Savar Tannery Estate: CETP incomplete even after 9 yrs

Despite nine years of work and expenditure of nearly Tk 500 crore, the construction of the Central Effluent Treatment Plant in the Savar Tannery Industrial Estate (STIE) has not been completed.

A Bangladeshi and Chinese joint venture company was awarded the construction work of the CETP through a bidding process in 2012 and the deadline for completion was 2017, but the deadline was extended several times.

The STIE finally took over the project from the joint venture company on June 27.

Meanwhile, the joint venture company's delay has pushed the country's several-billion-dollar leather sector into trouble, caused environmental pollution, damage to the nearby Dhaleshwari river and delay in obtaining the Leather Working Group (LWG) certification, which is required for better export prices of tanned leather.

The decision to terminate the contract with the company was taken based on recommendations of two technical committees formed in April to gauge the progress and impacts of the CETP.

From July 1, a newly formed government-owned local company, Dhaka Tannery Industrial Estate Wastage Treatment Plant Company Ltd, has taken charge of the CETP, said Jitendra Nath Paul, project director of the STIE.

Although the CETP has been running for some time now, the online monitoring system has not been installed as per the agreement and its laboratory has inadequate testing facilities, Paul said.

Moreover, only four out of eight kinds of testing facilities were installed in the laboratory and a mini workshop was not constructed at the CETP site, he said.

Paul said the government may now take another project for Balancing, Modernisation, Rehabilitation and Expansion (BMRE) to make it fully operational.

"We will cut Tk 25 crore from the total payable amount of Tk 492 crore to the construction company as penalty, as per the agreement," Paul told The Daily Star by phone.

Paul also said the current low capacity of the CETP reservoir -- 25,000 cubic metres per day -- is not able to handle the overflow of water during the peak season at Eid-ul-Azha, when 50 percent of the country's annual rawhide is generated.

With little reserves of water, Paul advised tanners not to overuse water in tanning rawhides and not to run all the tanneries at the same time.

The global standard of using water for washing a tonne of rawhide is 30,000 litres but in case of Bangladesh the tanners use more than 65,000 litres of ground water.

Nurul Alam, managing director of DCL, the local partner of the joint venture company, said there was a lack of cooperation from the very beginning between the Chinese partner and the Bangladesh side in the CETP project.

The Chinese company did not want to work properly and there was a delay in land-related procedures and other documents for construction of the CETP, he said.

"And eventually, it was not completed," said Alam, who owned less than 50 percent share in the joint venture, while the Chinese partner owned more than 50 percent.

Delwar Hossain, team leader of the CETP and a teacher of Bangladesh University of Engineering and Technology (BUET), said the partial construction of the CETP will not help in obtaining the Leather Working Group (LWG) certification to get international prices from buyers.

Regarding the construction of 25,000 cubic metres per day reservoir, Hossain said in the tender the actual capacity was fixed at 20,000 cubic metres per day but the capacity was raised later.

The country's production of rawhide was not considered when the tender was called for the construction of such a small reservoir, he said.

The LWG gives certification after a country racks up 1,365 points. Of the total points, the tannery factory owners will have to obtain 900, the CETP 100 and the authorities 100.

The remaining points will be given on other factors. Currently, Bangladeshi exporters ship leather at 40 percent less than international prices as they cannot do business with compliant companies in absence of LWG certification.

Moreover, tanners have also not improved their compliances, did not reduce the water used in rawhide processing and improve working conditions to obtain the LWG certification, Hossain said.

Currently, most tanneries housed in the STIE have to sell the leather to non-compliant buyers in China and Europe as they do not have LWG certification, which indicates better practices of compliances and protection of environment.

Regarding the CETP, Shaheen Ahmed, chairman of Bangladesh Tanners Association, said nothing has been done in the CETP regarding the heavy metals.

Since the CETP is not complete it needs BMRE for obtaining the LWG certification, Shaheen Ahmed also said.

Md Saiful Islam, president of Leathergoods and Footwear Manufacturers and Exporters Association of Bangladesh, said the export earning of leather and leather goods is on the way to recovery as western retailers and brands have been reopening their outlets.

In the last fiscal year, earnings from leather and leather goods grew by 18.06 percent to $941.67 billion, data from the Export Promotion Bureau said.