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The Financial Express

Economic zones face delay as land dev in slow lane

| Updated: May 06, 2018 13:45:43


Representational illustration: An economic zone in Bangladesh Representational illustration: An economic zone in Bangladesh

Land development and the construction of embankment have emerged as the most challenging task, raising fear about missing deadlines for the country's major economic zones.

The problems pushed the builders of the economic zones into troubles because most sites are located on char, low-lying and hilly areas.

This situation requires strenuous efforts and also demand enough filing materials like sand to prepare the builders well for sitting of industrial units of different types.

Though utility service-providers in many sites could make some progress, the slow land development work in the zones put the agencies in tight spot.

The Financial Express correspondents got such an impression during recent visits to some of the most priority economic zones such as Mirsarai and Anawara in Chittagong, Sabrang Tourism Park and Naf Tourism Park in Teknaf and the proposed zones at Moheskhali in Cox's Bazar and Shreehatta at Sherpur in Moulovibazar.

The scarcity of filling materials and related equipment, incomplete approach roads in some zones as well as legal complexities over the land ownership were the hurdles that might result in missing the implementation deadline, the developers and local people told the FE correspondents.

Experts were also doubtful over implementing too many clusters in time due to the limited capacity of the state-run Bangladesh Economic Zones Authority (BEZA), the regulator.

Although some local and foreign investors have signed agreements with the BEZA to lease the land for 50 years from the investment-promoting agency, much time is required for the plots to be suitable for industrial structures.

Meanwhile, a few privately-owned economic zones are in operation on a limited scale.

The BEZA with a vision for becoming a world-class investment promoter is pushing ahead with building 100 zones across the country by 2030 to maximise benefits from fast-paced, modern industrial development.

Currently, the BEZA, which was formed in 2010 as an agency to establish zones, has made progress in six to seven zones including the Mirsarai zone.

The rest of the zones remain stuck in either land lease or acquisition process.

Of the zones, development activities at Mirsarai zone are visible.

The work on a 10 kilometre-long approach road connecting the site with the Dhaka-Chittagong highway, construction of administrative buildings, a power plant having capacity of 150 megawatts and part of the 18.6 kilometre-long embankment was in progress.

That said, the Mirsarai Integrated Industrial City has so far achieved less than 10 per cent of its development work that is now proceeding on 2,000 acres out of the planned 30,000 acres of land stretching from Mirsarai of Chittagong to Sonagazi of Feni.

Talking to the FE, BEZA assistant engineer Wahiduzzaman said that the authorities have been working hard to finish the land development work as quickly as possible.

The contractor is assigned to complete land filling of 880 acres of land in one and a half years, but only its one-third has been filled through dredging beginning from the middle of March.

Developers under the government and the World Bank funds are filling the land by marine sediments through dredging by pipes having diameter of 28-inch from the Sandwip channel.

Though the initial plan was to use three dredgers to expedite work, the contractor is using a single dredger due to the unavailability of required logistics like the 28-inch pipes.

The Mirsarai zone needs to construct a 20 kilometre-embankment to protect the land from erosion and only 700 metres are in progress, according to developers.

In case of Sabrang Tourism Park, which encompasses an area of 1,027 acres of land at Teknaf in Cox's Bazar, it is struggling to collect earthen materials required for its newly-built embankment.

Dird Group, a sub-contractor of Chittagong Dry Dock Limited, will have to construct over five-kilometre embankments with geo-textile but so far it has built less than one kilometre on the beach area, near Shahporir Dwip, a tourist attraction at Teknaf.

A crane of the developer was found carrying sands from the sea and many "Jhau" trees (tamarisk), which protect the beach, were seen uprooted.

SM Wahiduzzaman, executive director at the Dird Group, told the FE that they have been building embankment with geo-textile but the scarcity of sand to fill the low-lying area and the lack of approach roads badly affected the work.

"We're now bringing sands from the beach. Monsoon is also approaching, which is our serious concern. I think we'll not be able to carry out work in the rainy season," he said.

While land development at the Mongla zone was done but further progress was stalled because of a High Court ruling.

The similar situation is evident at the Naf Tourism Park at Jhaliardwip on the Naf River. The park is facing the shortage of sands to fill some 271 acres of the island.

This is considered as one of the potential sites because of its location on the Naf River and it proximity with the Saint Martin's Island. This is also a bordering area with Myanmar's Rakhhine state.

The developer, which collects sand from the Naf River, has already missed its February deadline.

"We don't get the expected level of sands, which is delaying our progress," site manager Chunnu Mian told the FE.

Anowara Economic Zone, a specialised zone exclusively for the Chinese investors, remains at its initial phase and the developer has completed some 100-meter approach road. The fencing encompassing the approach road is going on but the key task of levelling the hilly lands is yet to start.

This is a hilly area that nestles 33 kilometres off the Shah Amanat International Airport in Chittagong.

Local people said that since the law does not allow anyone to level hills, the authorities concerned are now in a quandary: Building industries on such high lands breaking the law or stopping development.

On the other hand, the Shreehatta zone is yet to erect fencing, let alone land development, due to legal complexities. This site is located mostly on the agricultural land.

Contacted, BEZA executive Chairman Paban Chowdhury said that the authorities have advanced with the zones despite complexities in various forms to make the planned industrialisation a reality.

"Yes, land development and embankment are key challenges for us. In some parts, we could not start development because of land shortage," he said. "But we're taking different measures to cope with that".

He didn't elaborate on the measures.

In some areas, the country should have gone for large-scale dredging, he added.

Talking about the developments at the Mirsarai zone, he said apparel makers had already paid Tk 1.0 billion out of Tk 5.0 billion to get 500 acres in the garment village inside the SEZ, while Asian Paints will start the construction work on 22 acres of land to set up its base there soon.

Mr. Chowdhury said that the authorities have planned to develop another eco-tourism park on 10,000 acres of land on Sonadia and Ghotivanga of Moheskhali islands and the work will start by this month (May).

The BEZA has so far received investment proposals worth about $17 billion, including $8.0 billion from overseas investors.

The investors submitted the proposals, paying 1.0 per cent of the proposed investment, according to the BEZA's regulations.

The BEZA also received around Tk 5.0 billion from about 80 investors in lease money, though it called the amount 'rent in advance'.

And until today, it spent Tk 3.95 billion on land and infrastructure development.

Formed in 2010 to facilitate the economic zones, the BEZA has been struggling to develop the land despite the provision for direct purchase method, which is considered to be the fastest procurement process.

Mahbubul Alam, president of the Chittagong Chamber of Commerce and Industry (CCCI), also said there were many challenges for building the on-site infrastructure.

"We must overcome the challenges," Mr. Alam, a member of the BEZA governing board, told the FE without elaborating.

Executive Director of the think-tank Policy Research Institute of Bangladesh Ahsan H Mansur told the FE that the BEZA will not achieve the desired success if it concentrates on too many projects. "It (BEZA) should prioritise some sites and put in all-out efforts to make these happen," he said.

Mr. Mansur, a former senior executive of the International Monetary Fund (IMF), said if the promoter had started the Mirsarai zone with 5,000 acres of land, then it would been able to build the industrial base there.

The capacity to carry out physical infrastructure development work is lower in Bangladesh than that of other countries, he said.

Even the country does not have adequate logistics required to develop the land, he added.

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