Bangladesh's Industries Minister said on Sunday an election due in January made it difficult to accept a $3 billion investment proposal by Indian conglomerate Tata, even though the deal would be good for the country.
Tata has proposed building a steel plant, urea factory, a 1,000 megawatt gas-fired power plant and developing a coal mine in Bangladesh. It would be the biggest single investment in the country.
But last week Tata said it might pull out because of delays in reaching an agreement.
"All of us in the government and myself feel strongly that it is good for Bangladesh, but it is also difficult to take any decision before the coming election," minister Motiur Rahman Nizami told Reuters after a meeting with a Tata delegation.
"We will try to take the next move in consultation with the prime minister," added Finance Minister M. Saifur Rahman, speaking to reporters after meeting the Tata delegates.
But Alan Rosling, a senior Tata official, said his side was "frustrated" after talks with Saifur.
Analysts said a clearer view on the fate of the investment would be available at Rosling's meeting on Monday with the chairman of Bangladesh's Board of Investment, Mahmudur Rahman.
The secretary-general of the ruling Bangladesh Nationalist Party (BNP), Abdul Mannan Bhuiyan, said the government will consult opposition parties before entering a deal with Tata.
It was the first time a key government leader spoke publicly about taking the opposition into consideration before finalising a high-stake investment.
"I welcome his (Bhuiyan's) remarks but need to weigh it carefully," said Abul Maal Abdul Muhit, a former finance minister and leader of main opposition party Awami League.
JANUARY ELECTION:
Nizami said more time was needed to evaluate some aspects of Tata's proposal, including gas pricing and guarantees of gas supply.
"We have explained them (Tata) the realities but they are not convinced. They don't want us to mix politics with economics."
Bhuiyan also suggested the deal with Tata might be delayed until after the January parliamentary election. "We did all the background work and the next government will be in a comfortable position to take a decision."
Analysts say the run-up to the election could be volatile.
The Awami League led by former prime minister Sheikh Hasina has warned she may boycott the polls if the government does not accept her demands for electoral reforms, which could plunge the country into chaos.
Nizami denied the delay on Tata was due to an anti-India bias. "There is a criticism that we are against India, but this is not true," he said. "We are very selfish about our country's interest. We want friends, not masters."
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