Chinese joint-venture company JLEPCL-DCL has been asked to complete the construction work of the central effluent treatment plant (CETP) at the Savar Tannery Estate in Bangladesh by June this year.
In a letter sent to the company and other related agencies, they have been warned that if construction is not finished by the deadline they will be held responsible for the failure of the entire project.
"The company said it would complete the work by June. Yet, we have issued the letter as a precautionary step. We don't want to extend the deadline anymore," Sirajul Haider, project director of Savar Tannery Estate, told the Financial Express.
The Savar Tannery Estate relocation project began more than ten years ago in an effort to save Dhaka's river and environment from effluent emitted from more than 200 tanneries at Hazaribagh on the bank of the Buriganga River.
The European Union, the major buyer of Bangladeshi leather and leather goods, threatened to stop buying products from the country if the manufacturers did not produce environmentally friendly and globally compliant goods.
Haider says that there are clauses in the agreement that detail, for example, penalties and cancellations of bank guarantees if the deadline is not met.
According to the deal, JLEPCL-DCL was scheduled to install the plant at the Savar Leather Industrial Park within 15 months at a cost of Tk4.8 billion (£41.2 million).
Around 90 tanneries, across a total of 155 plots on 200 acres of land, have started fully fledged work at the Savar Tannery Estate while six have yet to start the process of planning approval.
"Some tanners think they can delay like the previous years, but it will not happen this time," said Haider. "If anybody fails to relocate their tanneries by the deadline, the allocations will be cancelled outright."
The tanners and the government signed a memorandum of understanding (MoU) in October 2013 to ensure the relocation of Hazaribagh tanneries to the Savar Tannery Estate. According to the MoU, the government has decided to pay Tk2.5 billion (£21.5 million) as compensation to the tanners for relocation and it will give 80% of the total project cost. But the owners will have to pay the remaining 20% in instalments.
The estate authority has started paying compensation only to those who have started the work, while the other tanneries will receive money if they start the relocation process.