Inside the Tk309cr engineering industrial park where no factories exist

Highlights:

• BSCIC allocated only 29 of 361 industrial plots
• No factories have started operations four years after completion
• High plot prices and poor connectivity deter entrepreneurs
• Unfinished Mollabazar Bridge severely hampers access to industrial estate
• Project cost rose from Tk213 crore to Tk309.59 crore
• Businesses seek 80% plot subsidy and easy-term loans

The Bangladesh Small and Cottage Industries Corporation (BSCIC) has failed to allocate all its plots in the Tk300-crore industrial park in Munshiganj even four years after the completion of the project.

The plan was to move the lathes, metal-cutting operations and toxic fumes from melting iron out of the congested surroundings of Old Dhaka along the Buriganga and bring them together.

Only 29, or 8%, of its 361 plots spread across 50 acres of the government-funded Electrical and Light Engineering Industrial Estate – about 20 kilometres from Dhaka – have been allocated so far. Not a single factory has yet been established.

A recent field visit and conversations with entrepreneurs revealed that the main reasons behind the industrial estate remaining largely vacant are the high price of plots and poor connectivity.

Infograph: TBS

Infrastructure facilities – including land development, roads, drains, electricity, water and gas connections – have already been put in place. But because no factories have been established, the industrial estate in Sirajdikhan, Munshiganj, has now become little more than a ghostly expanse overgrown with weeds.

According to BSCIC's plot-allocation guidelines published on 13 August, the price of land at the industrial estate has been set at Tk2,103 per square foot. With one katha equivalent to 720 square feet, the price comes to around Tk15.14 lakh per katha. This is considerably higher than the price of land at other industrial parks allocated by BSCIC.

Entrepreneurs say the light engineering sector was hit by the Covid-19 pandemic, while the political change in 2024 plunged the industrial sector into further crisis. In this situation, shifting to a new industrial estate while abandoning existing investments is almost impossible for them.

Unfinished bridge a major obstacle

One of the major obstacles to connectivity between Dhaka and the industrial estate is the Mollabazar Bridge over a branch of the Dhaleshwari River. Construction of the bridge began in 2018, two years after work on the industrial estate started.

However, work was halted during the Covid-19 pandemic, contractors became reluctant to continue amid rising construction-material prices, and the contractor was subsequently changed. As a result, the 220-metre bridge has remained unfinished for eight years. Even the local engineering office in Keraniganj does not know when construction will be completed.

The bridge connects Mollabazar in Keraniganj with Sirajdikhan upazila in Munshiganj.

Because the bridge has not been completed, residents on both sides continue to suffer. They have to use ferries to cross the river.

Mohammad Golam Sarwar, an engineer at the Keraniganj Upazila Engineering Office, told TBS, "The bridge was started a long time ago but has still not been completed. A contractor firm was given the work, but they did not carry it out."

He said, "The bridge construction has two components. Although work on the main bridge is underway, the contractor for the viaduct has said they will not carry out the work. As a result, a separate tender will have to be floated for land acquisition and to find a new contractor. The bridge will not be completed anytime soon."

High plot prices

The initiative was taken in 2016 to establish a specialised monotype industrial estate to increase exports of light engineering products and create employment.

The project was originally scheduled for three years but took six years to complete. It was entirely government-funded, with an initial estimated cost of Tk213 crore. As the implementation period was extended, the project cost increased by nearly Tk100 crore.

The project was officially declared complete in June 2022, with the final cost reaching Tk309.59 crore.

Since the estate was completed, BSCIC has issued notices every year inviting expressions of interest from entrepreneurs interested in establishing suitable industrial units.

Informing entrepreneurs that plots remained vacant, BSCIC also wrote to leading business organisations and small and medium-sized light engineering entrepreneurs highlighting the facilities available at the industrial estate. However, the response from entrepreneurs has been limited.

According to BSCIC data, as of 30 July this year, the corporation had managed to allocate only 29 plots. No one knows when industries will actually be established or production will begin.

Abdur Razzaq, president of the Bangladesh Engineering Industry Owners' Association, told TBS, "The price of land is too high. It is simply not possible to establish industries after taking plots at this price."

Mohammad Rashedur Rahman, general manager of BSCIC's Project Management and Implementation Department, told TBS, "We are making our best efforts to allocate the plots, but we are not getting the response we had hoped for."

Asked why the response was poor, he said, "Entrepreneurs say the plot prices are too high. We have held several meetings with industry owners, and they are asking for the prices to be reduced, but BSCIC has nothing to do with the price."

Asked why the land acquisition cost was so high, he said, "The land was acquired by compensating the owners in accordance with government rules."

Saying that they had repeatedly demanded that the government reduce the plot prices but had received no resolution, he added, "The land is expensive, but connectivity has also not improved. A bridge was started many years ago, but it has still not been completed."

BSCIC has written to the industries ministry seeking improved connectivity to accelerate plot allocation at the estate.

A former vice-president of the Engineering Industry Owners' Association, speaking on condition of anonymity, said, "The businesses that already exist are struggling to operate. There is no gas, and we don't get enough electricity. What will happen if we invest again? We cannot even keep our existing businesses running."

He added, "We have told the government at different times that we are interested in moving to the industrial estate, but the land price has to be reduced. Easy-term loans must be arranged to establish industries. But we are not getting any of that. Without government support, it is impossible to move there."

BSCIC says in multi-sector industrial estates, plots can easily be allocated because of demand from multiple sectors. In this industrial park, the situation is exactly the opposite.

Businesses seek subsidy

Toward the end of construction of the industrial estate in 2022, the Bangladesh Engineering Industry Owners' Association wrote to the government seeking subsidies for plot allocation.

In the letter, it sought an 80% subsidy on plot prices, similar to the subsidy provided for plots at the leather industrial estate. The government, however, has not announced any decision on the matter. If the subsidy were provided on the current price, the price of a plot would fall to around Tk3 lakh.