A Tk 37 billion green steel project, being constructed by Bashundhara Multi Steel Industries Limited (BMSIL) in the National Special Economic Zone in Mirsarai, Chattogram, is in disarray due to lack of utility and policy support.
The project, the biggest single unit steel factory of the country, was launched in 2021 to produce eco-friendly steel with low carbon emissions using the technology of Danieli's MIDA, the Italy-based global steel giant.
It was scheduled to start production by mid-2026 but as the authorities concerned fail to provide funding as pledged, meeting the deadline has become uncertain, officials alleged.
Bashundhara Multi Steel Industries Ltd. (BMSIL) has secured approval for 3 MMSCFD of natural gas from Karnaphuli Gas Distribution Company Ltd. (KGDCL), with a gas receiving station already established within the Bashundhara premises inside the National Special Economic Zone (NSEZ). Additionally, permissions for a 6 MLD raw water supply and 200MW of power have been granted by the Bangladesh Economic Zones Authority (BEZA) and the Bangladesh Rural Electrification Board (BREB), respectively.
However, despite initial commitments from BEZA, Bashundhara has had to bear significant installation costs for these utility services such as pipelines, substations, transmission towers etc. Concerns remain over whether the full supply of utilities will be available on time when the plant begins operations, raising uncertainty about the project's timeline and efficiency. The company has already spent Tk 2.52 billion on power transmission lines.
The 70-acre factory will be the first in Bangladesh to produce rebar coil and wire rod, replacing costly imports and saving $250 million in foreign currency annually, officials said adding that it will generate direct employment for 3000 people.
Narrating the funding problem Mohammad Mazedul Islam, head of project at BMSIL said that the project is co-financed by a syndicated loan of Tk 23.05 billion from eight banks.
But after disbursement of only Tk 5.4 billion, the banks suspended the loan disbursement citing regulatory restrictions, officials mentioned seeking intervention of central bank to remove the barriers.
And as the banks fail to release the necessary documents Tk 2.0 billion worth of raw material consignments are stuck at the port for which the company is under burden of demurrage charges amounting to Tk 970 million, an official added.
"On the financial side choking investments by refusing to disburse approved loans while protecting defaulting borrowers will give a negative signal to the good borrowers" he argued adding that the project cost is already up by Tk 10 billion to 47 billion due to surge in dollar prices and delay in commissioning will further increase the cost.
Asked whether the ongoing probe into the Bashundhara Group has resulted in the suspension of loan disbursement, the officials concerned said the BSMIL is a separate entity, and is run by separate management. It has no link with the Bashundhara Group management, they added.
© 2025 - All Rights with The Financial Express
