Tata's Bangla debut founders

Objections raised by National Revenue Board, Bangladesh's central tax authority.

Dhaka appears reluctant in giving the Tata group fiscal incentives for its proposed projects in Bangladesh.

The Tata group has plans to invest $2.5 billion (over Rs 11,000 crore) in Bangladesh. A 1,000 Mw power plant for $700 million, a 1 million-tonne-a-year fertiliser plant for $600 million and a 2.4 million-tonne steel mill for $700 million are among its proposed projects. The investment, if it materialises, is expected to increase Bangladesh's GDP growth by 1.8 per cent.

In fact, all the leading newspapers in Bangladesh have been carrying a series of reports on the issue quoting the country's Finance and Planning Minister M Saifur Rahman as saying that any special incentive to the Tatas can create an uneven playing field for the domestic industry.

This follows objections raised by the National Revenue Board (NRB), Bangladesh's central authority for tax administration. When contacted, Tata Sons Executive Director Alan Rosling, who is in charge of the Bangladesh project, said, "We did not ask for anything that may go against the fiscal policy of the government. But mega-projects like ours get special treatment across the world."

Rosling said discussions with the government had made "reasonably significant progress" and that the objective was to sign the agreement in November.

In its 29-point proposal on revenue issues, the Tata group has sought exemption from value-added tax and duty-free imports and consideration of local market sales as exports. The group seeks indefinite tax holiday status for most of its projects.

The Tata group had submitted its pre-feasibility study in April. Since then, it has been in talks with the Bangladesh government. Rosling is heading the Tata group, while Communications Secretary Shafiqul Islam is heading the Bangladesh government's negotiation committee.

Besides, the two sides were yet to find solutions to issues such as pricing of gas, project security, purchase of electricity from the proposed power plant and awarding of a coal mine in Barapukuria to the Tatas, the sources said.

Tata's Dhaka plans

A 1,000 Mw power plant for $700 million

A 1-mt fertiliser plant for $600 million

A 2.4 mt-steel mill for $700 million