Power, gas supply shortage hits RMG production
Monday, 16 May 2011
FE Report
The country's leading export oriented garment sector is facing acute shortage of power and gas that is hampering production, the leaders of Bangladesh Garments Manufacturers and Exporters Association (BGMEA) stated on Sunday. They said that many factories have been lying idle for a long time due to scarcity of power and gas that may stunt their growth. "The garment sector requires about 710 megawatt (MW) of power everyday. But industries have been facing an average of five hours of loadshedding per day. Facing power shortage, the industry is compelled to use 245 million (24.5 crore) litre diesel that has caused an annual financial loss of Tk 7600 million (760 crore)," said BGMEA President Md Shafiul Islam Mohiuddin. "The garment industries located at the EPZ contribute only 8.0 per cent while industries outside EPZ contribute 92 per cent of the country's total export," he said at a meeting with the Commerce Minister Muhammad Faruk Khan at his ministry in the capital. He demanded uninterrupted supply of power and gas for garment industries from the government. Industries located at the Export Processing Zone (EPZ) are currently enjoying such facilities. He said that if the garment sector gets uninterrupted supply of power, gas, and other logistic support from the government, the export can reach US $ 40 billion in the near future. "It (garment sector) is a blessing for us (Bangladesh). We are capable of running the sector by ourselves (local entrepreneurs). We don't need foreign direct investment (FDI) in the garment sector. But we suggest developing backward linkage industries," said the BGMEA president. With regard to increasing facilities for garments workers he said, "We consider workers as our partners. We call upon the government to introduce rationing system and give interest-free loans to build dormitory for them (garment employees)". BGMEA leader placed recommendations to the government that include providing smooth supply of power and gas, subsidising diesel and furnace oil, developing the Dhaka- Chittagong highway, withdrawing the 15 per cent value added tax (VAT) on the rents of small and medium sized garment industries, modernising the Chittagong Port, as well as reducing charges at ports, etc. He also suggested that the government lower bank interest rates, train manpower, and upgrade the Fashion Institute into a full fledged university. After giving a patient hearing to the BGMEA delegation, the Commerce Minister stated: "I will discuss your (exporters) problems with the concerned ministry". With regard to the new connections of gas and power to the industries he responded, "I already told the concerned ministry that there should be a quota for new connections of utilities services to the industries which are expected to start in the next month". On the lending interest rates, he said, "The bank's interest rates should be rational. It must come down to a single digit."
The country's leading export oriented garment sector is facing acute shortage of power and gas that is hampering production, the leaders of Bangladesh Garments Manufacturers and Exporters Association (BGMEA) stated on Sunday. They said that many factories have been lying idle for a long time due to scarcity of power and gas that may stunt their growth. "The garment sector requires about 710 megawatt (MW) of power everyday. But industries have been facing an average of five hours of loadshedding per day. Facing power shortage, the industry is compelled to use 245 million (24.5 crore) litre diesel that has caused an annual financial loss of Tk 7600 million (760 crore)," said BGMEA President Md Shafiul Islam Mohiuddin. "The garment industries located at the EPZ contribute only 8.0 per cent while industries outside EPZ contribute 92 per cent of the country's total export," he said at a meeting with the Commerce Minister Muhammad Faruk Khan at his ministry in the capital. He demanded uninterrupted supply of power and gas for garment industries from the government. Industries located at the Export Processing Zone (EPZ) are currently enjoying such facilities. He said that if the garment sector gets uninterrupted supply of power, gas, and other logistic support from the government, the export can reach US $ 40 billion in the near future. "It (garment sector) is a blessing for us (Bangladesh). We are capable of running the sector by ourselves (local entrepreneurs). We don't need foreign direct investment (FDI) in the garment sector. But we suggest developing backward linkage industries," said the BGMEA president. With regard to increasing facilities for garments workers he said, "We consider workers as our partners. We call upon the government to introduce rationing system and give interest-free loans to build dormitory for them (garment employees)". BGMEA leader placed recommendations to the government that include providing smooth supply of power and gas, subsidising diesel and furnace oil, developing the Dhaka- Chittagong highway, withdrawing the 15 per cent value added tax (VAT) on the rents of small and medium sized garment industries, modernising the Chittagong Port, as well as reducing charges at ports, etc. He also suggested that the government lower bank interest rates, train manpower, and upgrade the Fashion Institute into a full fledged university. After giving a patient hearing to the BGMEA delegation, the Commerce Minister stated: "I will discuss your (exporters) problems with the concerned ministry". With regard to the new connections of gas and power to the industries he responded, "I already told the concerned ministry that there should be a quota for new connections of utilities services to the industries which are expected to start in the next month". On the lending interest rates, he said, "The bank's interest rates should be rational. It must come down to a single digit."