Gas crisis hits dozens of ready EPZ plants
Naim-Ul-Karim | Sunday, 10 August 2008
Dozens of newly set-up factories in the country's export processing zones (EPZs) could not start operation as they have failed to get gas connections despite assurances by the authorities, officials said Saturday.
The companies-most of them owned by foreign entrepreneurs--- have invested millions of dollars, but they are now counting interests and losses every month failing to go into production in due time.
"We are waiting for more than three months for power and gas supply as our factory is ready to go into production," said Luzhen, assistant managing director of Bilia Casting Private Ltd, a Chinese cast-iron manufacturer.
"When we came here last year, the authorities assured us that all utility services including power and gas will be available as soon as we have the factory ready," Luzhen, who uses one name, said.
"But there is no sign of gas and power. We have been informed recently that gas will not be available before 2011. Every month we are counting heavy losses," she said.
Bilia is one of more than 78 companies, which have signed agreement with the Bangladesh Export Processing Zones Authority (BEPZA) to invest $1.4 billion in their plants in the country's eight EPZs.
The EPZs are home to around 300 plants, with 156 owned foreign, 42 joint ventures and 66 local investors. The plants exported goods worth $2.43 billion-up about 17 percent than the past fiscal year.
In the outgoing fiscal year ended in June, the EPZs wooed a record $302 million investment--- a nearly hundred per cent increase over the past fiscal--- as investors were attracted by the country's immense cheap labour and tax incentives.
Denim Expert Ltd, a Holland-Bangladesh joint venture, is one of the top garment companies, which found the Bangladeshi EPZs' facilities 'fascinating'.
The company has already invested more than $4.0 million in its planned $14 million plant in the Karnaphuli EPZ in Chittagong, which is expected to produce 50,000 pieces of trousers and jeans a day.
But a few months back, the company was told by the authorities that it would get no immediate gas supply despite earlier promises. "It's a big blow for us and a sheer waste of our time and money," Farooq Hossain, the co-owner of the factory.
Mr. Hossain said his Dutch partner is very much annoyed.
"We had lined up plans to establish backward linkage plants in collaboration with other foreign partners. But I think, none will be interested to invest here due to the gas problem."
Md Fazlul Islam, director of Rhythm Group, said since June this year his fully-furnished woven garment plant has been waiting for gas supply. "We have already invested more than Tk 140 million." Authorities said they don't have any idea when the utilities would be ensured, as the country is now in the midst of the worst power and gas crisis since its independence.
Nurul Islam, project director of the Karnaphuli EPZ in Chittagong said more than 10 industrial units in his EPZ have been ready to go into production but could not start operation due to gas crisis.
"We haven't received any timeframe from the Bakhrabad Gas Company as to when our newly established plants are going to get gas," he said.
Executive chairman of the BEPZA Brig General Jamil Ahmed Khan said some factories in the EPZs have been affected by the recent gas crisis, but he promised that the problem would be over soon.
"We held talks with the chief advisor's special aide for the Ministry of Energy and Mineral Resources. We hope by the end of the year we would arrange gas for the factories which were promised earlier," he said.
Senior officials at the BEPZA, however, are not so hopeful, with one telling the FE that the EPZs are already receiving poor response from new investors due to the gas crisis. "We can no longer give assurance to the new investors that we can supply gas. It's sending a negative message to the investors. Many have already gone back hearing the bad news," he said.
The companies-most of them owned by foreign entrepreneurs--- have invested millions of dollars, but they are now counting interests and losses every month failing to go into production in due time.
"We are waiting for more than three months for power and gas supply as our factory is ready to go into production," said Luzhen, assistant managing director of Bilia Casting Private Ltd, a Chinese cast-iron manufacturer.
"When we came here last year, the authorities assured us that all utility services including power and gas will be available as soon as we have the factory ready," Luzhen, who uses one name, said.
"But there is no sign of gas and power. We have been informed recently that gas will not be available before 2011. Every month we are counting heavy losses," she said.
Bilia is one of more than 78 companies, which have signed agreement with the Bangladesh Export Processing Zones Authority (BEPZA) to invest $1.4 billion in their plants in the country's eight EPZs.
The EPZs are home to around 300 plants, with 156 owned foreign, 42 joint ventures and 66 local investors. The plants exported goods worth $2.43 billion-up about 17 percent than the past fiscal year.
In the outgoing fiscal year ended in June, the EPZs wooed a record $302 million investment--- a nearly hundred per cent increase over the past fiscal--- as investors were attracted by the country's immense cheap labour and tax incentives.
Denim Expert Ltd, a Holland-Bangladesh joint venture, is one of the top garment companies, which found the Bangladeshi EPZs' facilities 'fascinating'.
The company has already invested more than $4.0 million in its planned $14 million plant in the Karnaphuli EPZ in Chittagong, which is expected to produce 50,000 pieces of trousers and jeans a day.
But a few months back, the company was told by the authorities that it would get no immediate gas supply despite earlier promises. "It's a big blow for us and a sheer waste of our time and money," Farooq Hossain, the co-owner of the factory.
Mr. Hossain said his Dutch partner is very much annoyed.
"We had lined up plans to establish backward linkage plants in collaboration with other foreign partners. But I think, none will be interested to invest here due to the gas problem."
Md Fazlul Islam, director of Rhythm Group, said since June this year his fully-furnished woven garment plant has been waiting for gas supply. "We have already invested more than Tk 140 million." Authorities said they don't have any idea when the utilities would be ensured, as the country is now in the midst of the worst power and gas crisis since its independence.
Nurul Islam, project director of the Karnaphuli EPZ in Chittagong said more than 10 industrial units in his EPZ have been ready to go into production but could not start operation due to gas crisis.
"We haven't received any timeframe from the Bakhrabad Gas Company as to when our newly established plants are going to get gas," he said.
Executive chairman of the BEPZA Brig General Jamil Ahmed Khan said some factories in the EPZs have been affected by the recent gas crisis, but he promised that the problem would be over soon.
"We held talks with the chief advisor's special aide for the Ministry of Energy and Mineral Resources. We hope by the end of the year we would arrange gas for the factories which were promised earlier," he said.
Senior officials at the BEPZA, however, are not so hopeful, with one telling the FE that the EPZs are already receiving poor response from new investors due to the gas crisis. "We can no longer give assurance to the new investors that we can supply gas. It's sending a negative message to the investors. Many have already gone back hearing the bad news," he said.