The New Nation - Internet Edition

Staff Reporter

Tata would not go for any investments in steel without guarantee from the Bangladesh government on uninterrupted gas supply.

The Indian conglomerate made it clear, as the government reopened formal negotiations with it on its record three-billion-dollar investment plan yesterday.

"It is as simple as that, if gas is not supplied on a secured basis then we would not go for steel in this country," Allan Rosling, executive director of Tata Sons, told journalists adding "There are a lot of other countries who have gas."

Senior Tata officials led by Alan Rosling met Executive Chairman of the Board of Investment (BoI) Kamaluddin Ahmed nearly two years after the conglomerate postponed what would be the biggest single foreign investment in Bangladesh.

Energy secretary Mohammad Mohsin, Power secretary Fouzul Kabir Khan, and senior officials were also present from the host side at the meeting that lasted nearly four hours from 10:30am. The meeting was meant to discuss Bangladesh's changing energy supply situation.

The Government, however, is yet to reply positive or negatively, as Tata said if the Government was unable to provide gas then the Group would not invest in steel in Bangladesh.

BoI executive chairman Md Kamaluddin Ahmed said that they discussed the resource position of Bangladesh.

He said, "We informed them about our demand-supply situation of gas and discussed the upcoming coal policy. We neither agreed nor disagreed to provide them gas."

"The country's current gas situation is not as we wished it to be," Alan Rosling said ruling out the possibility of revising their proposal in the wake of the changing energy supply scenario.

He, however, did not dismiss other investment opportunities. "The new coal policy, once published, would open up new avenues for further discussions." "At this stage, the meeting was useful and effective," he added.

In 2006 Tata offered to build a steel plant, two power plants, a fertiliser plant and a coal mine, after upgrading a 2004 plan.

However, Tata's Bangladesh chief Syed Manzer Hossain said the group was encouraged by "positive indications" from the Bangladesh government.

"Yes, there is an intention to move it forward," said Manzer Hossain after the meeting adding, "It's a positive development that we formally resumed discussion after two years. Lot of developments took place on both sides and we've to look at those developments."

The company was ready to discuss all the issues, the company official said. The government has promised to "take up all necessary projects" to promote long-term economic growth.

Asked when the next round of the staggered negations will be held, Manjar Hossain said there could be further engagement after announcement of the coal policy by the Bangladesh government since coal-mine project has been incorporated in Tata's investment proposal.

A draft coal policy has been submitted to the Energy Ministry for scrutiny. The Ministry is likely to submit it to the Council of Advisors after two months for consideration.

The Caretaker Government resumed the stalled negotiations with the Indian conglomerate last month.

Tata 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.

Although the negotiations came to a standstill in 2006, significant progress had been made. Tata wanted 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.

But the Government of Bangladesh found some of the demands made by Tata was impossible to be fulfil and the talks faced a setback.