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Bangladesh discounts fears over Tata Group pullout

DHAKA - Bangladesh Finance Ministry Saturday discounted fears that the pullout by India's Tata Group of its 3-billion-dollar investment plan for Bangladesh would affect the flow of foreign direct investments to the resource starved country.

Finance Advisor Mirza Azizul Islam, who is the de facto finance minister in the interim government, said the decision by the Indian investment group to take their money elsewhere would not create an adverse impact on the level of foreign investments.

"The withdrawal of millions of dollars planned for massive investments in steel, engineering and other heavy industry could have had an adverse impact on the business climate in Bangladesh if (the government) had taken a wrong decision ignoring national interests," Islam said.

The Indian industrial giant has asked for guaranteed gas supplies for a 20-year period to its projects in Bangladesh which the interim regime is unable to meet with a sharp rise in domestic consumption of gas since last year.

On Thursday, the Tata Group formally announced that it would shelve its much talked about investment package for Bangladesh because of gas shortages.

The Tata investment offer ran into trouble with the local authorities after the Group signed an expression of intent with the Bangladesh Board of Investment in 2004.