Tata seeks govt decision on $3b investment plan
Friday, 28 September 2007
M Azizur Rahman
The Indian business conglomerate -- Tata Group -- has sought a government decision on its US$ 3.0 billion investment proposal in steel manufacturing, coal-mining and fertiliser production for which the approval has been pending for nearly three years.
The Group's resident director S Manzer Hussain Thursday held discussion with Energy Adviser Tapan Chowdhury at the latter's office in the secretariat to convey the Tata's latest position on its investment proposal.
"We have waited a lot," Hussain told the FE Thursday after the meeting regarding its pending investment proposal, adding, "We are now looking for a government decision."
The Tata's resident director, however, did not give any deadline -- about how long the Indian company will wait for the government decision.
"But the standstill situation regarding the investment proposal is a cause of concern," he said.
He said that the energy adviser has assured him of taking the issue to the council of advisers for discussion.
Tata submitted its revised investment proposal worth $ 3.0 billion to the Board of Investment (BoI) on April 30, 2006 to install one 2.4 million tonnes annual capacity steel plant at Pabna, 6.0 million tonnes capacity open pit coal mine at Barapukuria of Dinajpur and 1.0 million tonnes capacity urea fertiliser plant in Chittagong.
Besides, Tata proposed to install a 250-300 megawatt (MW) coal-fired power plant at the Barapukuria coal mine-mouth and 475 MW power plant near the proposed steel manufacturing plant at Pabna.
A 116-MW gas-fired captive power plant was also proposed for installation at its proposed steel plant premises at Pabna.
Tata noted that it would require 2.14 trillion cubic feet (TCF) of gas annually for steel processing and captive power production for steel and urea projects.
It sought gas supply guarantee for 10 - 14 years which is to cover their loan repayment period.
For gas pricing, Tata proposed that it should be fixed in line with the international market price for urea and steel between its proposed floor and ceiling levels of $2.0-$4.0 per unit (1000 cubic feet).
But for initial five-six years the range of floor and ceiling level gas price would be between $1.5-$4.0 per unit.
Tata also offered up to 10 per cent of equity of each of its projects to the government of Bangladesh.
Furthermore, it offered a joint venture between Tata and Petrobangla to develop Barapukuria open cast coalmine with 90 per cent and 10 per cent stakes respectively.
On July 10, 2006 the Tata Group, however, announced suspension of its investment plan for Bangladesh citing 'frustrating' delays by the Bangladesh government in approving the project.
It also submitted a letter to the BoI on July 13, 2006 last informing the government about its decision to suspend the proposed investment plan.
Tata group later backtracked from its position and started waiting for government decision on its investment proposal though no headway was achieved afterwards.
In October 2004 Tata had signed an expression of interest (EoI) with the BoI and proposed to invest $2.0 billion in Bangladesh. Later the investment plan was raised to $2.5 billion and, in the latest proposal, to $3.0 billion.
The Indian business conglomerate -- Tata Group -- has sought a government decision on its US$ 3.0 billion investment proposal in steel manufacturing, coal-mining and fertiliser production for which the approval has been pending for nearly three years.
The Group's resident director S Manzer Hussain Thursday held discussion with Energy Adviser Tapan Chowdhury at the latter's office in the secretariat to convey the Tata's latest position on its investment proposal.
"We have waited a lot," Hussain told the FE Thursday after the meeting regarding its pending investment proposal, adding, "We are now looking for a government decision."
The Tata's resident director, however, did not give any deadline -- about how long the Indian company will wait for the government decision.
"But the standstill situation regarding the investment proposal is a cause of concern," he said.
He said that the energy adviser has assured him of taking the issue to the council of advisers for discussion.
Tata submitted its revised investment proposal worth $ 3.0 billion to the Board of Investment (BoI) on April 30, 2006 to install one 2.4 million tonnes annual capacity steel plant at Pabna, 6.0 million tonnes capacity open pit coal mine at Barapukuria of Dinajpur and 1.0 million tonnes capacity urea fertiliser plant in Chittagong.
Besides, Tata proposed to install a 250-300 megawatt (MW) coal-fired power plant at the Barapukuria coal mine-mouth and 475 MW power plant near the proposed steel manufacturing plant at Pabna.
A 116-MW gas-fired captive power plant was also proposed for installation at its proposed steel plant premises at Pabna.
Tata noted that it would require 2.14 trillion cubic feet (TCF) of gas annually for steel processing and captive power production for steel and urea projects.
It sought gas supply guarantee for 10 - 14 years which is to cover their loan repayment period.
For gas pricing, Tata proposed that it should be fixed in line with the international market price for urea and steel between its proposed floor and ceiling levels of $2.0-$4.0 per unit (1000 cubic feet).
But for initial five-six years the range of floor and ceiling level gas price would be between $1.5-$4.0 per unit.
Tata also offered up to 10 per cent of equity of each of its projects to the government of Bangladesh.
Furthermore, it offered a joint venture between Tata and Petrobangla to develop Barapukuria open cast coalmine with 90 per cent and 10 per cent stakes respectively.
On July 10, 2006 the Tata Group, however, announced suspension of its investment plan for Bangladesh citing 'frustrating' delays by the Bangladesh government in approving the project.
It also submitted a letter to the BoI on July 13, 2006 last informing the government about its decision to suspend the proposed investment plan.
Tata group later backtracked from its position and started waiting for government decision on its investment proposal though no headway was achieved afterwards.
In October 2004 Tata had signed an expression of interest (EoI) with the BoI and proposed to invest $2.0 billion in Bangladesh. Later the investment plan was raised to $2.5 billion and, in the latest proposal, to $3.0 billion.