The Hindu : National : Bangladesh welcomes Tata investment

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Saturday, Oct 16, 2004

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Bangladesh welcomes Tata investment

By Our Diplomatic Correspondent

NEW DELHI, OCT. 15. The Bangladesh High Commission has welcomed the Expression of Interest (EoI) signed between the Tata group of industries and the Board of Investment in Dhaka for a possible $2 billion investment in Bangladesh.

"We see this as something positive," the acting Bangladeshi High Commissioner, Masud Bin Momen, told this correspondent. "The [Bangladesh] Government will now examine the specific details," he said.

The next phase would be the signing of the specific memoranda of understanding.

Three projects

The planned investment is for three projects — a 1,000 MW power station, a 4.2 lakh tonnes capacity steel mill and a one million tonne fertilizer plant.

The Government of India, too, believes that the decision to sign the EoI is a "very, very positive" development in bilateral relations, especially at a time when bilateral ties have been less than positive.

"It's a very big step that has been taken. Now, the Tatas have to enter into serious negotiations with the respective Ministries in Bangladesh," highly-placed official sources said today.

The sources said the Tata proposal was processed by Bangladesh's Board of Investment. The group chairman, Ratan Tata, had positive meetings in Dhaka, especially with the Finance Minister, Saifur Rehman. The detailed negotiations between the Tatas and the Ministries on the three projects could begin next week.

Asked since when the investments had been planned by the Tatas, the sources said the process had been going on from the beginning of the year.

Way forward

Analysts believe this is the first piece of "good news" on the bilateral front for some time to come and the way forward in the difficult relationship.

For a long time, Bangladesh has been complaining about the adverse trade balance with India. This project has the potential of addressing the issue. Also, rather than exporting Bangladeshi gas to India, a huge investment is being proposed in that country by one of India's leading industrial houses.

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