25,000 acres of land vacant in government economic zones

Despite the development of massive infrastructure for investment, the government's economic zones are not receiving the expected response. Out of approximately 39,000 acres of land in the government's five priority economic zones, only 27 industrial establishments have gone into production so far. Furthermore, only 37 percent of the allocated land is currently operational.

Infrastructure delays, shortages of uninterrupted gas and industrial water supply, additional service charges, double VAT (Value Added Tax), and administrative complexities have created a crisis of confidence among investors in the economic zones. As a result, entrepreneurs who have spent huge sums of money to acquire plots are unable to start factories, while uncertainty has also grown regarding new investments.

To resolve these issues, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Bangladesh Economic Zones Investors' Association (BEZIA) have decided to jointly present their policy demands at the government's highest level.

A high-level bilateral exchange meeting was held on Monday at the BGMEA complex in Uttara, Dhaka, to discuss the current situation in the economic zones. BEZIA's delegation was led by its President, M. A. Jabbar, while BGMEA was led by its President, Mahmud Hasan Khan.

Speaking at the meeting, BEZIA President M. A. Jabbar said that although many entrepreneurs have paid substantial sums for plots, they are suffering from a lack of confidence due to the failure to ensure necessary infrastructure and utility facilities. He noted that out of nearly 39,000 acres in the five public economic zones, only 27 establishments are currently in production, and only 37 percent of the allocated land is operational.

The five priority economic zones under BEZA are: Mirsarai National Special Economic Zone, Maheshkhali Economic Zone, Araihazar Japanese Economic Zone, Srihatta Economic Zone (Moulvibazar), Jamalpur Economic Zone

During the meeting, entrepreneurs said that even after establishing factories in the economic zones, uninterrupted gas and industrial water supplies are not guaranteed, disrupting production and increasing investment costs. Additionally, imposing service charges before factories become fully operational creates an extra financial burden on entrepreneurs.

In this context, the investors demanded a complete waiver of BEZA-imposed service charges on utility bills until the promised uninterrupted utility supply is ensured.

The meeting also raised the demand for sector-based cash incentives for zone-based industries to maintain parity with industries outside the economic zones. According to entrepreneurs, if investing in economic zones offers fewer benefits compared to similar establishments outside, attracting new investment will become difficult.

Furthermore, the issue of paying 15 percent VAT at both the master lease holder and subsequent sub-lease holder levels was highlighted, with a demand to stop this double taxation. Business leaders also demanded a complete waiver of VAT on lease tariffs.

In the case of export-oriented industries, administrative complexities have also been identified as a major barrier to investment. To mitigate extra time and complications in deemed exports for domestic bond-license-holding exporters, emphasis was placed on allowing deemed export activities to be conducted without EXPs (Export Permits) and EPs (Export Permissions).

The meeting also stressed the importance of making the mutation of 99-year leases bankable and effectively implementing a One-Stop Service (OSS). According to entrepreneurs, if land ownership and bank loan guarantees can be ensured along with rapid administrative services, the pace of investment in economic zones will accelerate.

During the meeting, BEZIA President M. A. Jabbar informed that there are 41 BGMEA investment units in the National Special Economic Zone located in Mirsarai, Chattogram. Despite such significant investment from the ready-made garment (RMG) sector, the full potential cannot be realized due to various infrastructural and policy-related problems.