The government has proposed the Ruppur land, but Tata favours 2000 acres of land in Muladuli, Iswardi because of its arable and densely populated characteristics, sources said.

"The site may suit Tata as it is near the Padma River as well as the Pakshey rail station," Mahmudur Rahman, chairman of the Board of Investment and advisor to the energy ministry, told The Daily Star yesterday.

He said the government has to consider the Bangladesh's interests first.

The Tata team is scheduled to visit the site with their industrial layout expert today before sitting for further negotiations tomorrow.

Finance Minister M Saifur Rahman, meanwhile, sits today with the representatives from BoI, Bangladesh Export Processing Zones Authority and the National Board of Revenue to decide on the tax incentive to be extended to Tata.

The government wants to allow Tata a 10-year tax holiday facility in line with its policy.

The Tata team talked yesterday with the energy, power, land and communication sub-committees to settle issues including guarantee of uninterrupted gas supply and infrastructure development.

Both sides have almost agreed on a 20-year guarantee of 1.25 trillion cubic feet (TCF) gas supply to Tata and upgrading of gas pipeline from the current 24-inch diameter to 30-inch diameter. The Asian Development Bank (ADB) will provide financial support for development of the gas pipeline.

The two sides also agreed on awarding of a coal mine for exploring around 4 million tons of coal a year to Tata in the middle of Phulbari and Barapukuria coal fields.

Petrobangla will award Tata the coal field on the basis of its "set blocks awarding system".

All the issues will be finalised after a viability study on the Ruppur site for Tata investment.

The government and the Tata Group on May 9 agreed to kick off formal negotiations on May 25 and wind it up by August 31 to clear the way for signing the investment contract before November 30.

Tata on April 20 formally submitted a $2.5 billion investment proposal for setting up a 1000 MW power station, a steel pant with an annual production capacity of 420,000 tons and a 1-million-ton fertiliser unit.