Effective from 2002, the Government of India launched ‘Apparel Park for Exports’ scheme for imparting focused thrust for setting up of apparel manufacturing units of international standards at potential growth centres as part of which the State Government or an undertaking sponsored by the State Government (the designated agency) would provide land free of cost for establishing the park of sufficient size even as the location of the apparel park will be such that it is conducive to the establishment of state-of-the art manufacturing units in terms of its access to ports, airports, rail heads etc., while the designated agency will provide infrastructural facilities like power, water, roads (including approach roads to the park), sewerage and drainage, tele-communication and other facilities for the park while the park will have garment manufacturing units even if the park would especially aim at integrated units and would provide employment to at least 20,000 persons when fully operational while also allow to have ancillary units. Further, the Central Government will give as a grant 75 per cent of the capital expenditure incurred by the State Government on the infrastructural facilities of the Apparel Park, while the remaining 25 per cent will be borne by the agency even if the Central Government will also provide a sum up to Rs. 5 crore for setting up of an effluent treatment plant, crèche/s, any multi-purpose centres/halls for marketing /display etc.
From 2002 to 2021 is quite some time and, if reports are something to go by, most of the parks have not been a success and according to people in know of things, the reasons behind this are many.
To start with, most of these parks are located outside the cities and towns, such that their location adversely impacted their sustainability as the industry found it difficult to mobilise workers from outside, to add to which, was poor connectivity as lack of public transport and poor roads emerged as a major drawback with investors shying away as no ancillary units and services are available within.
Further, it is also said that land cost inside the parks were higher than those outside. Moreover, the small areas of the parks, was reportedly another reason for their failure and even financial issues also became a concern as parks are built on a Public-Private-Participation model.
All of these reportedly combined to lead to the failure of the Apparel Parks!
Now, one might wonder, what India’s apparel parks have to do with Bangladesh? Going by the recent reports that land allotment for the Garments Village – located at the Bangabandhu Sheikh Mujib Industrial City in Chittagong’s Mirsarai – was yet to be completed even after more than three years while many investors are also said to be staying away from the Garments Village, leads one to wonder if things are heading the way of India’s much-hyped Apparel Parks?
It may be mentioned here that the Bangladesh Export Processing Zones Authority or BEZA had made a deal with the Bangladesh Garments Manufacturers and Exporters Association (BGMEA) to create the Garments Village in March 2018 — BEZA allotted 500 acres of land to the BGMEA for setting up a well-planned RMG park after the association sought to relocate factories that were randomly established at different places in capital city Dhaka — even if reports suggest that so far 41 garment factories have leased only 239 acres of land in the 500-acre village while many in the industry suggest people are not interested to take plots inside the park as the infrastructure there is not fully developed yet, despite the village being dedicated to this particular export-oriented industry in the Bangladesh’s largest economic zone.
The Bangabandhu Sheikh Mujib Industrial City, being built on 30,000 acres of land in Mirsarai of Chittagong, is one of the largest economic zones in the subcontinent even if the Garments Village in the economic zone can reportedly provide employment opportunities to about five lakh people.
“…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,” reportedly underlined BGMEA President Faruque Hassan, adding, “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…”
Meanwhile, speaking to the media, Abdullah Al Mahmud Faruk, the Project Director at the Bangladesh Economic Zones Development Project under BEZA, reportedly maintained that the Garments Village is located beside the Mirsarai Economic Zone 2B and went on to state, “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,” adding, “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,” while BEZA Executive Chairman Shaikh Yusuf Harun, on his part reportedly 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. We still need time to prepare the whole Garments Village. BEZA will do everything required to help parties concerned set up factories on a priority basis.”
The BEZA further reportedly underlined that they were ready for plot transfer as the work on physical infrastructure of the Garments Village – including roads, gas, electricity and water supply lines – were almost finished even as sources within the BEZA, reportedly informed the media that an interested party needs to pay 25 per cent 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, reportedly maintained the sources, underlining that developed and undeveloped lands at the economic zone were available under a 50-year lease, while adding that the BGMEA was taking developed land only even if under the agreement, BEZA is responsible for developing the land, building utilities and access roads before handing over those plots even though the agreements do not mention a deadline for finishing land development.
Moreover, as per the deal with BEZA, BGMEA reportedly agreed to pay US $ 0.60 per square metres of the leased land annually even if BEZA sources reportedly stated the fee was US $ 1 per square metre of the land per year, as per sources who spoke to media even if some in the industry have blamed the Coronavirus pandemic along with other reasons for this delay in setting up factories at the Garments Village.
“Our plan to transfer factories to the Mirsarai Economic Zone has been delayed by two years due to the COVID-19 pandemic,” reportedly maintained BGMEA’s First Vice-President Syed Nazrul Islam, while adding, “To be ready, these plots need land fillings, effluent treatment plans, supply of gas and water, and many other utilities and facilities are needed to run factories properly. We are ready to shift our factories, but we cannot do this unless the necessary facilities are ensured there.”
Meanwhile, as per reports, a BGMEA team was supposed to visit the Garments Village and prepare a situation report even if Faruque Hassan said, “After getting that report, we will ask BEZA to handover the allotted lands to the owners from October this year,” even as he added that many of the BGMEA members have already paid for their land and they want to start work soon.
Forty-one factories have leased 239 acres of land in the Garments Village and under the agreement, the BGMEA members paid Taka 208.98 crore to the BEZA, reportedly claimed BGMEA Director Mohiuddin Rubel even as he maintained that more entrepreneurs have expressed interest in leasing land there and the garment makers’ body (BGMEA) has sent a letter to BEZA to ready the plots quickly, while reports suggest that the 41 apparel manufacturing companies that took land in the village are set to invest around US $ 1.5 billion thereby creating employment opportunity for three lakh people.
Going by the latest developments and how the BGMEA is taking up the matter in the right earnest with the concerned authorities while also doing all it can to speed up the whole process, give hopes, things might not go India’s apparel park hopefully. Let’s keep our fingers crossed!
