Investors in economic zones demand high-pressure gas supply, uninterrupted electricity

Amid rising utility costs and infrastructure concerns, investors operating in Bangladesh's economic zones have urged the government to ensure high-pressure gas supply, uninterrupted quality electricity, and necessary permissions for captive power plants.

During a high-level meeting with the Bangladesh Economic Zones Authority (BEZA) on Monday, they voiced serious concerns over recent gas price hikes and US tariffs, warning that the lack of essential services could hinder industrial growth and discourage new investment.

The Executive Body of the Bangladesh Economic Zones Investors Association, led by President M A Jabbar, held a meeting with the chairman of the Bangladesh Economic Zones Authority (BEZA) on 15 April at Hotel InterContinental, Dhaka, where they placed their demands for high-pressure gas supply, uninterrupted quality electricity, and permission to establish captive power plants wherever required.

The meeting also discussed the recent imposition of tariffs by the US Government and the recent gas price hike by the Bangladesh Energy Regulatory Commission (BERC). Investors expressed their dissatisfaction over these developments and urged the government to revisit these issues.

Aparup Chowdhury, Chief Executive Officer (CEO) of the Bangladesh Economic Zones Investors Association, told The Business Standard, "The price of gas for new industries has been increased by 33%. We have raised our concerns about this. We've said that with such a hike, how will new industrial establishments be set up?"

In response, BEZA Executive Chairman Chowdhury Ashik Mahmud Bin Harun said that the issue is under the jurisdiction of BERC, not within his authority. "Nevertheless, we have conveyed our concerns. We also emphasised the need for uninterrupted gas and electricity supply in economic zones," Aparup added.

In January, Ashik Mahmud informed journalists about a short-term priority plan to implement five economic zones within the next two years. 

These are the National Special Economic Zone (NSEZ) in Mirsarai, Chattogram; Srihatta Economic Zone; Jamalpur Economic Zone; Maheshkhali Economic Zone; and Japanese Economic Zone. It was stated at the time that BEZA aims to ensure water, gas, and electricity supply in these zones within the next two years.

Speaking on condition of anonymity, a business leader who attended the meeting, said, "BEZA is planning to provide utility services on a priority basis to government economic zones. However, there seems to be no such plan for private economic zones — we raised this issue. We want a roadmap to be developed for ensuring utility services such as gas and electricity for private economic zones as well."

For context, to boost domestic and foreign investment, the former government initiated the development of 100 economic zones across the country. The private sector also stepped forward in this regard. According to BEZA, 13 private economic zones have been approved so far. 

Among them, factories have been established and production is underway in at least eight private zones. However, many factories are unable to begin production due to gas and electricity shortages — despite investments worth thousands of crores of taka.

At a press conference last January, in response to a question on this issue, Ashik Mahmud said: "Private economic zones are important to us. When final approval is granted, there is a commitment made that gas and electricity will be delivered to the doorstep of the economic zone. That may not always be stated in writing, but the promise is made. However, BEZA will not take responsibility for delivering gas and electricity to private economic zones — instead, we will advocate with the relevant ministries and departments on their behalf."

Aparup Chowdhury further told TBS, "We stressed the need for establishing Water Treatment Plants (WTP) and Sewage Treatment Plants (STP) in the economic zones at the earliest. We also emphasised the importance of developing sustainable road networks and other communication infrastructure for the transportation of goods."

The BEZA Executive Chairman assured the investors that these matters would be looked into in collaboration with the concerned authorities.

Sources from the meeting revealed that gas prices for new industries have been raised by 33%. Investors expressed concern that this would create dual pricing in the country, leading to discrimination. 

They also pointed out that most of the five prioritised economic zones still lack full utility services. Meanwhile, investors who have received land allocations are being pressured to quickly set up their factories. Without providing necessary services, pressuring factory construction could hurt local businesses, potentially making them financially unstable.

Other topics discussed included the construction of approach roads, internal roads, drainage systems, housing, and labour transportation facilities in all economic zones.

The investors also called for a waiver of service charges from utility providers, making leased lands bankable, and calculating annual lease rentals only after the completion of all common facilities and utility services and handover of plots to unit investors. They further demanded a waiver of the 3% tax on payments made against LCs for polyester yarn.