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Talks to end today ‘no matter what the outcome is’
Negotiations with Tata make no headway
AZM Anas

          With the final round of talks between the government and the Tata Group faltering, India's corporate giant wants to see "significant progress" in its US$3.0 billion investment proposal.
"We call upon the government to make significant progress in negotiations so we can reach an agreement (quickly)," executive director of Tata Sons Ltd Alan Rosling said as he emerged out of a meeting with Energy Division Advisor Mahmudur Rahman Tuesday.
But Rahman blamed the Tata for the protracted negotiations as the Indian corporation remained "rigid" in its demands for incentives that go from lower gas prices to sovereign guarantee for the natural resources.
"We can't give you (Tata) two facilities at a time-lower gas price, but prolonged guarantee period," Rahman said.
Rahman, who is also the chief of the Board of Investment, said if the Tata group stuck to its gun, its investment in Bangladesh would never materialise making it elusive.
Meeting insiders said the Petrobangla Tuesday placed a model for what it called "the cost of guarantee" before the Tata negotiators.
The officials of Petrobangla made it clear that the longer guarantee period should lead to higher prices.
"It's like the mode of insurance premium …if you want strong guarantee of gas supply, you have to pay higher prices for the item," meeting sources said.
The negotiators of Tata Monday placed their proposal of gas and sought uninterrupted supply of the energy source for a period of 20 years.
During the talks, negotiators of Tata gave the examples of countries where gas is provided to big clients at lower prices, sources said.
In response, the home side cited the examples India, Pakistan and Malaysia where the prices of gas are higher, sources added.
Gas price for industrial clients in Bangladesh is $2.35 for per thousand cubic feet, while the Tata proposed $1.0 for per mcf.
Petrobangla officials insisted that gas prices for large consumers like Tata should not be determined at the cost of small consumers.
Meeting insiders said the Tata sought guarantees of 20 and 25 years for its planned steel and fertiliser units respectively.
In addition, the Indian industrial conglomerate demanded a 2.14 trillion cubic feet (TCF) of gas to run its proposed power and steel plants and a fertiliser factory.
The government side did not pour cold water on the proposal of the gas amount, it is reliably learnt.
"We should be talking about the issues of energy security and prices rather than debating on the guarantee period and the amount of gas to be provided for Tata. Since we've to give gas after the guarantee period, so it is meaningless to debate on the guarantee period," one Petrobangla official said.
In another development, the two sides agreed to untie the Barapukuria coal mine from the total investment accord, meeting sources confirmed.
"We're eager to provide gas in the greater interest of pushing the deal ahead …that's why, Barapukuria coal mine has been unbundled from the main agreement,"
"It's a good move that Barapukuria has been disintegrated from the main deal. Now, we'll get the opportunity to negotiate it independently," a home-side negotiator, who wanted to remain anonymous, told the FE.
Officials of the Petrobangla acknowledged that there was "little progress" in negotiations that have dragged on over the last six to seven months.
"We're no longer interested to continue talks (with Tata)," Mahmud said, making it clear that today's meeting would be the last one.
Rahman reiterated that the government would take the final decision on Tata's investment taking the possible impacts on the social, political and economic fronts into account.
"We're not looking at the economic aspect, alone … we'll be considering social and political matters as well," Rahman said.
Rahman also said the final round of talks between Bangladesh and the Tata Group would conclude Wednesday, regardless of the outcome on the prices of gas and electricity.
"The talks will end Wednesday no matter whether an agreement could be reached on the prices of gas and electricity or not", Mahmud told newsmen.
Meanwhile, Tata executives had a meeting with the officials of the Power Division on the fixation of prices of electricity to be produced by its power plants.
Tata officials will hold a meeting with power division secretary ANH Akhter Hossain this morning.


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