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Rediff.com  » Business » Ratan Tata in Bangladesh to discuss investment

Ratan Tata in Bangladesh to discuss investment

October 13, 2004 17:53 IST

Tata Group Chairman Ratan Tata arrived in Dhaka on Wednesday on a three-day visit during which he will hold discussions with the government about his $2 billion investment plans in Bangladesh, which included setting up a steel industry, a power generation project and a fertilizer factory.

The 67-year-old business tycoon, who along with senior Tata executives flew in from Mumbai in his private jet, would call on Prime Minister Khaleda Zia and hold talks with Finance Minister Saifur Rahman, Industries Minister Matiur Rahman Nizami, State Minister for Energy Mosharraf Hossain and State Minister for Power Iqbal Hassan Mahmood.

The most important event is the signing of the expression of interest with the state-run Board of Investment for the proposed steel, power and fertilizer projects.

The Tatas have proposed to set up a $700 million plant in basic steel industry, an equal amount in a 1,000-megawatt power generation project, while another 600 million dollar will go into a fertiliser factory.

If the proposals get through, it would be the largest single foreign investment for cash-strapped Bangladesh and the first time that Tata will go abroad with Greenfield projects.

So far, they have ventured overseas through acquisitions -- UK (Tetley), South Korea (Daewoo Commercial Vehicles) and Singapore (NatSteel group).

The Bangladesh government has formed an inter-ministerial review committee headed by Industries Minister Matiur Rahman Nizami to go through the proposals. Other members are State Minister for Energy AKM Mosharraf Hossain, State Minister for Power Iqbal Hassan Mahmood and Prime Minister's Principal Secretary Kamaluddin Siddiqui. BOI Executive Director Mahmudur Rahman is the member secretary.

BOI sources said that the committee had only one meeting and it is yet to review the Tata proposal and set the gas price, the key raw material for the proposed Tata industries.

"We have to go through details of the Tata proposal before signing a final agreement," Mosharraf Hossain said.

As the three projects would be implemented in two phases, they would initially use 200 MMCFD (million cubic feet of gas per day) of natural gas. This would go up to 350 MMCFD when they start working at full pelt, the sources said.

The Tata Group is not a stranger to Bangladesh, having done business with the country before. It has sold 20,000 commercial vehicles, including 1,000 Indica taxis.

Group trading firm Tata International has also been a leading importer of leather from Bangladesh.

Ratan Tata was originally scheduled to travel to Bangladesh on September two, but the visit was deferred due to the volatile political situation following the August 21 assassination attempt on Bangladesh's main opposition leader Sheikh Hasina.
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