B'desh rejects Tatas' $3 bn proposal
The proposal included building a steel plant, urea factory, power plant and a coal mine in the country.india Updated: Jul 12, 2006 13:39 IST
Bangladesh's Industries Minister said on Sunday an election due in January made it difficult to accept a $3 billion investment proposal by Indian conglomerate Tata, even though the deal would be good for the country.
Tata has proposed building a steel plant, urea factory, a 1,000 megawatt gas-fired power plant and developing a coal mine in Bangladesh. It would be the biggest single investment in the country.
But last week Tata said it might pull out because of delays in reaching an agreement.
"All of us in the government and myself feel strongly that it is good for Bangladesh, but it is also difficult to take any decision before the coming election," minister Motiur Rahman Nizami told Reuters after a meeting with a Tata delegation.
The secretary-general of the ruling Bangladesh Nationalist Party (BNP), Abdul Mannan Bhuiyan, said the government will consult opposition parties before entering a deal with Tata.
"This is a very big proposal, which we welcome. At the same time, we will also share opinion with the opposition in taking a decision (on the deal)," Bhuiyan said after meeting the Tata representatives.
It was the first time a key government leader spoke publicly about taking the opposition into consideration before finalising a high-stake investment.
Opposition leaders were not immediately available for comment.
Bhuiyan hinted the deal with Tata might be delayed until after the January parliamentary election. "We did all the background work and the next government will be in a comfortable position to take a decision."
Nizami earlier said: "We have explained them (Tata) the realities but they are not convinced. They don't want us to mix politics with economics."
Analysts say the run-up to the election could be volatile.
The main opposition party Awami League may boycott the polls if the government does not accept demands for electoral reforms, which could plunge the country into chaos.
"Everyone was supporting our investment plan and they also are hopeful," said Alan Rosling, executive director of Tata Sons.
Nizami said more time was needed to evaluate some aspects of Tata's proposal, including gas pricing and guarantees of gas supply.
After previous elections in Bangladesh, the victors have changed plans made or approved by the outgoing government, even though that slows the development of the poor country.
Nizami denied the delay was due to an anti-India bias.
"There is a criticism that we are against India, but this is not true," he said.
"We are very selfish about our country's interest. We want friends, not masters."
The Tata team is expected to meet Finance Minister M. Saifur Rahman on Sunday and with the Chairman of the Board of Investment, Mahmudur Rahman, on Monday, officials said.