Setting up of light engineering industrial park uncertainEntrepreneurs of the promising sector frustrated

Kamrun NaharSetting up of light engineering industrial park has become uncertain despite the government's repeated promise to rehabilitate the sector. The government took interest in establishing the park considering increased demand for products of the sector at home and abroad and potential opportunity of attracting foreign investment in it. Entrepreneurs of light engineering sector (LES) vented their sheer frustration over the slow implementation process of their long cherished industrial park for maintaining a healthy growth of the sector and ensuring contribution of manufacturing sector to the GDP and attracting FDI and generating employment through technology upgrade. "We have been trying to make a cluster village for light engineering sector which will be implemented by Bangladesh Small and Cottage Industries Corporation (BSCIC) at Keraniganj," Industries Minister Dilip Barua told the FE Tuesday. Asked about the deadline of the project, the minister said it cannot be specified as the park will be set up by the government and the work procedure of it well known to all. The entrepreneurs also expressed their frustration over the government's various projects under public-private partnership (PPP) as in most cases private investors are afraid of red-tapism and control of the government. "There is no progress about the park. We are so fed up with the issue that we have just stopped requesting about that," said Abdur Razzaque, president of Bangladesh Engineering Industry Owners' Association. Replying to a question as to why they do not take initiative at private sector for setting up the LE industrial park, Mr Razzaque said there are many obstacles in setting up the park at private sector. We have made a mistake depending on the false promises of the government, he lamented. "You know land acquisition is a big problem at private level as there may not be an environmental clearance for setting up the park in a particular area," said Mr Razzaque, adding, "sometimes the area we choose may fall under the detailed area plan, sometimes land price is too high for small and medium enterprises to purchase. In case of any cheap land there may not be utility (sewerage, gas, water, power) services". The LE sector is estimated to have a Tk 200 billion (20,000 crore) market in Bangladesh. Around 40,000 LE industries are operating all over the country with informal clusters in old town of Dhaka city, industrial zone of Khulna and Tongi-Gazipur, agrarian region of the northern parts (Bogra, Pabna, Naogaon), Chittagong, Jessore and Naraynganj. These industries are manufacturing highly value added engineering goods with an annual turnover of Tk 100 billion (10,000 crore). According to industry insiders, there have been increased investments in the sector in recent years. During the period 2000-2007, the investments increased three fold from Tk 500 million (50 crore) to some Tk 1.5 billion (150 crore). Some 80 per cent of physical investments are for land and machinery and equipment. He said there are 1600 industrial parks in India, especially in south India whereas we have not a single one. "I visited along with our potential LES members to Taiwan, Korea and China where we met our counterparts. But we could not accept their offer of investing technology and technical know-how as they demand land and working capital from us," said Mr Razzaque. New investments are coming mostly from internal funds (retained earnings), the informal sector borrowing, bank and lease financing while 95 per cent firms do not borrow from the banking system because of perceived (or real) burden from placing mortgages, high interest rate and cumbersome application procedure. "The government has done something through Board of Investment (BOI) and special economic zone but the implementation process is very slow. An industry cannot run this way ," he said.