Tatas offers 10 pc stake to Bangladesh

Mumbai, May 1: In its revised proposal for setting up USD 3 billion greenfield operations in steel, fertiliser, power and coal mining sectors in neighbouring Bangalesh, Tata group has offered 10 per cent equity participation to the Bangladesh government in all projects.

The proposal was submitted to Bangladesh's Board of Investment (BoI) yesterday, a Tata group release said today.

The new plan was made after negotiations over pricing of natural gas were deadlocked last year.

Tatas have now proposed a product-linked gas pricing formula, which, according to the company, at today's commodity prices offers Bangladesh an attractive price for its natural gas.

Now Tatas have reportedly agreed to buy natural gas in Bangladesh at over USD 3 per thousand cubic feet as against USD 1.5 thousand cubic feet offered last year. The domestic price for natural gas was currently ruling at over USD 2 per thousand cubic feet.

The revised offer envisages a joint venture with the government of Bangladesh and the listing of its business ventures in the country's stock exchanges. '' The joint venture provides the government of Bangaldesh the option of 10 per cent equity participation in all projects undertaken by the Tatas,'' the company release said.

Tatas reportedly want to set up a 2.4 million tonne steel plant, 1 million tonne urea plant and a 500 MW coal-fired and a 1,000 MW gas-fired power plant.

Tatas have also offered to set up two hospitals and three technical training institutes near the proposed plant sites to implement its commitment to Corporate Social Responsibility (CSR).

''Bangladesh continues to be a focus market for Tata Group's international expansion plans,'' Tata Sons executive director Alan Rosling said. '' We are hopeful that our revised proposal meets the concerns raised by the Bangladesh negotiation team.'' The negotiations of the key terms of these projects commenced last year and have now entered the final stages with the submission of this comprehensive package which addresses issues of gas prices, fiscal incentives and coal mining.

"Tata's negotiating team has given a well thought out proposal and has shown that they are committed to the project. We hope to give our reply soon,'' BoI Chairman Mahmudur Rahman said.

Mr Rosling said '' We strongly believe that these projects are good for Bangladesh and good for the Tata Group. They would have significant positive economic impact on Bangladesh, increasing growth, creating employment, and contributing significantly to the balance ofpayments of the country. We look forward to an early positive response from the Government of Bangladesh''.

UNI