February 9, 2006	Thursday	Muharram 10, 1427

DHAKA, Feb 8: A proposed investment of $3 billion by the Tata Group depends on whether the Indian conglomerate is willing to shift from its demand for special incentives, Bangladesh’s energy and mineral resources adviser Mahmudur Rahman said on Tuesday.

If Tata wants guaranteed supply of gas, it will have to pay at international rates, he said. “No local industries get guaranteed gas supply as they pay at local rates.”

Mr Rahman made it clear that the future of the Tata investment on the group’s willingness to make concessions on its demand for special incentives. “If it remains firm on its demand, the investment will not be possible in Bangladesh,” he told journalists after a meeting with the Tata negotiators, led by Alan Rosling, at his office.

The Tata negotiators are learnt to have expressed their dissatisfaction with the delay in the talks at the meeting.

Mr Rahman said the negotiation would have been over had Tata shifted from its demand for special incentives. It will not be possible for the government to provide the special incentives Tata wants, he adds. “The government will consider not only the economic and technical aspects but also the political aspect when giving its decision on the investment.”

The adviser insisted that the talks would end on Wednesday, regardless of whether the government and Tata reached an agreement on the price of gas and electricity or not.

The negotiation committee, headed by Communications Secretary Shafiqul Islam, will send a report to the cabinet committee, headed by Industries Minister Motiur Rahman Nizami, on the negations.

A ministerial committee or the cabinet would settle the issues, which the negotiators failed to agree on.

Meanwhile, the Asian Development Bank on Tuesday advocated in favour of the Tata investment, claiming that the investment proposal received by the government appeared “broadly viable and offer potentially significant economic benefits to Bangladesh”.

“Some of the direct economic benefits from the proposed projects are increased GDP, improvements in the balance of payments and employment creation in less developed areas of Bangladesh,” said an ADB release.

The economic impact assessment, conducted at the request of Bangladesh government, focused on economic impacts as well as on the strategic and policy issues associated with the proposed investments, said the statement.

“However, the wider economic impacts may be even more significant,” it said, stressing the need for enhancing performance as an investment destination in achieving more rapid economic growth and meeting objectives for poverty reduction.

The ADB observed that the proposed projects were by far the largest inward investments ever proposed in Bangladesh, and had the potential to accelerate private sector led economic growth and to transform the country’s image with other foreign investors.

“These projects have great promise for furthering the industrialization of Bangladesh,” said ADB country-director Hua Du, cautioning that the challenges of complex negotiation as well as ensuring and monitoring the implementation of the projects. “But these challenges can be met.”