Tatas, Bangla set to resolve project issues

The Tata group is expected to reach an agreement with the Bangladesh government on key commercial issues concerning its Rs 9,000 crore-plus investment, said Alan Rosling, executive director of Tata Sons.

"We should conclude talks on crucial issues including environmental assessment, financial details and initial term issues," Rosling said.

After the January 8 meet with local authorities, the next round of talks is expected to be held soon.

"We are due to resume discussion before the end of the month. Other than tax, critical issues include gas (terms and pricing of supply), terms of grant of coal mine, terms of power purchase by the Grid company and land for projects," said Rosling.

On January 8 , Tata's resident director for Bangladesh operations, Syed Manzer Hussain, had held talks with the country's National Board of Revenue on fiscal incentives.

"We made solid progress and believe that the government (of Bangladesh) is positively inclined towards accepting the important parts of our request and suggestions," added Rosling.

The Tata group is reported to have demanded some sops for its projects, which include a 2.4 million tonnes per annum (tpa) steel mill, a 1,000 mw power plant, a coal mine and a million tpa urea fertiliser plant.

According to media reports in Dhaka, export-oriented industries in Bangladesh enjoy tax holiday of five to seven years and investments on power generation get a 15-year tax break.

The government levies five to seven per cent duties on the import of capital machinery while the import-oriented industries and the power-generation companies are enjoying zero duty for their capital-machinery imports.

"Our projects are unprecedented in Bangladesh and we have been discussing how the governement will treat them in terms of tax and other fiscal ncentives," said Rosling.

A study done the Economist Intelligence Unit for the Tata group said that the investment will help the Bangladesh economy grow by two percentage points.

The Bangladesh government is believed to have appointed a foreign consultant to study the matters and help it to determine the power tariff and gas-pricing matters. But the report is yet to be submitted.

Negotiation between the Tata group and the government began in May 2005 with a target to finish by end of October 2005. The delay though seems to have put in a sense of hurry in the present round of talks.

MAKE-UP MOVES

The Tata group is expected to reach an agreement with the Bangla government on key commercial issues concerning its Rs 9,000 cr-plus investment

On Jan 8 , Tata's resident director for Bangladesh operations Syed Manzer Hussain had held talks with the country's National Board of Revenue on fiscal incentives

The Tata group is reported to have demanded some sops for its projects, which include a 2.4 mn tonne per annum steel mill