The Tata Group on Thursday scrapped its ambitious $3 billion investment plans in Bangladesh that included a steel mill and power plant, after four exhaustive years of trying to get requisite infrastructure support.
". . . the (Bangladesh) government will not be in a position, in the foreseeable future, to grant the projects the natural gas commitment they would require," Tata Group said in a statement in Mumbai.
Stating that there was no prospect of taking its proposed projects in that country further, Tatas said that it has communicated its decision to Bangladesh government and the Board of Investment.
Tatas, however, clarified that the group has other interests in Bangladesh and that it would continue to develop them.
The Group had first proposed to invest $2 billion in the country in 2004 and had struck a provisional 15-year gas and coal supply agreement with the government.
Tatas, in April 2005, formally submitted a $2.5 billion investment proposal and then revised it to around $3 billion to set up a 1,000 MW power plant, a steel mill and a fertiliser unit.
In its statement on Thursday, the group said that it had "first proposed four large projects in Bangladesh in 2004 and had intensive discussions with the Government of Bangladesh up until 2006.
"At that point the group suspended further work on the projects, as an agreement on key issues with the government was not possible."
The proposed investments by Tata was said to be the largest FDI inflow into Bangladesh since its independence in 1971.
Since the suspension of project, Tatas have had frequent inquiries on the status of the projects and the prospects for reviving negotiations with the government, but now it has emerged that the projects cannot be taken further, the Group said.