Japanese investments in two economic zones are unlikely to take place in next two years as those zones are not ready.
According to insiders, the Japanese special economic zone on over 1000 acres of land in Araihazar upazila of Narayanganj district will take at least two years to be ready for Japanese investors as its work started late.
They said Bangladesh Economic Zones Authority (BEZA) started the work with support of the Japan International Cooperation Agency (JICA) to make the land ready last year. So far it has been able to acquire only 500 acres of land.
However, the Covid-19 pandemic delayed the work on land development in the acquired area.
Besides, the investment opportunity for Japanese investors in the Mirersorai economic zone (EZ) is now under a feasibility study.
The BEZA has a target to make the Japanese EZ ready next year. But officials familiar with this said it would be difficult to complete the work in next two years as the work of setting up utility lines, including those of gas and electricity would be done after completion of the land development.
The BEZA has been working on the EZ under a Tk 25.82 billion foreign direct investment project.
BEZA Executive Chairman Paban Chowdhury said Japanese investors would take time to invest, as several points of demand they placed need to be met. So, preparations are needed and the BEZA has been doing it to gain their confidence.
He, however, said BEZA would start allotting plots in the Araihazar EZ by September next year.
"We hope to provide some plots by September 2021 while doing infrastructure development work side by side," the Executive Chairman told the FE at his office.
He also said a significant amount of time was spent to carry out a feasibility study on the site selection for the EZ.
The BEZA has already signed a contract with Sumitomo Corporation as the land developer of the JEZ. Land development work is yet to start due to the Covid-19. Toya Corporation is responsible for the land development work as a contractor.
Besides, Japan has shown interest to invest in the Mirersorai EZ, but sources said Japan wanted at least three areas for the purpose and those also were not ready.
It was also learnt that Sojitz Corporation interested to invest in the Mirersorai economic zone under the Public-Private Partnership arrangement was studying a new investment plan.
Investor sources said Japanese companies would have shifted to Bangladesh even amid the pandemic as part of the Japanese government's relocation package, if they got land ready.
According to Japan External Trade Organisation (JETRO), the Japanese companies have now been trying to recoup their financial losses due to pandemic and move to ASEAN countries as part of the government's stimulus packages.
But JETRO Dhaka Office Country Representative Yuji Ando recently hinted at arrival of 50 Japanese companies every year with the creation of investment climate in Bangladesh.
In an email to the FE correspondent, Mr Ando, however, said it would take time for other companies to decide on investment in Bangladesh.
Mr Ando urged the government to utilise the time for preparation to welcome new investment by improving business environment and deregulation.
JETRO has long been trying to lobby the government for meeting different points of demand including creation of an investment climate for the Japanese companies which are mainly related to taxation.
A JETRO survey in 2019 on Japanese companies investing in different countries found 70 per cent of the country's companies in Bangladesh wanted to expand business.
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