The government looks to set up a shipbuilding facility in partnership with foreign investors at the Payra seaport in Patuakhali with an investment of $1.58 billion to cut import dependence for vessels and market ships globally.

State-run Bangladesh Steel and Engineering Corporation (BSEC) under the industries ministry will provide land to Gentium Solutions, a Singapore and Australia-based company and Damen Shipyards Group, a Dutch company, to construct the shipyard, which will make merchant and passenger ships.

"If the project is implemented, it will be the highest-ever foreign direct investment (FDI) in Bangladesh," said the ministry in a press release.

In August 2018, Japan Tobacco International acquired local Akij Group's tobacco business for $1.47 billion, the single largest FDI in Bangladesh so far.

The disclosure comes after representatives from Gentium Solutions and Damen Shipyards Group presented a feasibility report for developing the shipbuilding and repair facility to the ministry where Industries Minister Nurul Majid Mahmud Humayun was present.

Gentium Solutions and Damen prepared the feasibility report after signing a memorandum of understanding (MOU) with BSEC in 2020.

The report found the prospect of shipbuilding in Bangladesh.

The country already makes vessels for local and foreign buyers thanks to the presence of nearly 200 small and large shipbuilding yards.

Annually, Bangladesh has a $1 billion local market for shipbuilding, said the report, adding that the global market for shipbuilding stood at $192 billion in 2019 with South Korea, China and Japan holding most of the market share.

"Bangladesh wants to be a shipbuilding nation. The government will provide land and all sorts of support to establish a world-class shipbuilding yard," said Nurul Majid Mahmud Humayun.

The ministry took the initiative based on Prime Minister Sheikh Hasina's announcement of establishing a shipyard at Payra in 2014.

Subsequently, the ministry took up a priority project, for which the government has earmarked 101 acres of land at the seaport. Later, the BSEC signed the MoU.

Md Kaikobad Hossain, adviser to Gentium Solutions, said the feasibility study was carried out by Ernst & Young, a multinational professional services provider with headquarters in London.

"We have submitted an investment proposal as we have found the prospect through the feasibility report," he said, adding that the BSEC would examine and analyse the proposal and give its opinion to the ministry.

"We will start negotiation once they invite us," added Hossain, a former secretary of the government.

Gentium Solutions and Damen Shipyards Group will make the investment. Damen plans to supply vessels to 17 nearby countries.

Contacted, BSEC Chairman Md Shahidul Hoque Bhuia said a huge amount of foreign investment would flow in for shipyard construction.

"We will start working on the technical issue by next week," he said, adding that the Bangladesh University of Engineering and Technology and the Islamic University of Technology will provide technical support to the BSEC to examine the feasibility report.

Damen Group Senior Director (naval projects) Eef van den Broek and Damen Group Asia Pacific Regional Sales Director Rabien Bahadoer were present at the programme at the ministry.