The government will not provide electricity and gas supply to new factories if they are set up in any other places except in government-designated economic zones or industrial enclaves.

The cabinet committee on economic affairs took the decision at a meeting on March 21. The Bangladesh Bank issued a circular to this effect yesterday.

The central bank also directed banks to ensure mandatory clearance certificates from utility service providers before approving loans.

In 2020, the energy and mineral resources ministry issued a circular to stop providing new gas connections to industries outside economic zones and industrial parks from April 2021. However, the government did not implement the decision strictly in the last three years.

Yesterday, the BB said planned industrialisation is important to ensure economic prosperity.

"Establishing industries at specific locations will ensure proper land and energy management as well as environmental development."

Mahbubul Alam, president of the Federation of Bangladesh Chambers of Commerce and Industry, said the decision was taken to encourage investors to set up new factories at economic zones and industrial estates.

"Besides, the government has decided to stop the construction of industrial establishments on agricultural land."

The decision should, however, not be applicable to those who have already set up factories outside government-designated industrial zones, according to the top business leader.

"This is because if the rule is applied to those who already established industries outside government-designated industrial zones and are waiting for utility connections to go into operation, they will face financial trouble. Such situations are not acceptable."

Mohammed Amirul Haque, managing director of Premier Cement Mill, said the Bangladesh Economic Zones Authority is yet to ensure utility services in the economic zones.

"Why should investors then invest there?"

He said there are a number of investors who have set up factories outside of the economic zones and industrial zones and they might have devised their plans 10 years ago.

"What will those investors do now if the government does not extend the utility connections?"

Selim Raihan, executive director of the South Asian Network on Economic Modeling, hailed the decision.

"This will help establish industries only in economic zones in a more planned way."

However, he pointed out that getting permission for electricity and gas connections needs to be hassle-free and quicker.

"Otherwise, industrialists and entrepreneurs will not feel motivated to set up factories in the economic zones."