Law coming to ban setting up factories outside industrial zones

The government is going to pass a new law discouraging unplanned industrialisation that may harm farmlands and the environment.

Bangladesh Investment Development Authorities (Bida) has decided to prohibit establishment of factories outside the industrial and economic zones under the new law.

In the second meeting of the Bida's governing body on Thursday, State Minister for Power and Energy Nasrul Hamid proposed to stop haphazard industrialisation.

Representatives of the private sector also gave positive opinions regarding the proposal at the meeting chaired by Prime Minister Sheikh Hasina.

Several ministers, secretaries and private entrepreneurs, who attended the meeting, said no heavy industry would be allowed to be set up outside the economic zones. However, very small companies belonging to small and cottage industries can be operated in the upazilas.

State Minister Nasrul Hamid told The Business Standard, "If factories are set haphazardly, we have to set up new gas and electricity lines for them too. This puts pressure on gas supply and results in power cuts."

So, it is necessary to make the law to bar entrepreneurs from setting up isolated factories, he added.

He further said currently there are around 300 applications for gas and electricity lines at such factories, which are out of the reach of existing lines. Providing lines to these factories would cost the government extra money.

President of Bangladesh Women Chamber of Commerce and Industry Selima Ahmad, a member of the governing board, said setting up a factory in the designated area allows them to enjoy all the government facilities easily. So, nobody should set up big factories outside the economic zones and hi-tech parks.

She also said Bangladesh Small and Cottage Industries Corporation has different industrial parks to accommodate small and medium factories. There is also a system to set up a cluster of factories for local small industries. Considering these facilities, the government is going to ban establishing factories outside assigned zones.

However, she said they considered exempting very small factories for handicrafts in upazilas from this law.

After attending the meeting, Planning Minister MA Mannan told The Business Standard that, "Prime Minister Sheikh Hasina has always urged everyone to develop a planned industrialisation. But, those directions were not much effective in saving environment and farmlands as they were enforced by laws."

He also said 100 special economic zones were set up to ensure planned industrialisation. It is not acceptable that the lands and services in these zones would remain unused while factories would be set up on farmlands.

The planning minister also said they discussed the issue of private investment extensively at the meeting. The entrepreneurs demanded improvement in the ease of doing business index and swift provision of all the other services.

The minister said they discussed bringing more services under one-stop service points. Reforming several laws to attract more local and foreign investments were also discussed at the meeting.

The Bida was established in 2016 by merging two government agencies – Investment Board and Privatisation Commission – to develop the environment of investment in the country. The first meeting of its governing board was held that year.