is leased out.
Apart from demanding pricing at an 'agreed rate', Tata wants guarantee of uninterrupted gas supply for 30 years while the government is likely to allow 20 years' guarantee of gas supply.
After an agreement is signed, Dhaka will hold talks with New Delhi while the Tata Group will negotiate with multilateral lending agencies for funding the projects.

Bangladesh will also talk with the lending agencies for financing infrastructure projects required for the three Tata plants.