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The country's readymade garment (RMG) sector has urged the government to intervene to ensure prompt settlement and payment of insurance claims following the devastating fire at the import cargo village of Hazrat Shahjalal International Airport (HSIA).
In a recent letter to the Financial Institutions Division (FID) under the Ministry of Finance, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) said a significant quantity of imported raw materials belonging to garment factories was burnt to ashes in the October 18 blaze.
The industry group said the affected factories have suffered major financial losses, with their ongoing export orders now at risk -- orders whose value is many times higher than the burnt imported goods.
The BGMEA requested the FID to immediately instruct insurance companies to expedite the settlement of submitted claims and release the funds necessary for factories to complete their pending export shipments.
It noted that due to the destruction of imported goods, factories must now re-import materials to finish the orders, but foreign buyers are withholding acceptance of shipments until those orders are fulfilled.
"Timely disbursement of insurance claims is crucial to help affected RMG units recover from the crisis and pay wages and allowances to workers on time," the BGMEA stated.
Contacted, a senior official of the Financial Institutions Division said, "We have received an application from the BGMEA and are working on the issue. We have already instructed the concerned regulator, IDRA, to take necessary action."
Industry insiders said affected factories urgently need to re-import raw materials to meet delivery deadlines. As foreign buyers hold back payments until shipments are completed, the companies are facing an acute shortage of working capital.
Insurance officials, meanwhile, have indicated that assessing damages, verifying coverage, and processing claims could take at least one to one-and-a-half months -- even without the complications of the "Air Risk Only" clause in many policies.
The fire at HSIA's import cargo village has caused immediate losses exceeding US$8.0 million to the country's textile and garment sector. The government has launched a full investigation into the incident and has sought assistance from international experts.
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