1st instalment of recompense to be distributed early Sept

Ismail Hossain | Published: August 23, 2014 00:00:00 | Updated: November 30, 2024 06:01:00

The first instalment of the compensation for tannery relocation from Hazaribagh to Savar will be distributed to tanneries early next month (September).
The first instalment will be around 10 per cent of the total promised compensation of Tk 2.5 billion, according to a source in the Savar Tannery Estate Authority.
The compensation will be given under a memorandum of understanding (MoU) signed between the tanners and the government in October last year to ensure relocation of Hazaribagh tanneries to the Savar Tannery Estate.
According to the MoU, the government has decided to provide Tk 2.5 billion (US$ 1.0 = Tk 76) as compensation to the tanners for relocation and give Tk 6.6 billion (80 per cent) out of the total project cost.
However, the owners will have to pay the remaining Tk 1.65 billion (20 per cent) in instalments.?
Â "We are not happy as government is giving a very small amount of compensation in first instalment although we sought at least 50 per cent of total compensation before relocating to Savar," President of Bangladesh Finished Leather, Leather Goods & Footwear Exporters Association (BFLLFEA) Mohammad Abu Taher told the FE.
"Tk 2.5 billion was promised 10 years ago, so the amount is not enough now," he said.?
Bangladesh tannery owners are also trying to get a Tk 1.0 billion (US$ 1.3 million) loan from different financial institutions for meeting the cost of relocation. ??
They requested different agencies including Japan International Cooperation Agency (JICA), International Finance Corporation (IFC) and local banks and financial institutions for Tk 1.0 billion at a low interest rate.
"We badly need long-term loan at lower interest rate for the relocation. We can't bear all costs of relocation, and if we do so, we won't be able to run our business," Mohammad Abu Taher said.
Earlier, they also met Bangladesh Bank Governor Dr Atiur Rahman seeking financial assistance.?"We met with the BB governor. He did not assure us of anything, but said he would try to find a way for us," Taher said.?
"Investment of around Tk 75 billion is needed for relocation," said Taher, adding that if financing is not arranged by the government, many tannery owners will have to stop their business.
Some 15 tannery owners have already started construction of their factories in Savar Leather Industrial Park in a bid to expedite the relocation of hazardous factories from Hazaribagh in Dhaka.
The companies including Ruma Leather Industries, Bengal Leather Complex, Kohinoor Tanneries and Pragati Leather Complex have begun preliminary work such as piling, construction of labour sheds and soil tests, said Mr Taher.
He said 50 more tanneries will start construction very soon.
He said the move comes as the year-end deadline set by the European Union for relocation draws near. Bangladesh faces an export ban on leather or leather goods to European countries if the deadline is not met.
The ministry of industries (MoI) has already allocated the plots on the 200-acre leather estate to 155 tannery owners through Bangladesh Small and Cottage Industries Corporation, a wing of the MoI. A total of 150 tannery owners have submitted their factory layout plans, of which 130 got approvals.