The Tata Group has shortlisted Ishwardi and Sirajganj as two prospective sites for its steel and power plants and is likely to sign final agreement with Board of Investment (BoI) by April.

As part of the spadework, Tata has appointed Indranil Sengupta, a senior manager of Tata Group in India, as its steel and power operations head in Bangladesh.

In a historic visit to Bangladesh Tata Group Chairman Ratan Tata led his company signing an expression of interest (EoI) with BoI on October 13 on $2 billion investment plan in steel, power and fertiliser sectors. It was the biggest ever investment proposal in Bangladesh by a single foreign company.

According to the EoI, Tata Group is to sign final investment agreement with BoI within six months of the signing.

Sources said the Tata feasibility team has made intense study on some proposed sites and initially selected the two between which one will be selected finally for the plants. Sources, however, said although initially Ishwardi was speculated to be the site of Tata's choice, Sirajganj site having transport and other facilities has impressed Tata feasibility team.

Tata was searching for a site, which has riverine connection as it likes to use river route for transport of ore and other raw materials from Chittagong seaport. Sources said the feasibility team found that the navigability of river from the seaport to Sirajganj is better than that to Ishwardi.

Sources said Tata is searching for a 2000-acre land having river and other modes of transport facilities. In the site Tata will set up a 2.4 million-tonne capacity steel plant at a cost of $700 million and two 500-megawatt power plants at a cost of $350 million each.

In addition, the Group is also looking for another 500-1000 acres of land beside the plant site for establishing a mini-city to accommodate around 10,000 Tata employees. Sources said the Tata's plan for a mini-city may create another Jamshedpur, a city developed around Tata's steel plant in Jharkhand.

The Tata feasibility team held meetings with the chiefs of Sirajganj and Pabna district administration and made field trips to the sites.

Sources said the Tata team has selected the two sites since both offer smooth road, rail and riverine communication facilities. Tata's chemical division officials, meanwhile, visited Chittagong where the company plans to set up its fertiliser plant.