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Last Updated: Monday, 10 July 2006, 11:21 GMT 12:21 UK
Tata halts Bangladesh investment
Worker checks gas pipes in Bangladesh
Tata had planned to build a power plant, steel mill and fertilizer factory
Indian industrial giant Tata has said it is suspending work on a $3bn investment in Bangladesh because of delays by the government.

Tata planned to build a power plant, steel mill and fertiliser factory in the country, making it the single biggest investment in Bangladesh.

On Sunday, senior Bangladesh ministers said general elections due in January made it hard to accept the proposals.

A government spokesman said they hoped Tata would return to Bangladesh.

The announcement by Tata was made after a meeting between its negotiators and officials of Bangladesh's Board of Investment.

"We are extremely disappointed and frustrated... we thought the projects were good for the country's economy, for the people and the balance of payment," Alan Rosling, executive director of Tata Sons, told journalists in Dhaka.

He said they had discussed the issue with senior ministers and key officials for the past two days.

"All of them appreciated our proposals, but they could not go beyond politics," Mr Rosling is quoted as saying by Reuters.

Politics

The BBC's Waliur Rahman in Dhaka says the government is hesitant about reaching an agreement on a big investment plan ahead of the elections.

Reports say some politicians and economists have said that Bangladesh should not rush to accept Tata's proposals because they may eventually go against Bangladesh's interests.

But ministers say the delay is not due to any "anti-India" bias.

Bangladesh has however found it hard to attract money - total foreign direct investment (FDI) in Bangladesh since 1972 has totalled $3bn.

The World Economic Forum (WEF) said in a 2004 report that Bangladesh was one of the most uncompetitive places to do business.


SEE ALSO
Tata to invest $2bn in Bangladesh
14 Oct 04 |  Business
Tata CS celebrates profits uplift
13 Oct 04 |  Business
Textiles boost Bangladesh exports
20 Sep 04 |  Business
UN asks for Bangladesh flood aid
31 Aug 04 |  South Asia
India's Tata makes powerful debut
25 Aug 04 |  Business

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