Bangabandhu Sheikh Mujib Shilpanagar
by PANKAJ DASTIDER
Bangladesh is offering a liberal FDI regime in South Asia and establishing attractive investment facilities in 100 economic zones on 30,000 hectares of land featuring one-stop services and competitive incentive packages. With Mirsarai Economic Zone opening up soon, the author highlights Bangladesh as the next most attractive FDI destination in the region.
Ceaseless works are going on in the factory site of Bangladesh Auto Industries Ltd. The industry is likely to jolt production by the end of 2021. Manufacturers of electrical cars, the first of its kind in Bangladesh, have set up the industry in the Bangabandhu Sheikh Mujib Shilpanagar of the Mirsarai Economic Zone. They are eagerly waiting to hit the local electric car market with their Bangladeshi brands. A Chattogram-based Bangladeshi manufacturing enterprise has joined hands with a top-ranking Chinese car manufacturer DongFeng Motor Group Ltd. They have joint ventures of car manufacturing with Japanese Honda, Nissan brands and France-based car manufacturers. Bangladesh Auto Industries Ltd. has targeted to invest Taka 1000 crore in the electric car manufacturing plant, set up on 100 acres of land in Bangabandhu Sheikh Mujib Shilpanagar (BSMS). On the same land, they have separate factories for producing car parts and batteries in a joint venture with two other companies based in Hong Kong and China. Physical works of the company have almost been completed and installation of machinery is also underway. Bangladesh Auto Industries Ltd. (BAIL) expects to manufacture private electric cars, three-wheelers and electric motorcycles, it is learnt.
Not only in the BAIL but 10 other companies in the Bangabandhu Sheikh Mujib Shilpanagar have almost completed their construction works and are likely to hit the market with their products by the end of this calendar year or in the first quarter of 2022. Some of these companies are Asian Paint from India, Berger Paint from the UK, Modern Syntax, Nippon Steel from Japan, Bashundhara Chemical, Bashundhara Steel and SQ Electrical. Bangladesh Export Processing Zones Authority (BEPZA) on May 30 this year, signed a development agreement with the Bangladesh Economic Zones Authority (BEZA) to establish a ‘BEPZA Economic Zone’ in the BSMS. Under the agreement, the BEZA authority has leased out 1150 acres of land to BEPZA in the Shilpanagar. The BEPZA authority hopes it will attract $ 4.5 billion investment, create 5,00,000 jobs and host 350 to 400 industrial units.
The development of Bangabandhu Sheikh Mujib Shilpanagar in the Mirsarai Economic Zone, going in a procession with the Dhaka-Chattagram Highway, Mirsarai-Cox’s Bazar Marine Drive, Bangabandhu Sheikh Mujibur Rahman Tunnel under the Karnaphuli river, Bay Terminal, Dhaka-Chattogram-Cox’s Bazar Railway and the Sitakunda Container Terminal, dedicated to serving the Mirsarai Economic Zone, is likely to shift the Chattogram port’s export-import lifeline to Mirsarai. The Mirsarai EZ site is located at the end of the eastern side of the Bay of Bengal, surrounded by the coast and Mirsarai town. Mirsarai EZ area is one of the most suitable large sites in the country along the strategic Dhaka-Chattagram industrial corridor. Mostly because of its strategic location, it has the potential to contribute to the economic development of the country by attracting foreign direct investment (FDI) and domestic investment (DI). The Mirsarai EZ is only 10 kilometres (km.) west of the national highway (Dhaka-Chattagram Highway) and 11.5 km. west of the nearby railway station, with Chattogram City 60 km. south. The Mirsarai Economic Zone is an exceptionally large-scale development area of this sort in Bangladesh. The features of the vastness of the land can be better utilized to host industries that require a wide range of supporting sectors and which operate through extensive industrial linkages. Experts have opined that the automobile industry is an industry for the future of Bangladesh because it will bring fundamental changes into the industrial structure of Bangladesh – destined to become a middle-income country. Sectors like garment manufacturing, chemical, steel, food processing, textile, polymer, automobile, paints, healthcare services, power plant, shoe industry, electrical goods etc. have already started construction works and installation of factories in the Bangabandhu Sheikh Mujib Shilpanagar, said Md. Amzad Hossain, assistant manager of the BSMS in Mirsarai. He said that 6,000 acres of land have already been leased out to 150 local, foreign and joint-venture investors, who have made investment proposals worth $ 20,000 million equivalent to about BD Taka 1,70,000 crores. As many as 7.5 lakh people will work directly or indirectly in these factories. 11 factories are expected to go for commercial production in the Shilpanagar by the end of 2021 or the beginning of 2022, he said.
On the coast of the Bangabandhu Shilpanagar, a new seaport and industrial park will be built by Bangladesh and Japan industrial alliance. BEZA has leased out 1,000 acres of land to the alliance. Energypac of Bangladesh and Sajitz Corporation of Japan and the Japan Development Institute jointly formed the consortium called Bangladesh and Japan Industrial Alliance which will build a new seaport and industrial park in the Sheikh Mujib Industrial City. The container port will be constructed under the private initiative to transport raw materials and goods through the sea and riverways, covering 25 km. of the coastline through the Sandwip channel of the Bay of Bengal. Larger ships, which cannot dock in the Chattogram port jetties, will be able to enter the new port. The products produced in the Shilpanagar will not need to depend on the Chattogram port for export/commercial activities. Japan Industrial Cooperation Agency (JICA) and International Finance Corporation (IFC) are funding the project. Sajitz Corporation, the Japanese company in the consortium along with local company Energypac, is one of the biggest companies in Japan. Sajitz Corporation has developed and is operating Indonesia’s 7,500 acres area Deltanass City & Industrial Park, Long Duck Industrial Park on 667 acres of land in Vietnam, Motherson Industrial Park on 284 acres of land in India and many other industrial parks across the world. BEZA sources said the Shilpanagar will be fully operational by 2025 while the port will be partly operational by 2024 and fully operational by 2030. As many as 14 ships will anchor at a time in the port. Ships with a maximum 9.20 metres draft can enter the Chattogram port. But the ships with 11 metres draft will be able to dock in the new port through 50 km. long Sandwip channel. Both the port area and Sandwip channel will need to undergo regular dredging to maintain the depth of the channel. BEZA sources said that the Shilpanagar is being developed on about 30,000 acres of land in Sitakunda & Mirsarai upazilas of Chattogram and Sonagazi upazila of Feni. Investment worth US Dollar 23 billion has already been confirmed. Apart from the earlier mentioned investors, there are investors like Wilmer of Singapore and local industrial groups like Walton, Summit group, PHP family, TK group, GPH ispat and many other well-known local investors. A statement released on 17 April 2021 said that the World Bank (WB) is providing $ 500 million as loan in financial assistance to Mirsarai EZ through the Private Investment and Digital Entrepreneurship (PRIDE) project, the lion’s share of which ($ 467.50 million, 93.40 percent) is provided to transform Bangabandhu Sheikh Mujib Shilpanagar as a modern multimodal city. The World Bank and Bangladesh Economic Zones Authority signed a project agreement on 13 April 2021. Mercy Tembon, Country Director of the World Bank in Bangladesh and Paban Chowdhury, Executive Chairman of BEZA signed the agreement. The total cost of the project has been estimated at Tk. 4,347 crores of which the World Bank loan is Tk. 3,096.48 crore and GoB funding is Tk. 369.64 crore.
BEZA aims to create a conducive environment for private investment through infrastructure development at Zone-2A and 2B of Bangabandhu Sheikh Mujib Shilpanagar and other surrounding zones to demonstrate the benefits of sustainability and the use of environmental tolerance policies by establishing Bangabandhu Sheikh Mujib Shilpanagar as an eco-friendly green economic zone and to create new employment opportunities by attracting investment at the Shilpanagar. Under the project, a total of 30 km. long roads and connecting roads will be constructed at Zone-2A & Zone-2B and around. 31 km. Drainage Network has been proposed in the project for stormwater drainage and about 990 acres of land have been proposed to be developed to make it suitable for investment and industrial growth. Rooftop and floating solar system will be established. To meet the water demand, a 30 MLD (million litre per day) capacity desalination plant and 12.14-kilometre-long Stream Network will be set up under the project.
Bay Terminal: Finally, the much-hyped Bay Terminal is going to happen as the government decided to offer construction and operation of two terminals to Dubai Port (DP) World of the United Arab Emirates and PSA Singapore. Of the planned three terminals two will be constructed by these two foreign ports operators and the rest will be constructed and operated by Chattogram Port Authority (CPA). This is the first time that two foreign port operators have been handed responsibilities of port terminal construction and operation, considering their expertise, innovativeness and technological advancement. The Bay Terminal issue was discussed first in the 30-year Strategic Master Plan of Bangladesh in 2013 to enhance the handling capacity of the Chattogram Port. The businesses have been alleging for a long time against the long delay in cargo loading and unloading at Chattogram Port and the inland container depots (ICDs) stating that their activities are far from the minimum expectation. They have always raised voices against unusual delays in unloading containerized cargo and long delays of vessels waiting at the outer anchorage to get berths in the port, which causes huge losses to their business. The foreign port authorities have signed agreements with the PPP (public-private partnership) Authority of the government. The Bay Terminal, once commissioned, will reduce shipment charges in export-import activities by about 30 percent. At the same time, the turn-around time and the FOC (fixed operating cost) will come down considerably. The terminals will be constructed on 870 acres of land opposite the Chattogram Export Processing Zone (CEPZ) at Halishahar-Patenga coastline. It would allow larger ships that cannot enter the Chattogram port. Now ships with 9.2 metres draft and a maximum length of 190 metres can berth at a jetty during high tide at an average of four hours a day. In the proposed Bay Terminal, ships with drafts of about 12 metres and a length of 285 metres will be able to anchor. As many as 35 ships will be able to berth in the Bay Terminal at a time and will be able to handle an additional 50 lakh TEUs (twenty feet equivalent unit) of the container.
Bangabandhu Tunnel: Construction works in the Bangabandhu Sheikh Mujibur Rahman Tunnel under the river Karnaphuli is considered as the new industrial corridor of the country. Construction works of the tunnel are nearing completion and the progress of the Tk.10,374 crore project now stands at 70 percent. Authorities hope the tunnel will be opened for traffic by the end of 2022. Works of the two-lane first tube from Patenga Naval Academy area in the city end have been completed. Works of the two-lane second tube from Anwara end on the other bank of the river started in December 2020. The length of the main tunnel is 3.32 km. while it will have 5.35 km. approach roads on both sides plus a 727-metre-long over-bridge. During the visit of Prime Minister Sheikh Hasina to China in June 2014 the Bridges Authority of Bangladesh and China Communication Construction Co. Ltd. (CCCCL) signed an agreement to construct the tunnel. Bangabandhu Tunnel, the first underwater road network in South Asia, will play a great role in the future economic activities of Bangladesh as it will be connected to both Bangabandhu Shilpanagar in the north and Matarbari Deep Seaport in the south. After the commissioning of the tunnel, the south Chattogram will see robust industrial growth in five years and reduce huge traffic congestion on the Chattogram-Cox’s Bazar highway and other internal road networks.
Contacted, Chattogram Chamber of Commerce and Industry president Mahbubul Alam said the Bangabandhu Shilpanagar investors may face water scarcity because a huge quantity of water will be required for running industries and dormitories in the zone. Utility services including water, gas and electricity must be ensured, he said, adding that internal infrastructures and roads should be developed to facilitate smooth functioning of the factories there. Furthermore, the Shilpanagar must be connected with the CEPZ, Chattogram Port, Chattogram Airport and the Mirsarai-Cox’s Bazar Marine Drive. Mahbub said a new port should also be developed right in the Mirsarai Economic Zone to ensure smooth export-import activities.
Pankaj Dastider is a senior journalist who contributes to Colors from Chattogram
