The light engineering park in Munshiganj is almost ready, but entrepreneurs find it too costly to go for an investment. No one has come up yet to seek a plot allocation because of a "very high price" of land – each decimal costing Tk11.95 lakh.
Entrepreneurs say the land price that the authorities have fixed by including land acquisition and infrastructure development costs is much higher than usual rate.
The authorities have acquired land at three times higher than the mouza land rate of around Tk1.5 lakh per decimal.
It will not be possible for them to set up an industry if they do not get a plot at a reasonable price as per the existing mouza rate, the entrepreneurs add.
The government has taken up a project to develop the industrial enclave in Munshiganj, with a view to bringing electrical and light engineering product manufacturers, which have sprung up in an unplanned way across the country, under a single platform.
Work on the industrial park has so far made 83% progress. It will be possible to set up over 300 industries in the industrial park, which is expected to employ 1,650 people.
Starting in July 2016, the project at a cost of Tk280.57 crore was supposed to end in June 2019. But, it got extended to June 2022 owing to complexities in land acquisition and various other reasons. At the same time, the cost of the project escalated to Tk315.80 crore.
Still a year to go before the project work ends, but project director Abdul Jalil hopes work will be completed ahead of the stipulated time.
The Bangladesh Small and Cottage Industries Corporation (BSCIC) issued a circular, asking for an application for plot allotment in the industrial city in March this year.
But, no entrepreneur has submitted any application yet, rather, they are trying to negotiate with the government to reduce the land price.
Abdur Razzaque, proprietor of Sunrise Engineering and president of Bangladesh Engineering Shilpa Malik Samity, told The Business Standard, "In Munshiganj, each katha of land currently costs Tk3-4 lakh [one katha equals to 1.65 decimals]. Even if entrepreneurs bought the land themselves and filled it up, the price would be less than what was set by the BSCIC."
Besides, gas, electricity and other facilities in the industrial park have not been developed properly, he added
The 50-acre industrial park will be distributed equally for electrical goods and light engineering manufacturers.
The project director said, "Work on plot preparation and infrastructure development is running in full swing. The BSCIC has already sought an application for plot allotment but there is no response yet."
The BSCIC asked interested businesses to apply for a plot in the industrial park through their respective associations within 45 days.
The price of a plot has to be paid at a time or in 10 instalments in five years and 20% of the total price of the land has to be paid through a pay order.
The time limit for collecting an application form park has already expired.
Mohammad Abdullah, officer-in-charge of the Munshiganj district office, BSCIC, said, "The pandemic took a serious turn again after the circular had been issued. So far, 15-20 applications have been sold. But, no one has submitted the application form yet."
Hopes fading away
Entrepreneurs say their hopes centring the industrial city are fading away owing to the unusual land price.
The president of Bangladesh Engineering Shilpa Malik Samity said, "The entrepreneurs were very optimistic about the industrial city. They were waiting to go there as soon as possible. But the high plot price dashed their hopes."
According to the BSCIC, the price of each katha of land will be around Tk20 lakh. If someone wants to take 10 kathas of land, it will cost Tk2 crore. It is not possible to buy land at such a high price, he added.
"We wanted to move our industries from the capital to Munshiganj. The government has created the option. Now, the price of land is the only obstacle. The government has given a big subsidy to plots in Savar for tanneries. We need subsidies here too," Razzaque further said.
The BSCIC is considering reducing the land price in the industrial park after facing opposition from entrepreneurs.
The officer-in-charge of BSCIC Munshiganj said the government is thinking of reducing the price of plots. It has not been decided yet. If the price is reduced, the government will lose hundreds of crores of taka.
When the pandemic situation becomes normal, a new circular will be issued, he added.
There are more than 350 plots in this industrial park. If needed, an entrepreneur will be able to take more than one plot.
According to the Bangladesh Engineering Shilpa Malik Samity, there are more than 50,000 industries in the light engineering sector across the country. A large part of which does not produce products on a large scale. Only 10% or around 5,000 factories are directly involved in production on a large scale.
As per the authorities, only 200 industrial units could be set up in this industrial city.
Razzaque said that discussions on this project started in 2006, but it took shape in 2012. It was not finished in due time due to a slow pace of construction. Now, there is a new complication over the price of land.
"The industries ministry can reduce the land price by 25% if it wants. But even that will not help the entrepreneurs. We need a big subsidy from the government," he added.