RMG makers unwilling to pay for plots in garment village

Monira Munni | Published: March 09, 2014 00:00:00 | Updated: November 30, 2026 06:01:00

The government's move to establish a garment palli (village) now hangs in the balance as manufacturers are not willing to bear the cost for acquisition of the required lands for the project, sources said.
According to them, about Tk 8.0 billion is required for acquiring nearly 500 acres of land for the proposed garment industrial park at Bausia in Munshiganj.
Readymade garment (RMG) manufacturers, however, have expressed their inability to pay such a huge amount of money as they are facing some challenges. The challenges include uncertainty over requirement of funds for remediation or retrofitting purposes against the backdrop of the ongoing factory inspection programme.
"It is difficult for the entrepreneurs to bear the huge land acquisition cost for the proposed garment palli," Md Shahidullah Azim, vice president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) told the FE.
Negotiations are on with a Chinese firm that has already shown its interest to invest Tk 14 billion for the purpose, he said. But to get the fund, sovereign guarantee is a must, he pointed out.
Earlier, the BGMEA has sought guarantee from the government, but the issue is yet to be resolved, sources said.
"If we get the fund, we can develop the palli," Mr Azim said. Md Hatem, Acting President of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) said the non-compliant factories would be required to relocate their factories following the assessment programmes by the Accord, the Alliance and the government.
"If they have the ability, they will shift before," he said adding the government should come forward with the required fund for the acquisition of the land and the owners will gradually repay the loan through instalments.
He said, not only one but also many other such zones need to be developed as a large number of factories will have to be relocated. He expressed his frustration over development of only one such park since last six years.
The demand for a separate garment palli for relocation of rented and vulnerable garment units has become strong among the manufacturers after the country's worst-ever industrial blaze at Tazreen. Later, the Rana Plaza collapse, which claimed more than 1,100 lives of workers, highlighted the need for speedy relocation.
The one-after-another tragic incidents drew extensive local and global attention and the global buyers asked for health, fire safety and other compliant issues.
Buyers' demand for proper working environment with Bangladesh emerging as the second largest RMG exporter after China and the surging export demand also forced the government to think about the garment village.
The government has finally allocated about 500 acres of land for the garment palli at Bausia. The Prime Minister also gave directives to all concerned to implement the project on a priority basis.
The BGMEA and the BKMEA were asked to pay by February last the amount which is about Tk 7.77 billion. Both the associations' leaders confirmed that they have sought time extension in this regard from the authority concerned.
In June last, the BGMEA and the BKMEA invited expression of interest from the apparel makers to know about their willingness in shifting factories to the palli. They got applications for allocating plots on 2,200 bighas of land while the capacity of the palli is 577 plots totalling 1,100 bighas.
Both the apparel apex bodies are to prepare a guideline for allocating plots. Accordingly, a garment factory that annually exports more than $12 million needs to pay 40 per cent of the total price of plot as down payment with three years of repayment period. Manufacturing units with annual exports less than $12 million have to pay 20 per cent of the plot's price with a repayment time of four years.
The garment industrial park will have plots with infrastructural facilities, utility services, medical facilities, central effluent treatment plants, day-care centres, roads, drainage facilities, waste-dumping yards, fire-fighting equipments, banks, insurance offices and information technology parks, according to sources.