Chinese economic zone project in Ctg moves ahead after years of delay

Highlights:

• Developer agreement with China Road and Bridge Corporation expected by June
• Bangladesh Economic Zones Authority pushing project after years of delays
• CEIZ project stalled over nine years due to agreement issues
• 783-acre zone planned in Anwara under government-to-government deal
• $221 million Chinese loan to fund major infrastructure development
• Textiles, pharmaceuticals, engineering prioritized to attract foreign investment

The long-delayed Chinese Economic and Industrial Zone in Chattogram's Anwara is expected to enter the implementation stage by June, with the Bangladesh Economic Zones Authority (Beza) hoping to finalise a developer agreement after key negotiations with the Chinese side enter their final phase.

Beza Executive Chairman Chowdhury Ashik Mahmud Bin Harun told TBS yesterday, "We expect to sign the land developer agreement with China Road and Bridge Corporation by June."

Infograph: TBS

Officials involved in the project said several important agreements and understandings are nearing completion, allowing work on the project's core infrastructure to begin.

The Chinese Economic and Industrial Zone, or CEIZ, is being developed on nearly 783 acres in Anwara, under a government-to-government arrangement. Despite its large investment potential, the project has remained stalled for more than nine years because no developer agreement has yet been signed.

However, Beza officials said renewed efforts began during the tenure of the interim government and that the pace of work has accelerated further under the new government.

According to officials, the project was delayed for several reasons. Initially, China Harbour Engineering Company was expected to undertake the infrastructure development work. However, the failure to reach an agreement with the company resulted in several years of delay.

Later, in 2022, the Chinese government nominated China Road and Bridge Corporation as the new developer.

The preparation and approval of the development project proposal also took considerable time.

Under the project structure, Beza will implement the off-site infrastructure, including roads, gas, electricity and water connections, while the developer company will carry out the internal development work. Officials said these two parts of the project have not yet progressed in a fully coordinated manner.

Several Beza sources said that although there is a formal agreement with China to establish the economic zone, discussions over the Engineering, Procurement and Construction contract were continuing until recently.

Those negotiations are now in their final stage. Once the contract is completed, Beza is expected to move ahead with the developer agreement.

On 14 March, Ashik, also executive chairman of Bangladesh Investment Development Authority (Bida), presented a 180-day action plan to Prime Minister Tarique Rahman, including implementation of the Chinese economic zone project.

Last week, Ashik also discussed the progress of the project during a meeting with Chinese Ambassador to Bangladesh Yao Wen.

The Beza executive chairman said the meeting had been productive and that both sides had agreed to prioritise the economic zone project in Anwara.

According to Bida, Ambassador Yao Wen said progress on the CEIZ project would send a strong positive message to Chinese investors.

Beza Deputy Secretary Mohammad Zakaria Mithu said land acquisition for the project had been fully completed.

He said the project would be implemented with Chinese loans and that the institution nominated by the Chinese government would carry out the development work.

According to him, textiles, pharmaceuticals and light engineering are being given priority as the main potential investment sectors.

Project framework and financials

Beza has undertaken a fast-track project to establish the Chinese economic zone in Anwara. 

The total cost of the project has been estimated at Tk4,056 crore. Of that amount, $221.18 million, equivalent to around Tk2,136 crore, is expected to come from the Chinese government as a preferential buyer's credit.

The project includes construction of a jetty, a connecting road between the jetty and CEIZ, a central effluent treatment plant and other necessary infrastructure.

China Road and Bridge Corporation, acting on behalf of the Chinese government, will implement the project under the government-to-government arrangement. The project is scheduled to be completed by June 2029.

The economic zone is being established on the eastern bank of the Karnaphuli River in Anwara, around two kilometres from the Karnaphuli Tunnel.

The foundation stone for the project was laid in 2016 during the visit to Dhaka by Chinese President Xi Jinping.

At that time, China pledged to provide concessional loans for the implementation of the project.

At present, Bangladesh has approved two foreign economic zones under government-to-government arrangements.

Among them, the Japanese economic zone in Narayanganj's Araihazar has already seen three companies begin production and is regarded as an example of comparatively rapid progress.

Officials believe that if the Chinese project overcomes its long-standing delays and is implemented successfully, it could play a major role in the country's industrialisation and serve as a significant platform for attracting both Chinese and other foreign investment.