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Sunday, October 30, 2005

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Govt needs 'separate law' to deal with multidimensional investment
10/30/2005
 

          The government needs to make a separate law to deal with large-scale package investments like that of Indian Tata Group and Dubai-based Dhabi Group, as experts say the big ventures involve various new dimensions.
This necessity emerged during the negotiations with the Tata Group as the government negotiators found that the existing rules and policies do not cover such large investments coming as unsolicited offers, reports UNB.
Official sources said the public-procurement issues are involved in the investment of Tata Group as the company has offered to sell its products, particularly electricity to the government.
But the existing rules, regulations and other policies do not support any purchase from private sector on the basis of unsolicited offer.
At present, there are some rules and policies like the Public Procurement Rules (PPR) and the Private Sector Power Generation Policy to deal with private-sector investment.
Even the government constituted a new rule last year - the Private Sector Infrastructure Guideline-to deal with private investment in infrastructure sector.
But none of the rules allow the government to accept any unsolicited offer in the case of public procurement. The present laws provide for open tender to procure any product for the government.
"That's why the government needs a new legal instrument to deal with the investment of Tata Group," said an influential member of the government negotiation team on condition of anonymity.
He said the same goes for the other large-scale package investments proposed by the Dhabi Group and other foreign companies.
The government negotiation team, led by Communications Secretary Shafiqul Islam, last week held a meeting with a five-member Government Steering Committee for an appraisal of the latest state of the investment talks with the Indian industrial giant.
The negotiators apprised the members of the Steering Committee of the tenor of the Tata talks and the necessity of enactment of new law to deal with Tata Group's multidimensional investment plans.
The negotiation team informed the committee that the discussions with the Tata are going on in the right direction and that there has been some "significant progress" made.
Particularly, the government has agreed in principle to purchase about 550mw electricity from Tata's power plant. But the tariffs of electricity were yet to be settled.
"The tariff issue will be settled after enactment of the proposed new legal instrument," said the member of the negotiation team. He said now the ministry concerned would initiate a move to frame the new rule.
The final round negotiations between the government and the Tata Group started in the last week of September. The talks between the two sides now remained suspended ahead of SAARC Summit and other occasions.
Tata had offered to invest about US$2.5 billion in the country to set up a 1000mw coal-fired power plant, a steel plant and a fertiliser factory. The development and operation of a coal-mine is also included in the Indian firm's business plan.
On the other hand, the Dhabi Group from the Gulf state offered to invest $2.0 billion in telecommunications, pharmaceutical and other sectors that hold fair business potential.

 

 
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