Tata suspends $ 3 billion investment plan in Bangladesh

DHAKA: The Tata Group has suspended work on its $ 3 billion investment plan in Bangladesh because of "frustrating" delays by the Bangladeshi authorities.

"All the development activities on our proposed projects have been suspended since we did not get any decison from the government," Alan Rosling, executive director of Tata Sons, said in Dhaka today.

"We are frustrated and disappointed as we spent huge money, time and efforts (on the plans)," he added after a meeting with Mahmudur Rahman, Bangladesh's energy adviser and executive chairman of the Board of Investment.

"We are extremely disappointed and frustrated (over the delay in clearing the plan)....We thought the projects were good for the country's economy, for the people and the balance of payment," said Rosling.

Rosling held talks over the weekend with Bangladeshi Ministers and officials on the implementation of the plan. "We are suspending the proposed three billion dollar investment plan" he said.

He hinted at going to another destination. The planned investment might be spent on projects elsewhere, he said.

Rosling also met Finance and Planning Minister M Saifur Rehman, Industries Minister Matiur Rehman Nizami and Principal Secretary to the Prime Minister yesterday. He said, "If the Government does not make a decision we can't wait. We have been waiting for ten weeks to the government response.”

Under the investment plan, the group had offered to set up a 2.4 million tonne steel plant, two power plants, a coal mine and a fertiliser plant.

According to Manzer Husain, Tata Resident Director in Dhaka, "we are suspending and will be no further work on the plan ... we have put in resources here though and so we will wait for the new government to come" after the polls in 2007.

On Sunday Nizami also said the government needed more time to evaluate Tata's proposals, especially as regards the price of natural gas and guarantees for its supply.

Some politicians and economists have said Bangladesh should not rush to accept Tata's proposals because they may eventually go against the country's interests.

Tata has proposed building a steel plant, a urea factory and a 1,000 megawatt gas-fired power plant and developing a coal mine in Bangladesh.