November 17, 2020: A decision by the energy ministry to stop providing new gas connections to the industries outside economic zones and industrial parks from April next year has drawn the ire of industrialists.
Trade body and business chamber leaders said they did not fully agree with the initiative as such a sudden move will act as a hurdle to industrialisation.
A circular from the Energy and Mineral Resources Division on October 5 said the government would not allow any new gas connections to the industries located outside of economic zones from March 31 next year to bring about industrialisation in a planned way.
“We also want planned industrialisation, but some risks are there,” said Shams Mahmud, president of the Dhaka Chamber of Commerce and Industry (DCCI), which mainly works with micro, small and medium enterprises.
He said many entrepreneurs have already purchased land for expansion but could not do so because of the coronavirus pandemic.
“They will be in trouble due to the government decision,” he said, suggesting that the government reconsider the decision and take time.
The private economic zones may charge abnormal prices for land and other services. So, many entrepreneurs cannot buy land from them. “They will be in big trouble due to the decision,” Mahmud said.
A Matin Chowdhury, managing director of Malek Spinning Mills and a former president of the Bangladesh Textile Mills Association (BTMA), welcomes the government decision.
“But this necessitates time as the economic zones are not yet ready, while small entrepreneurs cannot run their units in such specialised areas,” he said.
The government should provide a lot of facilities to the small units so that they can shift there to grow more, said Chowdhury.
“The government’s decision on planned industrialisation is vital. I am also in favour of the move,” said BTMA President Mohammad Ali Khokon.
However, the investment will be affected as economic zones are not ready to set up industrial plants, he said.
The energy and mineral resources division issued the circular citing an instruction of the prime minister at a meeting of the governing body of the Bangabandhu Sheikh Mujib Shilpa Nagar on October 20, 2019.
The directive said, “In order to discourage unplanned industrialisation, all utility services, including power and gas connection will have to be stopped in phases except for that inside the economic zones.”
The directive does not apply to the economic zones under the Bangladesh Economic Zones Authority (Beza), and the industrial sites under the Bangladesh Small and Cottage Industries Corporation (BSCIC).
Md Anisur Rahman, secretary of the energy and mineral resources division, told The Daily Star that the circular had been issued to encourage planned industrialisation and avoid the unplanned ones.
“We issued the circular as per the direction of the prime minister, and we will follow it strictly to discourage unplanned industrialisation and protect agricultural land,” he said.
“We will run campaigns about our circular to stop unplanned industrialisation. Industrial gas connections will not be provided after March 2021,” he added.
About the industries that have already been set up and are awaiting gas connections, he said obviously they would have to complete legal and official formalities to avail the connections.
Rahman also said they could avail physical connection later, but official formalities would have to be completed within the stipulated time.
Manwar Hossain, group managing director of the Anwar Group of Industries, said the directive would hinder the influx of fresh investment from new industries as investors would not be able to expand their operations.
“If industrialists do not get gas connections, they will not be able to expand. How will they then survive the competition?” he asked.
According to him, the directive could not be termed as visionary. “This type of directive will not bring any good result for the industrialisation as existing industrialists have already settled in the locations that suit them right.”
The government should allocate plots to existing industries if it wanted to stop industrialisation outside the economic zones, he said.
Paban Chowdhury, executive chairman of the Beza, said investors settling in any of the economic zones would get gas connections.
Now gas is available at all operational or under-construction economic zones, including the BSMSN, the Jamalpur economic zone and the Moulvibazar economic zone. Besides, gas connections are available at all private economic zones, he said.
There was no gas at the Mongla economic zone because of an absence of a supply network in Bagerhat district.
Regarding the directive of the energy and mineral resources division, he said they wanted planned industrialisation to avoid gas pipelines being laid in a scattered manner.
He further said the directive was the division’s decision and that it had no connection with the Beza.
Mohammed Amirul Haque, managing director of Premier Cement, said investors have who already started new projects and planned expansions would face problems if they could not avail gas connection.
The idea of the economic zones is good for planned industrialisation and the environment and for protecting the land, but the government should give a thought to the existing and already-approved plans for industries, he said.
“Many industrialists have already invested in new projects or purchased land to expand their operations. How will they roll back their investment plans?” he asked.
BSCIC Chairman Md Mostaque Hassan said around 35 per cent of the 76 industrial parks of the BSCIC has gas connections. The remaining 65 per cent of the parks have no gas connection due to the absence of gas supplies in the respective districts.
The parks in the northern district, except for Saidpur, Nilphamari and Bogura, have no gas. Investors are available where gas is available, and almost all plots are booked in these parks.
In the Sylhet region, there are no investors, although the BSCIC provides gas and power. The people in the Sylhet region, including the expatriates, are not interested in making investments, he said.
The business leaders say the government should pay special heed to the micro, cottage, small and medium enterprises as these units are the pillar of the economy and catalyst for employment generation.
There are more than 8.8 million cottage, micro, small and medium enterprises, many of which cannot buy land at the economic zones to set up industries.
Source: Daily Star
