11 tanners asked to show cause on relocation failure

The Savar Tannery Estate has summoned owners of 11 tanneries to appear at its office on Sunday to show cause as to why they have failed to start relocation work in Savar from the city's Hazaribagh. "We will hear them but if we find any willful excuse behind failure of relocation, their allotment will be cancelled," Project Director of the Savar Tannery Estate Sirajul Haider told The FE on Friday.
However, he did not disclose the names of the tanneries asked to appear for hearing.
According to the Estate officials, 152 tanneries got their layout plan approved to date and of these, 11 have not yet started work despite getting plots and plans approved.
A total of 155 tannery owners got plots at the Savar Estate but three of them did not submit any plan to the authority.
On November 12, Industries Minister Amir Hossain Amu gave an order to issue legal notice to the tannery owners of Hazaribagh for relocating their industrial units within the stipulated time.
Last year, the Industries Ministry allocated plots on the 200-acre leather estate in Savar to 155 tannery owners through the BSCIC, a wing of the Industries Ministry which is implementing the project.
Meanwhile, though many tanneries have started their construction work, the progress is at a very slow pace.
The Estate officials said only 15-20 tanners started construction at full pace. The rest have started work only to protect their plot allocations.
Some tanners apprehended it would not be possible to relocate all the factories by next year. It will take at least two more years.
"We are trying our best to comply with the ministry's given time and relocate factories, but money is a big constraint," said Bangladesh Finished Leather, Leathergoods and Footwear Exporters' Association (BFLLFEA) President Mohammad Abu Taher.
Though Abu Taher is hopeful about relocation, Bangladesh Tannery Association (BTA) Secretary Belal Ahmed said relocation will take more time.
Mr Belal Ahmed said the relocation process will be done phase by phase. First, the well-off factories would shift, and then comparatively smaller factories would follow.
Early last month, the Bangladesh Bank (BB) announced an incentive package for tanners to help them move the hazardous factories to Savar.
According to the BB notice, tanneries, which have already moved to Savar from the toxic tannery hub of Hazaribagh or are under process to do so, will get an opportunity to transfer their irregular loans into block accounts and will have eight years for repayment, with a one-year grace period.
Tanners will be charged 10 per cent interest on the loans in the block accounts or banks' cost of fund or whichever is lower.
The BB also allowed the banks to consider relaxation of the existing down payment while rescheduling old loans or awarding new loans for tanneries involved in exports.
However, fresh collateral has to be ensured in getting new loans if there is any deficit in security money.
Tanners will be able to free their property used as collateral in previous loans if they can show equal collateral. To take the incentives, tanners will have to begin the process of relocation within the next six months, the BB notice said.
The central bank directive is also in line with the demands of the tannery owners.
However, Mr Taher alleged some of the banks are not showing any interest to give loans to tanners despite the central bank's directive.
"Some tannery owners contacted the banks which showed negative attitude," he said.
The leather industry fetched $1.29 billion from exports in the last fiscal year, crossing the one-billion-dollar mark for the first time, according to the Export Promotion Bureau.
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