Garment Village
Owners yet to arrange money for land acquisition
The progress of establishment of a garment village at Bausia in Munshiganj is hanging in the balance as the factory owners concerned are yet to provide money for land acquisition.
The government has already completed the process of land acquisition and asked the garment owners to provide about Tk 800 crore as payment for the land acquisition by February but the owners missed the deadline.
Leaders of the Bangladesh Garment Manufacturers and Exporters Association and Bangladesh Knitwear Manufacturers and Exporters Association said they sought time for two months to pay the land acquisition money as the amount was big and it was difficult to arrange for the entrepreneurs.
The leaders of the two apex trade bodies in the apparel sector sit today (Sunday) with commerce minister Tofail Ahmed at the BGMEA headquarters in the city to discuss the issue.
In the meeting, the garment factory owners will demand for sovereign guarantee against Tk 800-crore bank loan to acquire land for the garment industrial park, sources concerned said.
Earlier, the BGMEA put a proposal to the commerce ministry demanding sovereign guarantee against Tk 800 crore credit from commercial banks in home and abroad with a seven-year term.
In the last week, the commerce ministry forwarded the BGMEA proposal to finance minister AMA Muhith.
‘We requested the government to take a move so that the entrepreneurs could pay the amount in instalment otherwise it will not be possible for them to pay the amount,’ BKMEA vice-president Mohammed Hatem told New Age on Saturday.
He said that they were trying to bring foreign investment in the garment village and a Chinese company had shown its interest for investment but they wanted sovereign guarantee.
‘We have promised that if the government allocates land, the entrepreneurs will develop the plots at their own cost. But now the entrepreneurs have fallen in a risk of huge expenditure as the government allocated land which is under water.’
According to the BGMEA, approximately Tk 10,000 crore is required for setting up the garment village.
Without government support the owners of small- and medium-scale factories, those who are non-complaint, will not be able to pay for land acquisition and plot development as well, Hatem said.
The China-based Hong Kong KRD International Investment Group Ltd assured the BGMEA and the BKMEA of giving Tk 1,400 crore in loan for land acquisition and development.
The trade bodies will sign a memorandum of understanding with KRD if they can earn the assurance of sovereign guarantee from the government as per the requirement of the Chinese company.
The garment sector leaders held several rounds of talks with the Board of Investment, central bank, leaders of the Bangladesh Association of Banks and the Association of Bankers, Bangladesh and as per the suggestion of the meetings the BGMEA and BKMEA are going to form a joint company for obtaining foreign loan.
The loan might be available at a rate of four per cent, people involved with the process told New Age.
BGMEA vice-president Shahidullah Azim told New Age that they were trying for loan from the banks in home and abroad as it would not be possible for the garment factory owners to pay Tk 800 crore at a time for land acquisition.
‘We submitted an application to the deputy commissioner of Munshiganj seeking time for two months to pay the money for land acquisition as the deadline ended on February 28,’ he said.
In June last year, the BGMEA and the BKMEA invited application from apparel makers to know about their willingness in shifting factories to the garment village.
The trade bodies got applications for allocating plots requiring 2,200 bighas of land while the capacity of the village is 577 plots totalling 1,100 bighas.
The government has allocated 1,500 bighas of land for the garment village which will have plots with infrastructural facilities, utility services, medical facilities, central effluent treatment plants, day-care centres, roads, drainage facilities, waste-dumping yards, fire-fighting equipments, banks, insurance offices and IT parks.
-With New Age input
