Small industry estates see no development in 60 years

There are no street lights and no boundary walls. The area becomes a den of thugs as the evening deepens.

The drainage system does not work, and the half-century old water supply system cannot help if fire breaks out.

This is how industries are getting services they are paying for at the BSCIC industrial estate in Jashore.

Built on 50 acres of land at Jhumjhumpur in the suburbs, the Jashore industrial estate is the second biggest of such zones of Bangladesh Small and Cottage Industries Corporation (BSCIC). It houses 118 units, of which 115 are in operation, creating nearly 6,000 jobs and having produced goods worth Tk686 crore last year.

Charges for no service!

However, infrastructure and facilities remained almost the same as they were in 1962, the year the estate was developed. "We pay them service charges, but get nothing in exchange," says Shyamol Das, a food industry owner at the estate.

The service charge was Tk500 per acre in 1962, which is now Tk1.32 lakh in BSCIC estate in Rajshahi city. "But we have to look to the drainage ourselves," says Jahidul Hossain, human resources officer at a pharmaceutical company.

Visits to industrial estates confirm the findings of a BIDS report, which reveals why BSCIC estates are lying vacant and the number of units turning sick has been on the rise there.

There is a silver lining too. Potential investors in Bogura are putting pressure on BSCIC officials to expand the existing estate where no plot is left vacant. Sazzadur Rahman, an entrepreneur, said he is waiting for a plot to invest Tk300 crore in a tiles factory.

Although scarcity of land has been identified as one of the major barriers to industrialisation, about 2,800 plots are not being utilised in 72 BSCIC industrial estates.

About 22 percent of the plots allotted by BSCIC are unutilised whereas the rate rises by up to 27 percent against a total of 10,389, including unallocated plots, according to the study conducted by Bangladesh Institute of Development Studies (BIDS) recently.

The report says poor enforceability of rules and regulations, flawed entrepreneur selection for plots, and infrastructural bottlenecks are to be held responsible for the situation.

Owing to political interference, 68.29 percent of plots were allotted to those who are not true entrepreneurs or did not have the intention to utilise the plots for establishing any industry. And 34.15 percent plots were allotted in exchange of bribes.

This has thrown up various problems, such as inefficiency in production. In consequence, there has been a rise in the number of sick industries at a rate of 4 percent per year in the BSCIC estates.

The BIDS study focused on an enterprise survey of 500 firms, a census of all industrial estates.

Claiming that no plot is vacant in the industrial estates set up earlier, BSCIC Chairman Md Mostaque Hasan told The Business Standard that a large number of industries had become ill because of various crises.

He also said BSCIC is unable to cancel allocations of plots of non-operative entrepreneurs due to the loans they have taken from banks in favour of industries in the estates.

BSCIC has meanwhile written to the banks concerned to arrange auctions for a cancellation of the plots of sick industries and allocate them to real entrepreneurs for 99 years, said the chairman.

As noted in the report, only 57 percent of the estates have gas supply connections, with about 80 percent of the estates having water supply facilities.

Most industry owners and employees have expressed their dissatisfaction over the situation of roads, boundary walls, drainage system and street lights inside the BSCIC estates.

The BIDS identified most of the estates having serious problems of water-logging owing to poor maintenance of the existing drainage system.

None of the BSCIC estates has a boundary wall, which is a major concern for the industry owners and employees, as it is required in order to protect their valuable goods.

Complaints about poor maintenance of the infrastructure inside the estates are common.

The BIDS report notes that environmental concerns are not well addressed in the BSCIC estates, with about two-thirds of the firms discharging solid waste into the estate and a similar number of firms releasing liquid waste into nearby rivers or canals.

In about 37 estates effluent treatment plants (ETPs) have been established by individual enterprises. Only one estate has a central effluent treatment plant (CETP).

According to the report, about 300 firms change ownership every year and about 160 firms change trade every year due to a series of limitations, mainly on account of concerns regarding business viability.

The report, titled "An Evaluation of BSCIC Industrial Estates" and conducted under the leadership of Monzur Hossain, said the BSCIC estate production has been growing at a rate of 10 percent annually, employing about 5.6 lakh people.

The estates opened a window of opportunity for more than 5,000 enterprises to reap benefits from local wage labourers, raw materials and local niche markets.

Various backward and forward linkage industries, markets and growth centres, shops, educational institutions, health clinics and drug stores, etc were developed after the establishment of the estate.

The BIDS report has recommended that BSCIC should review the constraints behind the non-utilisation of plots and follow it up by action to enhance the existing plot utilisation rate.

It also suggested that adequate gas supply and uninterrupted electricity be ensured for every estate.

Jashore correspondent, Rajshahi correspondent Bulbul Habib and Bogura correspondent Hasibur Rahman Bilu contributed to this report.