Tatas finally pull plug on Bangla projects

8216;8216;Now we are frustrated and disappointed as we spent huge money, time and energy in these project,8217;8217; he said.

On Sunday, Bangladesh8217;s industries minister, Motiur Rahman Nizami, said a parliamentary election due in January made it difficult to accept the Tata investment at this point, even though the deal would be good for the country. Nizami said the government needed more time to evaluate Tata8217;s proposals, especially with regard to the price of natural gas and guarantees for its supply.

Ever since the Tatas had first signed the expression of interest with the Bangladesh government in 2004, there was stiff oppostion from the local steel makers who had objected to Tata8217;s projects saying the projects would make local steel companies redundant. There were also objections from economists on the offer of subsidised natural gas to the Tatas.

The Tatas, however, submitted a revised plan in April which increased the price of gas to the market levels. 8216;8216;All of them appreciated our proposals8230; but they could not go beyond politics,8217;8217; Rosling said. 8216;8216;We strongly believe that the investments proposed by us would be beneficial to both Bangladesh and the Tata group,8217;8217; he said in a statement later.

8216;8216;We are disappointed that progress has not been made since we submitted our revised offer. We now understand that the Government is only likely to take matters forward after the elections scheduled for January 2007.8217;8217;

When asked if this means the Tata group is withdrawing its proposal, Rosling said: 8216;8216;We are firm believers in the economic development of Bangladesh and will continue to monitor opportunities in the country closely. However, if indeed we are facing such a delay from the Government, we have no option but to suspend further work on these projects.8217;8217;

On future prospects, Rosling said: 8216;8216;While we are keen to invest in these projects, their revival after a considerable delay must depend on circumstances at that point. We constantly examine opportunities worldwide and would need to assess the attractiveness of investment in Bangladesh compared to other options then available to us.8217;8217;

Tata insiders say the group is looking at various neighbouring countries for investments which includes Indonesia, Malaysia and Thailand. The Tata group firm Tata Steel already has a significant presence in South East Asian countries after it took over Natsteel of Singapore.

8216;8216;If the government can convince Tata that they are quite serious about this investment and if the main opposition party says it has no reservation on this, then they Tata may not pull out of Bangladesh,8217;8217; Mahmudur said. But Rosling said 8216;8216;time is running out8217;8217; and they might look for other opportunities.

Elections in Bangladesh have often slowed development, because the victors changed plans made or approved by their predecessors, analysts say. Some politicians and economists have also said Bangladesh should not rush to accept Tata8217;s proposals because they may eventually go against the country8217;s interests.