65 RMG, textile units fail to start production for want of gas supply

Badrul Ahsan | Published: April 04, 2014 00:00:00 | Updated: November 30, 2024 06:01:00

Owners of more than 65 readymade garment (RMG) and textile units are facing bankruptcy as they have failed to start production in their factories for want of gas connections, industry insiders said.
The government has stopped providing new gas connections since March 2009 and later on in 2013 decided to resume the connection on a limited scale. But the connections which the garment and textile factories got are very nominal compared to the demand.
According to the statistics of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), the total amount of default loans of such factories is around Tk 9.0 billion.
"I have set up a factory with the permission of the government, but now I am suffering miserably. The interest on my bank loan has been accumulating and I am becoming a loan defaulter gradually," Ibrahim Khalil, a director of Azmi Fashion told the FE.
"I have invested Tk 500 million to set up the factory. But unfortunately, I can't start operation even after more than two and a half years due to absence of gas connection even after paying all the amount required under the Demand Note and other purposes for gas connection," he added.
"If it is not possible to give gas connection, then why did the government permit me to import machinery and set up the factory?" he questioned.
Managing Director of JIT Knit Composite Ltd, Abu Jafar Nizami, another victim of the situation, told the FE: "I have invested over Tk 650 million in my factory and completed all the formalities including the payment of Tk 10 million to the gas company, procurement of environmental clearance certificate but yet to get gas connection."
"The financing banks have initiated legal measures to confiscate the factory for my failure to pay interest, which according to banks' estimate, now stands at about Tk 40 million," Nizami said in an emotion-chocked voice.
However, among other owners of Kulirchar Knitex Ltd, Fashion Fair BD Ltd., Bangla Nice Sourcing Ltd, Young Seb Shin, Kozi Apparels Ltd, Micro Fiber Ltd also expressed the same anxiety for bank liabilities due to the absence of gas connections.
Meanwhile, BGMEA President Atiqul Islam, expressing his helplessness over the issue, said the industry has been facing several types of hurdles. Now if the entrepreneurs face problems in getting gas and electricity connections then how they would go forward.
He, however, urged the government to take immediate initiative to provide gas connections to the export-oriented factories.
"We have urged the government on several occasions to take a special initiative to save the new entrepreneurs who have been suffering due to the non-availability of gas connections. If these people become bankrupt, they will never be able to regain strength,"
Mr Islam also said: "A good number of the new entrepreneurs are going to be bankrupt soon and some are trying to sell out their machinery to avoid further loan burden."
Meanwhile, BKMEA president Salim Osman said, "Considering the importance of the sector, we have requested the government to allow gas connections to the new factories."
"At least five backward linkage industries with hundreds of their staff and workers depend on the operation of a garment factory. So no other sector of the country has such an immense potential as the RMG," Mr Osman said.