Entrepreneurs seek 80% subsidy on land in Munshiganj light engineering park

Infographic: TBS

Bangladesh Engineering Industry Owners' Association has sought an 80% subsidy for plot allotment in the light engineering park in Munshiganj, developed by the Bangladesh Small and Cottage Industries Corporation (BSCIC).

In a letter sent to the prime minister recently, the organisation termed the price of land in the industrial park "extremely high" and requested her to rationalise the price and provide a subsidy or grant on plot allotment.

Abdur Razzak, president of the Engineering Industry Owners' Association, told The Business Standard (TBS), "Entrepreneurs would not be able to set up industries here if the government does not provide any subsidy on plot allotment. The price of one katha of land in the industrial park is Tk13.5 lakh, which is very high."

The association asked for the subsidy after seeing that the BSCIC Tannery Industrial Estate in Savar provides similar facilities to leather entrepreneurs in setting up factories.

Jitendra Nath Pal, former project director of the Savar tannery estate, recently told TBS that leather factory owners had to bear only 20% of the total expenses in setting up factories at the tannery estate while the remaining 80% came as a grant from the government.

BSCIC officials, however, refuted the entrepreneurs' claim and said the price of land in the light engineering park in Munshiganj has been fixed based on the project expenditure, including the land acquisition cost.

They mentioned that the corporation had already reduced the price once in response to investors' demand.

One of the officials, speaking on condition of anonymity, told TBS, "Now the BSCIC has nothing to do with reducing the land price. The government can reduce it if it wants. In that case, the government has to pay a large amount in subsidies."

According to sources, the BSCIC called for applications for land allotment in March 2021 as the project was nearing its extended deadline. But, entrepreneurs did not show interest in applying as the land price was fixed at Tk19.95 lakh a katha.

Later, the BSCIC brought the land price down to Tk13.50 lakh per katha and issued another notification seeking applications but that too failed to attract entrepreneurs.

Bangladesh Engineering Industry Owners' Association in its letter to the prime minister said if the government wants to achieve its development goals, the light engineering industries should be provided subsidies like neighbouring India or other countries in Southeast Asia and in the Asia Pacific region.

Abdur Razzak, president of the association said, "The contribution of the light engineering sector to the country's economy cannot be underestimated. This sector is a big source of employment in the country. If 80% subsidy could be given for land allotment in the leather industrial park, why won't the light engineering sector get it?"

He said, "Entrepreneurs in this sector have suffered a lot due to the Covid-19 pandemic. In this situation, if the government does not provide any subsidy or grant, it will not be possible for anyone to set up a factory in the industrial park. This will not help the government attain its goal."

People concerned say most of the light engineering industries in the country are scattered along the highways or in residential areas which have been the main reason behind their low production and inability to maintain social and environmental rules.

To solve the problem, the government started the construction of the light engineering industrial park in 2016 on 50 bighas of land in Munshiganj. The primary target was to set up 362 light engineering factories there.

The estimated cost of the project was Tk280.57 crore and was supposed to end in June 2019.

But, it got extended to June 2022 owing to complexities in land acquisition and various other reasons.