By IANS
Dhaka : Indian conglomerate Tata group's $3 billion investment proposals for Bangladesh are in limbo till 2009, when a new elected government will be in power.
The Tata proposal has been singled out for decision by Bangladesh's "next elected government", official sources here have said.
It "is pending for decision of the next elected government while the rest are being delayed due to government indecision and policy complications", The Daily Star newspaper said Thursday, quoting unnamed official sources.
As per current indications given by Chief Advisor Fakhruddin Ahmed's interim government, general elections called off in January would be held only in end-2008.
Assuming they are held and a new government takes office, a decision might come only some time in 2009, over four years after Tata made the proposal.
The interim government, however, remains undecided on a number of other projects adding up to $6.8 billion.
Among those awaiting decision is one by Global Oil and Energy Ltd, a subsidiary of the Britain-based Mittal Group, which recently expressed its intention to invest $2.9 billion in the country's petrochemical, coal, steel and power sectors.
Several foreign investors have left the country after getting "frustrated" by the government's indecision, lengthy procedures and complicated policies regarding foreign investment in power, gas and oil sectors.
"Any delay definitely sends wrong signals to foreign investors. If the decisions are made within the shortest possible time, it will give positive signals to potential investors," said S. Manzer Hussain, resident director of the Tata group in Bangladesh.
According to sources in the Board of Investment (BoI), FDI declined by 16.5 percent during July-March in 2006-07 fiscal year with a net FDI of $385 million against $505 million during the same period of the previous fiscal year.
Debapriya Bhattacharya, executive director of the Centre for Policy Dialogue (CPD), has expressed his disappointment over the government's indecision.
"There is no doubt that the flow of foreign direct investment in the country declined significantly due to political indecisions regarding some big investment proposals," he said.
"Non-transparent industrial policy of our country is the main reason for delaying investment proposals. Foreign investors do not know where to go and how long it will take for materialising their proposals," said Mahmudul Islam Chowdhury, president of the International Business Forum of Bangladesh.
The Tata group proposes the setting up of large plants in Bangladesh to produce steel, power and fertiliser using natural gas and signed a formal memorandum of understanding (MoU) with BoI in 2004.
A series of discussions were held between the government and the Indian giant on gas price and other related issues. The immediate past government could not reach any decision in this regard and left it for the next elected government.
Tata's last formal communication with the government took place in July last year. They were, however, informally informed that all documents regarding their investment proposal were sent to the chief adviser's office, Hussain said.