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The government is likely to reconsider the cost share of tanners to construct a CETP (common effluent treatment plant) at Savar, officials said.
The development came following repeated requests from tanners at Savar Leather Industrial Park.
Finance Minister AMA Muhith recently asked the finance secretary, Abdur Rouf Talukder, to give him an appropriate rundown of the CETP building cost.
"We may need to change our decision in this case," he asked the secretary.
Under the present policy, the tanners at the estate will have to provide Tk 4.65 billion to the government as their share to set up the facility.
However, factory owners now say otherwise.
They are unable to pay their share for incurring losses due to a fall in prices of and demand for leather and leather goods in the global market.
Rather, they have demanded the government build the CETP with its own resources.
In December 2016, the finance ministry made it clear to industries ministry that the cost would not be borne from state exchequers.
Since then, tanners have only been paying the Bangladesh Small and Cottage Industries Corporation (BSCIC) the cost of industrial plots by instalment.
To this end, sources said, industries minister Amir Hossain Amu sat in a meeting recently.
It decided that the BSCIC will continue to charge tanners the CETP building cost until finance ministry agrees to provide the full cost as grant.
The meeting also decided to send a demi-official letter to Mr Muhith with a plea to waive the tanners' share of the construction cost.
When asked, Bangladesh Tanners Association (BTA) chairman Shaheen Ahamed on Sunday said owners faced a big financial loss while shifting to Savar from Hazaribagh.
Exports of crust leather and leather goods also fell drastically in last fiscal year (FY) for buyers' less interest for compliance issues, he told the FE.
The government initially pledged to set up the CETP from the state coffers to lure tanners to shift to Savar, Mr Ahamed mentioned.
He said, "After we moved to Savar, the government has been asking us to provide the CETP construction cost which is not possible for us."
According to commerce ministry officials, the CETP runs only in daytime now instead of 24 hours.
Besides, it can only treat liquid wastes but fails to treat solid wastes. So, solid wastes make stockpile near the factories.
In FY 2017-18, the overall exports from leather sector fell by 12 per cent.
Export of leather by 21 per cent and export of leather products by 27 per cent compared to FY '17.
The export earnings from the sector stood at $1.08 billion in FY '18 against $1.23 in FY '17, the data available with the Export Promotion Bureau shows.
Commerce ministry recently formed a 13-member committee, led by commerce secretary Shubhashish Bose, to look into the reasons behind this drop in exports and suggest a way out.