The cost for the relocation of tanneries to Savar from Hazaribagh in the capital and setting up central effluent treatment plant (CETP) there has mounted sharply due to delay in implementation and inclusion of new components in the project.
The project that took off in 2003 with an approximate cost of Tk 175.75 crore for completion by 2005 will now be implemented by June 2016 with the revised project cost of Tk 1078.71 crore.
“Legal complexities related to establishing CETP and Dumping Yard apart from tender related complexities have delayed the relocation process pushing the project cost to rise. Dollar price hike also contributed to the project cost,” Industries Minister Dilip Barua said at a press conference at Shilpa Bhaban in the city on Sunday.
Meanwhile, he said, new components like sewage treatment plant (STP), slush power generation system (SPGS) and solid waste management system (SWMS) have been included in the revised project considering necessity.
Industries Secretary M Moinuddin Abdullah and top officials of the Bangladesh Small and Cottage Industries Corporation (BSCIC) were present at the press conference.
Replying to a question, Barua said all should work together so that the EU does not suspend GSP like the USA.
“It seems change of government often means change of policy. I think any patriotic government will implement the project considering national interest,” he added.
The Industries Minister said that after settling the lengthy legal barriers, the second revised detailed project proposal was approved by the Executive Committee of National Economic Council (ECNEC) on August 13.
The committee in October 2007 had endorsed the first revised project proposal worth Tk 545.36 crore.
“The estimated cost of the second revised project is Tk 1078.71 crore of which the government will bear non-refundable Tk 250 crore for the relocation of tanneries,” Barua said.
The government will provide the remaining amount as equity (Tk 663.40 crore) and loan (Tk 165.60 crore), he said.
The Industries Minister said the owners of the tannery industries will pay the Tk 165.60 crore as payment for plots by installments.
“We hope the commissioning, stabilization and operational work of the project will be completed by June 2016,” he said.
The European Union, the leading destination of the country’s leather exports, has already issued strong warning that they will stop buying products from Bangladesh beyond 2014 if the CETP is not established in the industrial zone by then.
The leather industry exported leather, leather products and footwear worth US$980.67 million in fiscal 2012-13, up from US$765 million in the previous fiscal, according to data from the Export Promotion Bureau.