Investors in Bangabandhu Shilpa Nagar grapple with water crisis
Investors in the Bangabandhu Sheikh Mujib Shilpa Nagar (BSMSN) are not only facing an acute gas crisis, but also contending with virtually zero water supply to industrial units despite paying water bills, forcing them to set up their own water supply systems.
These utility service gaps at the BSMSN are delaying the realisation of actual investments, investors said. Over the past four years, just 4.15 percent, or $768 million, of total proposals amounting to $18.5 billion have been realised, with $80 million coming from foreign investors.
At present, the five manufacturing units operating inside the BSMSN have installed deep tube wells of their own accord, but they are finding it impossible to meet their demand for water using such means.
According to sources at Bangladesh Economic Zones Authority (Beza), the water demand in the BSMSN is projected at 103 crore litres per day.
The companies currently operating in the zone are Nippon Steel of Japan, Marico Bangladesh, Asian Paints Bangladesh, McDonald Steel, and Samuda Construction, a concern of TK Group.
The Beza expects a further 21 industrial units, which are currently under construction, to begin operations by March.
McDonald Steel, a manufacturer of galvanised and prefabricated steel, was one of the first units to begin commercial production at BSMSN in June 2021.
Its Managing Director Md Sarwar Kamal said Beza is responsible for providing all utility services inside the zone as per the agreement, but investors are struggling to ensure utility connections.
Even more astonishing is the fact that Beza is claiming water bills despite not providing any water, he added.
"We have installed a deep tube well for necessary water supply for our factory. But we have to pay bills to Beza for water use despite arranging it through our own efforts," he said.
Md Mustafizur Rahman, a director of TK Group, which invested $141 million to set up a man-made fibre plant in the BSMSN, echoed Kamal's sentiments.
He said they had also set up deep tube wells to meet their demand for water, which is around 90,000 cubic meters per month.
Yet, they have to pay around Tk 28 lakh per month in water bills to Beza.
"We set up deep tube wells but we still have to pay water bills to Beza. It is like we are inviting trouble," he said.
Beza is not providing a drop of water but is taking bills amounting to Tk 32 per cubic meter and VAT, he noted.
A leader of the Bangladesh Economic Zones Investors Association (BEZIA), on condition of anonymity, also alleged that Beza was collecting bills despite not supplying any water.
On June 19, 2019, Beza issued a circular saying no utility service charge or associated VAT would be imposed for industrial units.
Just one year later, it issued a letter to investors inside the country's economic zones informing them of the imposition of a 5 percent service charge on utility services, including water, electricity, and gas as well as for effluent treatment and waste recycling.
Shaikh Yusuf Harun, executive chairman of Beza, denied the allegations, saying they had been providing water to industrial units.
He added that 50 deep tube wells had been set up inside the BSMSN, which will provide the required supply of water until the completion of a water supply line from the Meghna river in 2027.
Curiously, Beza officials could not provide information about how much water they provide to industrial units inside the BSMSN.
Water availability was among the foremost initial concerns that investors voiced.
Consequently, Chattogram Water Supply and Sewerage Authority (Wasa) was given the responsibility to ensure a water supply system to the BSMSN in line with instructions from the prime minister.
Beza then decided to bring surface water from the Meghna river to the BSMSN.
In this regard, it took on a project at a cost of Tk 22,069 crore, including technical implementation and land acquisition.
It structured the project as a public-private partnership with Taeyoung Engineering and Construction Co, with the South Korean firm providing Tk 13,200 crore while the remaining Tk 8,869 crore was to be funded by the government.
AKM Fazlullah, managing director of Chattogram Wasa, said the feasibility study for the project had been completed and they were currently working on fixing the price of water and calculating the total requirement.
"We are hoping to start the implementation work in the next fiscal year and complete the first phase within December 2027," Fazlullah noted.
Work on the second phase will begin in January 2028 and is expected to be completed by December 2031, he added.
According to him, this project includes an intake point with a capacity of 50 crore litres, a water treatment plant with a capacity of 50 crore litres, two boosting stations, and the installation of a 132-km pipeline.
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