Bangladesh to delay decision on Tata FDI

Bangladesh is delaying a decision on whether to accept a $3 billion investment proposal from India’s Tata Group by at least six months until a new government is formed...

Bangladesh is delaying a decision on whether to accept a $3 billion investment proposal from India’s Tata Group by at least six months until a new government is formed after January elections, a top official said. Tata, which has proposed building steel, fertilizer, power and coal units in Bangladesh, had requested a decision by the end of June.

‘‘We are very much positive about Tata’s proposal, and there should not be any confusion about our motive,’’ Mahmudur Rahman, Executive Chairman of the government’s Board of Investment told The Associated Press on Sunday in an interview.

‘‘This investment proposal is very much vital for Bangladesh, but Tata will get the best decision if it comes from the new government,’’ said Rahman, who also heads the country’s Energy Ministry. On July 10, Tata’s executive director Alan Rosling is expected to meet in Dhaka to discuss the latest situation, Rahman said.

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‘‘Now we are very much close to each other after a long course of negotiation,’’ he said, adding that talks between the two sides will continue as usual. Rahman said any other major proposals will have to wait as well.

Five-year term of PM Khaleda Zia’s coalition government expires in October, and a nonparty caretaker government will take over after that to hold the national elections in January. But an opposition alliance led by former prime minister Sheikh Hasina has threatened to boycott elections unless and until their demands for reforms in election commission are met.

In 2005, Bangladesh got $810 million as FDI, Rahman said. But he said he was worried that flow of investment would slow in 2006 due to change of regime and volatile political situation ahead of January elections.

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