Korean EPZ in trouble
Instead of solving the problems the Korean Export Processing Zone has been facing, the government plans to take back part of the 2,492 acres of land allotted to the KEPZ 16 years ago.
The country's largest private export processing zone is in a web of land-related and legal tangles triggered mainly by the non-cooperation from the local administration and some government agencies and public representatives.
The government is yet to hand over the transfer deed for the land in Anwara upazila of Chittagong to the KEPZ owner, Korean YoungOne Corporation, creating obstacles to investment.
Several foreign investors, including the Japanese, over the years had contacted the KEPZ authorities for plots but had to back out realising the land-related complications.
Without having the land deed, YoungOne could not offer them any plot.
Now the land ministry has begun the process for getting back the land on the grounds that YoungOne had not been able to set up industries there, ministry sources said.
“We can't give them so much land when they failed to develop it in so many years,” said Saifuzzaman Chowdhury, state minister for land and lawmaker from the area.
“How much land will be given to the company and how much will be taken back is now under discussion. The transfer deed will be issued after that,” he told The Daily Star recently.
He alleged KEPZ officials were “doing things wilfully” and the Korean company was trying to expand the area by cutting hills.
“As per the lease,” Saifuzzaman went on, “they are supposed to avoid mosques, graveyards and schools in the area of the KEPZ but they are not following the rules. They prevent locals from burying the dead and from using walkways. You can't go for development fighting with locals.”
He also said, “I am the local lawmaker plus state minister for land but I haven't seen them come to me and discuss the issues.”
Other foreign investors were looking for land to set up industries, said the state minister, indicating that part of the KEPZ site could be allocated to them.
In recent days, the government has been promising Japanese and Chinese investors land and other facilities.
Prime Minister Sheikh Hasina at the ground-breaking of KEPZ on October 31, 1999, had pledged full support for the zone.
But the company faced hurdles at every step, from getting the environmental clearance to electricity and water supply. It got operational licence eight years after the ground-breaking.
The environmental clearance was issued after 10 years, in 2009, and that too was cancelled three years later and then given back after five months.
The Department of Environment (DoE) had cancelled the clearance in March 2012, alleging the KEPZ was cutting hills and damaging the environment. The certificate was returned once the allegation was found untrue.
But a case filed in this connection against KEPZ officials is yet to be withdrawn.
“We were supposed to get 160 megawatts of electricity in phases and 80 million cubic feet of gas a day. We got only 14 megawatts and no gas supply whatsoever as of today,” KEPZ Managing Director Mohammad Hasan Nasir told this correspondent.
About 84MW electricity from a 100MW power plant built for the KEPZ is being supplied to others. There were no telephone connections and fresh water supply, the MD said.
The authorities concerned cut off electricity supply in 2012, forcing the KEPZ to run its factories on diesel generators. The supply was restored after more than a year following an order from the Supreme Court.
“If you don't provide us with the basic utility services and create obstacles to developing the land, you can't accuse us of having failed. Rather, we started production two years into the ground-breaking and we are setting up factories against all odds.”
On the land being taken back, Nasir said the government could do it by force but it would be unethical and illegal. “It will seriously affect foreign investor confidence,” he said, adding the KEPZ authorities would go to court and, if necessary, to an international tribunal for justice.
“Now our main concern is not development and investment but legal battles to protect the KEPZ land from being taken over,” said the MD, who and some other officials and employees of KEPZ are facing over a dozen cases, including two attempted murder cases.
Many in Chittagong believe some local ruling AL leaders and businessmen were behind the troubles the KEPZ was facing. The land has become very lucrative after development. There is also an indirect pressure on the KEPZ to let go of a part of the land, they added.
The Local Government Engineering Department (LGED) is another agency to cause the KEPZ trouble. It gave fund to Boirag union parishad to illegally develop an earthen road inside the zone last year.
As police took no action, the KEPZ authorities went to the court. The Chittagong DC visited the spot asking both sides to keep the road as it was. But nothing could stop developing the road.
Despite all these difficulties, the Korean company has developed a substantial area by turning the barren hillocks into a productive industrial area spending $250 million. It constructed 21km of roads, housing for investors and officials, 17 lakes and planted 1.6 million trees.
YoungOne set up seven shoe and garment factories creating jobs for 6,000 locals. Four more factories would start operations by December.
Once fully operational, the KEPZ would employ 3.5 lakh people.
It has plans to set up a school, a residential university, a business development park and an IT park and a hospital but land-related complications are delaying those.
YoungOne, which started working in Bangladesh in 1980, has industries in Dhaka and Chittagong EPZs with 60,000 workers. It has operations in 12 other countries.
During the ground-breaking, Hasina hoped that YoungOne would be able to showcase KEPZ as a model for private sector industrial development in Bangladesh. The KEPZ officials said it would be possible only if they got support from the government.