Bangladesh has ruled out any immediate decision on the proposed $2.5bn investment by Tata Group, saying it was yet to get a clear picture on the country's gas reserve
DHAKA: Bangladesh has ruled out any immediate decision on the proposed USD 2.5 billion investment by Tata Group, saying it was yet to get a clear picture on the country's gas reserve to guarantee supply to the Indian conglomerate.
"One of the issues closely related to the Tata investment is the gas reserve as its proposal tags the uninterrupted supply of gas to Tata project for several years
. . It is not possible to take a decision as we don't have any concrete data about the actual gas reserve," Commerce adviser Mirza A B Azizul Islam told after a meeting with an Asian Development Bank delegation.
"Before assessing the gas situation we cannot give a guarantee," he said.
When pointed out that the past Bangladesh Nationalist Party (BNP) government of Khaleda Zia had the gas issue analysed by experts, Islam said "different experts have different assessments. A local expert has one version while a foreign expert has another version".
The proposal of Tata and and Asa Energy and coal mining company is awaiting the government nod since 2005.
The Tata proposal became uncertain after it demanded gas supply guarantee for 10 years, and made a gas tariff offer which the state-run regulatory Petrobangla rejected.
The adviser's comments came as the ADB expressed concern that the government's indecision about the investment proposals was giving "wrong signals" to investors, sources said.
The past government had in principle accepted Tata's proposal in 2004 and a series of meetings were held between the two sides. The last round of talks between the Tata Group and the government ended on February 10, 2006 amid disagreements.
The apple of discord was supply and prices of gas and electricity to the Tata projects.
During the last round of negotiation, the government had offered gas for the proposed steel and fertiliser plants at the same rate as in the Singapore market while the Tatas had proposed a rate of USD 1 per unit.
But the high-powered Tata delegation headed by Alan Rosling proposed a price which was one-third to one-fourth of what the government was demanding.
The Tata team had proposed the establishment of a 455 MW coal-based power plant from which it would supply power to the government with a capital investment of USD 430 million and also set up a 500 MW power plant for its own use.
Tata team estimated that the price of coal that it would extract from the mine would be around USD 60 per ton and the price of power it would supply to the government would be between 4.5 cents and 4.8 cents per unit.
Government officials, however, told the Tata team that the price of coal should not be more than USD 30 and the price of power should be 3.1 cents per unit.
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