As part of its long-running efforts to relocate leather processing factories from Dhaka’s Hazaribagh district to the leather industrial park of Savar, the Bangladeshi government has agreed to pay a compensation of Tk2.5 billion to 155 tanneries. A central effluent treatment plant (CETP) costing more than Tk8.28 billion will also be installed at the new site, according to ministry sources.

The migration of Savar’s tanneries has been on the cards since 2003 amid environmental concerns, but it has long been the subject of disagreement between authorities and industry over who should foot the bill. 20% of the CETP cost will be collected from the factories in 15 years at an interest of 5% annually. The rest will be considered as equity.

Following this latest breakthrough, it is hoped that things will move fast. "The project implementation will now be expedited following the government decision," said Bangladesh Small and Cottage Industries Corporation (BSCIC) director Dr Syed Umar Khyyam, speaking to the Dhaka Tribune.

BSCIC, the authority responsible for implementing the project, claims that the governmental industries ministry will now sign a memorandum of understanding with the Bangladesh Tanners Association and Bangladesh Finished Leather and Leather Goods Exporters Association. Also speaking in the Dhaka Tribune, a BSCIC senior official claimed that the European Union (EU) had imposed strict condition on the tanneries to build a CETPby 2014. "They must go for production under CEPT by 2014, otherwise they (EU) will not import any leather products from Bangladesh," he said.