Dhaka, July 17:

The Bangladesh government hardened its stand on some of the specifics of Indian conglomerate Tata’s $3 billion investment proposal even while declining to take a final decision on them citing the uncertain political climate in the run-up to the elections.

In an apparent attempt to tie down the future government, the government’s negotiation committee on the Tata proposal, which met yesterday, recommended that the gas price at no point of time would be less than the prices offered by international oil companies. Also, Tata would have to compete with others for its coal supplies.

“There will be an international bidding for investment in the Barapukuria Coal Mine project and Tata will have to win the bid,” Mahmoodur Rahman, energy advisor in the government and chairman of the Board of Investment (BOI), was quoted by the Daily Star newspaper. He said the committee continued to work on Tata’s revised proposal since neither the government nor the Indian conglomerate has formally cancelled the proposal. “The Tata told us that they are ready to reinitiate the negotiation,” he said.

“The negotiation committee did a great job by keeping the country’s interest on top,” Mahmudur said, refuting the criticism that the government lacks skills to deal with such a huge investment offer.

The proposal would be submitted to a ministerial committee headed by industries minister Motiur Rahman Nizami, who represents the Islamist component in the coalition government and also heads the Jamaat-e-Islami. Tata’s country director Manzer Hussain declined to make any comment on the negotiation committee’s new stance. “Tata would make official comments only when it officially gets the government’s new policy,” UNB quoted him as saying.

Rahman said that the committee has finalised the report. “By the end of this month, the report will be submitted to the high-powered ministerial committee, which would then put it to the cabinet for final consideration,” he said. “We will convey the cabinet decision to Tata,” which will then decide whether they will invest or not.”

Officially, a decision on the Tata proposal stands suspended as prime minister Khaleda Zia’s government said that Bangladesh will not go for any deal before the upcoming elections. However, the deal is not closed and the government’s effort is to harden the terms while processing it but not deciding on it.

As per Tata’s pricing formula for two five-year phases, Mahmudur Rahman said that the price of per thousand cubic feet (MCF) gas stands at $3.10 for its fertiliser project and $2.60 for the steel plant. “But the committee did not accept the proposal.”

The negotiation committee, however, agreed with Tata’s second option in which the price for per MCF gas was offered at $3.70 for its fertiliser project and $3.30 for the steel plant, the adviser said.

The negotiation committee also preferred unlimited flexibility instead of the upper capping proposed by Tata. It means the gas price will go up and down with the price fluctuation of the Tata products without any upper limit.