Feni, Munshiganj to have new EPZs
Saturday, 12 January 2008
FE Report
The government has finalised the site selection for setting up two new export processing zones (EPZs) in Munshiganj and Feni to cater to the growing demand of foreign investors seeking investment in the industrial parks.
The proposed Meghna EPZ and Feni EPZ, each on 500 acres of land, will be built through public-private partnership, with the initial investment for land acquisition coming from the BEPZA's own funding.
"We've finally selected the sites for the new EPZs and the initial costs, especially for land acquisition, will be met from the internal resources," BEPZA (Bangladesh Export Processing Zones Authority) executive chairman Yussuf Abdullah Ashraf said in an interview.
However, the BEPZA chief noted that the private sector would be encouraged to invest in other infrastructure such as electricity and water supply, central effluent treatment plants and roads in the new EPZs.
Ashraf estimated the requirement of around Tk 4.0 billion in initial investment for the purpose of acquiring lands alone.
Officials described the BEPZA's plan to invite private entrepreneurs for infrastructure development as "a gradual shift" toward public-private partnership.
They also acknowledged that the Chief Adviser's refusal to subsidise the construction of new zones prompted the BEPZA to look for alternative financing sources.
BEPZA officials said textiles, electronics, leather industries and high-valued apparel industries will get preference in the proposed zones.
The BEPZa chief said foreign investors from China, Taiwan, Malaysia, Japan, the North America and European Union are interested to set up industrial units in EPZs.
Currently, a total of eight state-financed and managed EPZs are operating in the country and the majority of investors are involved in ready-made garments manufacturing.
Officials said that the EPZs would no more operate in the way now they do, with the zone regulator considering scaling down the incentive package designed for investors.
According to official figures, EPZs drew a record US$130 million in the first six months of the financial year, clocking an astonishing 135 per cent growth over the corresponding period of the last fiscal. The investment figure was $120 million in the last fiscal year.
Over the years, Bangladesh's export-oriented industrial parks have emerged as magnets for foreign investors, who are capaitalising on lower labour wages and a slew of fiscal and non-fiscal incentives.
Tax holiday for 10 years, duty-free import and export, relief from double taxation, and trade preferences and duty and quota-free access to the European Union and some industrialised nations are among the fiscal incentives.
The non-fiscal facilities include investment protection, permission of 100 per cent foreign ownership, no ceiling on foreign investment, and full repatriation of capital and dividend.
However, it was not immediately clear what incentives the authorities will abolish.
According to official figures, the publicly-managed EPZs netted nearly $1.1 billion in investment between 1983 and 2005, accounting for nearly 20 per cent of annual exports, and 25 per cent of the country's total foreign direct investment.
But the WB in a report, focussing on economic zone reforms, suggested that the spillover effects of EPZs on the economy would have been "much higher" had Bangladesh modernised its economic zone regime.
The government has finalised the site selection for setting up two new export processing zones (EPZs) in Munshiganj and Feni to cater to the growing demand of foreign investors seeking investment in the industrial parks.
The proposed Meghna EPZ and Feni EPZ, each on 500 acres of land, will be built through public-private partnership, with the initial investment for land acquisition coming from the BEPZA's own funding.
"We've finally selected the sites for the new EPZs and the initial costs, especially for land acquisition, will be met from the internal resources," BEPZA (Bangladesh Export Processing Zones Authority) executive chairman Yussuf Abdullah Ashraf said in an interview.
However, the BEPZA chief noted that the private sector would be encouraged to invest in other infrastructure such as electricity and water supply, central effluent treatment plants and roads in the new EPZs.
Ashraf estimated the requirement of around Tk 4.0 billion in initial investment for the purpose of acquiring lands alone.
Officials described the BEPZA's plan to invite private entrepreneurs for infrastructure development as "a gradual shift" toward public-private partnership.
They also acknowledged that the Chief Adviser's refusal to subsidise the construction of new zones prompted the BEPZA to look for alternative financing sources.
BEPZA officials said textiles, electronics, leather industries and high-valued apparel industries will get preference in the proposed zones.
The BEPZa chief said foreign investors from China, Taiwan, Malaysia, Japan, the North America and European Union are interested to set up industrial units in EPZs.
Currently, a total of eight state-financed and managed EPZs are operating in the country and the majority of investors are involved in ready-made garments manufacturing.
Officials said that the EPZs would no more operate in the way now they do, with the zone regulator considering scaling down the incentive package designed for investors.
According to official figures, EPZs drew a record US$130 million in the first six months of the financial year, clocking an astonishing 135 per cent growth over the corresponding period of the last fiscal. The investment figure was $120 million in the last fiscal year.
Over the years, Bangladesh's export-oriented industrial parks have emerged as magnets for foreign investors, who are capaitalising on lower labour wages and a slew of fiscal and non-fiscal incentives.
Tax holiday for 10 years, duty-free import and export, relief from double taxation, and trade preferences and duty and quota-free access to the European Union and some industrialised nations are among the fiscal incentives.
The non-fiscal facilities include investment protection, permission of 100 per cent foreign ownership, no ceiling on foreign investment, and full repatriation of capital and dividend.
However, it was not immediately clear what incentives the authorities will abolish.
According to official figures, the publicly-managed EPZs netted nearly $1.1 billion in investment between 1983 and 2005, accounting for nearly 20 per cent of annual exports, and 25 per cent of the country's total foreign direct investment.
But the WB in a report, focussing on economic zone reforms, suggested that the spillover effects of EPZs on the economy would have been "much higher" had Bangladesh modernised its economic zone regime.