Bangladesh: Relocation proposal doubles in price

1 September 2013

The Bangladesh government is set to approve the second revised proposal for relocating tanneries from the capital's Hazaribagh district to Savar, increasing the original project cost by 98%.

But the relocation of 155 tanneries still remains uncertain as the tanners are yet to sign contracts with the government, pending conditions on plot allocation fees.

At the time of writing, the Tk1078.71 crore proposal was still to be placed before the executive committee of the National Economic Council (Ecnec) for approval. The committee endorsed the first revised project proposal worth Tk545.36 crore in October 2007. The scheme was originally approved in 2003 with an approximate cost of Tk175.75 crore.

The tenure of the scheme ended last year and the government now plans to extend the deadline up to June 2016.

The spiraling costs are mostly accounted for by commitment of Tk250 crore compensation to the tanners for the relocation and Tk477.46 crore more for setting up the Central Effluent Treatment Plant (CETP) and a dumping yard.

The planning ministry made the move following severe criticism from Prime Minister Sheikh Hasina in the last Ecnec meeting on July 31 over the length of time it has taken to implement the scheme.

The draft proposal has recommended charging higher relocation fees from the factory owners, which has been met with serious resistance.

"As per the proposal, we [owners] have to pay at Tk376.15 per square feet now for the allotted plots ranging from 10,000 to 32,0000 square feet in Savar. Earlier, the fee was fixed at Tk197 per sq ft," Belal Hossain, Chairman of Bangladesh Finished Leather, Leather Goods and Footwear Exporters' Association, told local media.

"This is not acceptable as the higher charges will increase our relocation costs significantly," he continued. About 21,600 cubic metres of environmentally hazardous toxic waste, including chromium, sulphur and ammonium, is emitted daily from the tanneries, according to the Department of Environment.

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