New Delhi: Diversified conglomerate Tata Group on 31 July abandoned plans to invest $3 billion on power, steel and fertilizer projects in Bangladesh, after spending four tiring years trying to secure infrastructure support.
The Tatas, who made global headlines with the acquisition of Anglo-Dutch steel maker Corus and British auto companies Jaguar and Land Rover, first took their investment proposal to Bangladesh in 2004.
As part of the formal investment blueprint submitted to Dhaka in April 2005, Tata Steel proposed to set up a 2.4 mtpa plant, Tata Chemicals a one-million-tonne urea plant and Tata Power a 1,000 MW thermal power plant at a combined cost of $2.5 billion, which was to be the single largest FDI inflow into Bangladesh since its independence in 1971.
The group had struck a provisional 15-year gas and coal supply agreement with the government, but Dhaka reneged on the commitment following a climate of political instability.
This had frustrated Tatas’ investment plans to the point that the group was forced to suspend work on the projects.
“...the (Bangladesh) government will not be in a position, in the foreseeable future, to grant the projects the natural gas commitment they would require,” Tata Group said in a statement here on 31 July.
A letter to this effect was also handed over to the Executive Chairman Board of Investment of the Bangladesh Government, the statement added.
Tatas, however, clarified that the group has other interests in Bangladesh and it would continue to develop them.