Tata suspends fertiliser project in Bangladesh

DHAKA - India's corporate goliath, Tata Group, has wound up its feasibility study half way through because of restive political situation in Bangladesh following the gruesome killing of former Finance Minister Shah AMS Kibria in a rally bombing.

By From Mizan Rahman

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Published: Wed 2 Feb 2005, 9:54 AM

Last updated: Thu 2 Apr 2015, 4:22 PM

The four-member technical team of the chemical division of the industrial giant will leave Bangladesh today beacause of what it called "unsafe" situation, thus keeping its mission unaccomplished.

The team members were to hold a wrap-up meeting with the Board of Investment (BoI) in Dhaka yesterday after carrying out a week-long feasibility study.

The four-member team would now reschedule its visit and return to the country to finish its assigned job, provided the situation was "back to normal", executive chairman of the BoI Mahmudur Rahman told newsmen.

The Tata team was in Bangladesh to carry out feasibility study aimed at materialising its plan to set up a one-million-tonne-a-year fertiliser factory in the country while the two other teams completed their studies on power and steel plants.

The Tata was going ahead with its groundbreaking $2 billion investment plan in Bangladesh, a proposal considered as the largest in the history of foreign direct investment in Bangladesh.

The proposals included investments of $700 million in basic steel manufacturing, $700 million in power generation and $600 million in a urea fertiliser unit.

Rahman said two of the four-member team arrived in the country on January 26 while the rest was to join them later.

During their stay in Chittagong, the two had held meetings with the Chittagong Port Authority and Chittagong Urea Fertiliser Company. But, the three-day nation-wide general strike programme enforced by the main opposition Awami League had forced the Tata team to go back to India leaving its planned mission unfinished.

In a letter to the BoI, the Group bracketed the opposition-called shutdown as "unfortunate", while making it clear that the team would return to Bangladesh once normalcy was restored.

"We shall reschedule our visit to Bangladesh with your kind assistance after normalcy is restored", said the letter.

Officials of the BoI, however, insisted that the Tata team's departure would not have any adverse impact on its landmark $2 billion investment proposal.

They hoped that the Group would submit its investment proposal to the BoI in early March.

The Tata signed the Expression of Interest (EoI) with the BoI late last year.

Mahmudur Rahman said, it would be "suicidal" for the nation to mar the dynamism in the foreign direct investment (FDI) scenario in recent years through "destructive political activities."

"The onus is on the government to stop recurring violent incidents, including grenade attacks", the BoI executive chief said, making it clear that resorting to economy-devastating activities in protest of terrorist acts could not be a sensible alternative.

Chairman of Tata Group Ratan Tata had also deferred his visit last year following the August 21 grenade attacks on an Awami League rally that claimed 23 lives, including a top Awami League leader.

The Tata's flagship capital involves setting up of a 1,000-megawatt power plant, a one-million-ton-a-year fertiliser factory and a 2.4- million-tonne steel plant.

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