Garments village not ready in 3 yrs, many investors stay away

Land allotment for the Garments Village – located at the Bangabandhu Sheikh Mujib Industrial City in Chattogram's Mirsarai – is yet to be completed even after more than three years as factory owners are dissatisfied with the preparation of the Bangladesh Economic Zones Authority (BEZA).

BEZA had made a deal with the Bangladesh Garments Manufacturers and Exporters Association (BGMEA) to create the Garments Village in March 2018. But so far, 41 garment factories have leased only 239 acres of land in the 500-acre village.

BGMEA sources said factory owners are not willing to take plot allotments in the industrial park as the infrastructure there is not fully developed yet, despite the village being dedicated to this particular export-oriented industry in the country's largest economic zone.

Providing more details, BGMEA President Faruque Hassan said, "BEZA says the plots are ready. But in our opinion, they are not that ready for setting up factories. This is a very big project. If the infrastructure is not developed further, we may face problems in running factories. 

"To earn the confidence of the factory owners, more work should be carried out – the roads have to be ready, along with functional power lines and the gas lines. These things are not ready yet."

BEZA however says they are ready for plot transfer as the work on physical infrastructure of the Garments Village – including roads, gas, electricity and water supply lines – are almost finished.

BEZA Executive Chairman Shaikh Yusuf Harun recently said, "We have allotted a lot of land to the BGMEA. Forty-one entrepreneurs already have an agreement with us. We had told them to work on the plots besides the 120-foot road, but they are yet to do so.

"BEZA will do everything required to help parties concerned set up factories on a priority basis."

'More entrepreneurs are interested'

Speaking to The Business Standard, BGMEA Director Mohiuddin Rubel said, "Forty-one factories have leased 239 acres of land in the Garments Village. Under the agreement, the BGMEA members paid Tk208.98 crore to BEZA. 

"More entrepreneurs have expressed their interest in leasing land there. The BGMEA has sent a letter to BEZA to ready the plots quickly."

A BGMEA team is preparing to visit the Garments Village this month and prepare a situation report, sources have said.

The association's president Faruque Hasan said, "After getting that report, we will ask BEZA to handover the allotted lands to the owners from October this year. Many of our members have already paid for their land and they want to start work soon."

The Bangabandhu Sheikh Mujib Industrial City, being built on 30,000 acres of land in Mirsarai of Chattogram, is one of the largest economic zones in the subcontinent. 

The Garments Village in the economic zone can provide employment opportunities to about five lakh people.  The 41 RMG factories that took land in the village are set to invest $1.5 billion there. These companies will provide employment to three lakh people. 

What is the Garments Village?

BEZA allotted the 500 acres of land to the BGMEA for setting up a well-planned RMG factory park after the association sought to relocate factories that were randomly established at different places in Dhaka. 

The association has plans to invest $2 billion for setting up RMG and garment accessories factories in this park, BEZA sources said.

Commenting on the matter, Project Director at the Bangladesh Economic Zones Development Project under BEZA Abdullah Al Mahmud Faruk said, "The Garments Village is located beside the Mirsarai Economic Zone 2B.

"The plots are ready for whatever constructions the companies plan to carry out. We have already provided electricity supply to under-construction industrial factories located 3.5 kilometres away."

He continued, "We have taken up projects to provide electricity supply to all the factories that will be built in the zone. Projects have been launched under a World Bank initiative to build access roads, drainage systems, and a water pipeline network at Zone-2A And Zone-2B."

BEZA sources said an interested party needs to pay 25% of the fee to lease land at the Garment Village, and pay in full to take possession of the land. However, no plot has been handed over to the entrepreneurs as yet, because no one has paid the full fee till date. 

The authority is fully prepared to hand over the allotted land once the leasing fees are paid in full. Developed and undeveloped lands at the economic zone are available under a 50-year lease. 

The BGMEA is taking developed land only. Under the agreement, BEZA is responsible for developing the land, building utilities and access roads before handing over those plots. However, the agreements do not mention a deadline for finishing land development.

Moreover, as per the deal with BEZA, BGMEA agreed to pay $0.60 per square metres of the leased land annually. But BEZA sources now say the fee is $1 per square metre of the land per year. 

Other industries already building factories

Several companies, including Zhuzhou Jinyuan Chemical Co Ltd of China, Nippon of Japan, Asian Paints and Berger Paints of India have already started setting up factories in Bangabandhu Sheikh Mujib Industrial City.

BEZA officials say if these companies can start work, the owners of the garment factories should also be able to do so too. Because if RMG industry owners do not start work soon, it will take a long time to go into production, they added.

On the issue, BEZA's Executive Chairman Shaikh Yusuf Harun, said, "So far, 120 companies have signed agreements with BEZA to set up factories in Bangabandhu Industrial City. Some of them have already started working. 

"Thirteen companies will go into production in the middle of next year."

BEZA is working to establish 100 economic zones in the country by 2030. As part of this, several economic zones have already been established.

BGMEA on transferring factories

BGMEA's First Vice-President Syed Nazrul Islam said, "Our plan to transfer factories to the Mirsarai Economic Zone has been delayed by two years due to the Covid-19 pandemic. 

"To be ready, these plots need land fillings, effluent treatment plans (ETF), supply of gas and water, and many other utilities and facilities needed to run factories properly. We are ready to shift our factories, but we cannot do this unless the necessary facilities are ensured there."

Nazrul expressed optimism that BEZA authorities will ensure all utilities at the Garments Village in a speedy manner.

Echoing the same, BGMEA Vice-President Rakibul Alam Chowdhury said, "BEZA allotted 500 acres of land for garment factories, but the exact location is yet to be determined. There is currently no timeline for BEZA to complete the land development process.

"There is also no timeframe for ensuring the utilities we need in order to take possession of the land and start building factories. We have doubts about the RMG industry owners being able to shift the factories there within 2025."