Sunday, July 3 2005 13:17 Hrs (IST) - World Time -

Dhaka: Bangladesh has agreed to give India's Tata group 1,800 acres of land for establishing steel and power plants under a $2.5 billion investment plan.

On the first day of a second round of long-drawn negotiations today (July 3, 2005), the Government offered the land near the Ruppur Nuclear Power Plant project at southwestern Iswardi district, private UNB news agency reported.

Quoting unidentified sources, the agency said the Tata team accepted the offer in principle, but a reply would be made after visiting the area.

Earlier, Tata had said they required 2,400 acres of land for its three projects--a 1000MW power plant, a steel mill and a fertilizer factory. They had wanted 2,000 acres at Iswarid in Pabna district to set up power and steel plants and 400 acres at Banshkhali in Chittagong to set up a fertilizer factory.

The conglomerate has also proposed to develop a coal mine at Barapukuria in northern Dinajpur district.

After the opening talks that lasted about one hour and a half, Finance Secretary Zakir Ahmed Khan who led the Bangladesh side told reporters, "We can only say we are making very good progress." He did not elaborate.

Alan Rosling, the head of a 20-member Tata negotiation team, also echoed the Bangladesh official.

The current second-round of negotiations would continue till July 7.

Earlier, the first round of negotiations took place on May 25-27. The second round was supposed to begin on June 19, but the Government changed the schedule.

Executive Chairman of the Board of Investment (BoI) and Advisor of the Energy Ministry, Mahmudur Rahman, told reporters that the four major issues, out of total seven, which would be highlighted are land allocation, tenure of gas supply, purchase of electricity and mining technology to be used in the proposed coal-mine project.

The three others that would be discussed in the third and final round are tariff of electricity to be purchased from Tata power plant, price of gas to be supplied to the Tata Steel mills and fertilizer factory and the fiscal incentives to be offered to the projects.

He hoped negotiations could yield progress. "We are hopeful of concluding the negotiations by August 31," Rahman said.