Dhaka: Indian conglomerate Tata could be shifting its focus away from its $3 billion investment plan in Bangladesh, with a top company executive saying that though the interim government had responded positively to its projects, “Tata needed more than just words.”
With no progress on the massive power, steel and fertilizer projects since negotiations ended with the government in 2006, Tata Group Resident Director (Bangladesh) S Manzer Hussain is leaving Dhaka and not being replaced.
“In terms of investment proposals, if something is getting delayed in one place obviously the focus must shift to other places. And when the focus shifts to other places the resources get locked up and when the resources get locked up in other places then they may not be available immediately for some other places,” Hussain was quoted as saying by the Daily Star newspaper.
Hussain, who is set to take up a position with the top Indian company in London after two years of service in Bangladesh, said the interim government had responded positively to the project but Tata needed more than just words.
Replying to a question on whether he is frustrated with the delay, he said frustration is a very strong word but “further delay will increase concern.”
In April 2006 Tata formally submitted a $2.5 billion investment proposal for setting up a 1,000 MW power plant, a steel mill with an annual production capacity of 420,000 tonne and a one million tonne capacity fertilizer unit in Bangladesh. Later, Tata revised its proposal saying it would invest around $3 billion.
However, the previous Khaleda Zia led Bangladesh Nationalist Party government was unwilling to take a decision ahead of the parliamentary polls in 2006, while the present caretaker government has said it has other priorities.
”Bangladesh has always been at the top as per our priority list, but the fact is of late we had to divert our attention to some other locations and at later stage we may come back when decisions are taken,“ said Hussain, resident director, Tata Group.
He said since 2006, Tata has launched major investment projects in other parts of the world.
“During the period from April 2006 to today Tata Group bought the largest steel maker in Europe ‘Corus´ at a cost of around $13 billion along with a soda ash plant in the US at a cost of $1 billion. The group also invested for the production of a 4000 mega watt power plant in India, is going ahead to invest in a steel plant in Vietnam and going to explore a coal plant in Indonesia,” Hussain said.
The main obstacles to the project’s implementation were the political scenario and the complex nature of the investment, he stressed.
“The circumstances that have evolved in Bangladesh during the last one year could have been the reason for delay,” Hussain noted.
With regard to the need to revisit its investment proposal, the top executive said the economics of the project possibly need to be revisited.
About resettling the gas price, he said the price was offered two years ago and for this reason it could need adjustment.
Hussain said all the products Tata proposed to produce are in strong demand in the country.
“Bangladesh has a shortage of power, fertilizer and steel. The proposals are placed for basic industries, which are needed for the development of any developing nation. These are going to be one of the foundations for accelerated economic growth,” he underlined.
The Tata group first signed an “expression of interest” on a $2 billion investment proposal with the Bangladesh government in October 2004.