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Tata's proposed steal plant

11 June 2006, 18:00 PM
LETTERS TO THE EDITOR
By M. A. Kamal, Dhaka
11 June 2006, 18:00 PM
From news and articles it is learnt that Tata Group of India in its investment plan has proposed to set up a steel mill of 24-lakh tons capacity in Bangladesh. The major part of that production will be sponge iron and the whole of it will be exported out of Bangladesh. Associations of steel and iron goods producers in Bangladesh have stated that the mills under them produce 21 lakh tons of iron and steel products annually. According to these associations, since their capacity is near to Tata's offered capacity, they will lose their present market to Tata and their investment will be threatened. On the other hand, Tata has said that a major part of their capacity will be utilised for producing sponge iron, a very small quantity of which is produced in Bangladesh. Moreover, Tata will also produce such products which are imported by Bangladeshi mills for use as raw material.

During the first part of the 1980s, a proposal was made by an entrepreneur to produce sponge iron in the now defunct Chittagong Steel Mills Ltd (CSM). The proposal was to use gas as heating fuel in the furnace. The proposal did not materialise for a few reasons, one of which was the unethical concept of burning gas to produce a commodity for export when millions of people of the country were far away from their country's resource, the gas.

The present proposal of Tata is not different from that. It would have been different, if coal was thought of as the heat generating agent, instead of gas.

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Both coal and gas generate heat. The difference between the two is that the use of the former is limited to generation of heat only. On the other hand, gas has other uses.

In the making of iron and steel from iron ore or scrap a great amount of heat is required. Between coal and gas as the heat generating agent, the capacity of coal is greater. As far as I know, steel mills in India burn coal to produce iron and steel.

Gas as a heating agent is preferred to other agents for some reasons. It is clean. Once its distribution network is established, it does not require any carrier and storage as coal and oil do. Titas Gas has 11 lakh gas connections in Dhaka city. If 7 persons behind a point is the average, 77 lakh people get benefit from this clean heating agent. If oil or wood had to be burnt for these 77 lakh people, the loss that Dhaka city's environment would have sustained would have been catastrophic.

Some people have given their views on the proposal of Tata from the points of country's economic growth, tilting of one side of balance of payment, opportunity, cost/price, etc. Commoners like me, who do not understand the complexities of these exercises, try to find what the quantity of resources we have in our homes and the quantity the producing fields will yield in future.

Tata has set a condition in its proposal that if in future Bangladesh goes out of gas reserves, the government will have to import gas to feed its plants. Where have they found that this condition is met ? CSM could not be kept alive for high prices at which its two basic materials, scrap and pig iron, were to be procured. Tata's plant, in fact any entity, is not to be kept alive by artificial breathing means. Is Tata's proposal of giving Bangladesh government 10% of the shares of its investment an allurement to obtain this guarantee ?

An investment proposal should not be looked alone from its size. Is the quantity of gas in Bangladesh so much that a portion of it can be burnt to produce steel for export? Why can't the furnaces of the mills be coal-fired?