Tanners seek Tk 2.50b at low interest for relocation

Rezaul Karim | Published: May 20, 2014 00:00:00 | Updated: November 30, 2024 06:01:00

Tanners have sought an allocation of Tk 2.50 billion from next budget so that they get loan from banks at lower rate of interest as subsidy, officials said.
The Bangladesh Finished Leather, Leather Goods & Footwear Exporters Association (BFLLFEA) sent a letter to Fazle Kabir, Secretary of the Ministry of Finance (MoF), seeking the fund.
"We badly need long-term loan with lower interest rate for relocation to Savar. It is quite impossible to bear all costs of relocation," industry insiders said.
The entrepreneurs of the sector are worried over relocation of tanneries without long- term loan. The term should be of 20 years with grace period, they said.
Rate of interest should be 4 per cent like special agricultural credit that is disbursed for cultivation of pulses, oil seeds, spices and maize in the current fiscal, sources concerned said.
The government should give 6.0 per cent interest rate subsidy to the banks so that they could get 10 per cent in total when the banks disburse loan to tanners at 4.0 per cent rate, they added.
The tanners and the government signed a memorandum of understanding (MoU) in October last to ensure relocation of Hazaribag tanneries to the Savar Tannery Estate.
According to the MoU, the government will provide Tk 2.5 billion as compensation to the tanners for relocation and give Tk 6.63 billion (80 per cent) out of the total project cost.
"The relocation works of 155 tanners have already started from the city's Hazaribagh to Savar. Compensation amount from the government to the tanners for relocation is just a peanut. As a result, the amount could not be effective for relocation," President of the Bangladesh Finished Leather, Leather Goods & Footwear Exporters Association (BFLLFEA), Mohammad Abu Taher, told The FE Sunday.
Tannery owners have also a plan to build a modern township on around 50 acres of land in the city's Hazaribagh area after relocation of their factories to Savar to meet the relocation cost, a source concerned said.
"We have discussed the issue in our forum and decided to construct a planned housing project in the area under a joint venture or a single initiative," he said.