DHAKA, 14 October 2004 — India’s giant Tata conglomerate signed a $2 billion deal yesterday to build a power plant and factories in Bangladesh, the largest single investment in the impoverished country.
Under the agreement Tata will establish a $700 million, 1,000-megawatt power plant, a $600 million fertilizer plant and a $700 million steel mill, all powered by natural gas, in western Bangladesh.
Tata group chairman Ratan N. Tata came to Bangladesh along with other top executives on a two-day visit to sign the agreement.
“We want to play an important role in the development of Bangladesh and there are all kind of ingredients available here to set up those industries, mainly, natural gas and manpower,” he said after signing the agreement.
The Bangladeshi government has verbally agreed to supply natural gas for 20 years to the proposed projects with the price of the gas to be decided later.
Daily gas demand at the three plants is expected to total 200 million cubic feet initially, rising to 350 million cubic feet when they are fully operational.
“We are here to assure bilateral development, not to exploit natural resources like gas,” Tata said. Tata group has a presence in Nepal, Sri Lanka, the United States and Singapore through its subsidiary companies.
“This investment by Tata Company is the single biggest foreign investment for Bangladesh,” said Mahmudur Rahman, chairman of the government’s Board of Investment.
The Tata deal is worth five times Bangladesh’s total foreign direct investment for last year, while foreign investment since 1972 is just three billion dollars, Mahmudur Rahman said.
The expression of interest was originally set to be signed in the second week of September but was postponed by Tata in the wake of the Aug. 21 blast on an opposition rally which killed 21 people and injured hundreds. Bangladesh has so far failed effectively to exploit its substantial natural gas deposits.
