Cost doubles in revised proposal

The government is set to approve the second revised proposal for relocating the hazardous tanneries from the capital's Hazaribagh to Savar, increasing the original project cost by 98 percent.
But the relocation of 155 tanneries still remains uncertain as the tanners are yet to sign MoUs with the government, pending conditions on plot allocation fees.
The Tk1078.71 crore proposal will be placed today before the Executive Committee of the National Economic Council (Ecnec) for approval. The committee in October 2007 had endorsed the first revised project proposal worth Tk545.36 crore. The scheme was approved in 2003 with an approximate cost of Tk175.75 crore.
The tenure of the scheme ended last year and the government now plans to extend the deadline up to June 2016.
The costs have soared as the government will now provide Tk250 crore as compensation to the tanners for the relocation and Tk477.46 crore more for setting up the Central Effluent Treatment Plant (CETP) and a dumping yard.
The planning ministry has made the move following severe criticism from Prime Minister Sheikh Hasina in the last Ecnec meeting on July 31 over long delay in implementing the scheme.
Talking to The Daily Star yesterday, Industries Minister Dilip Barua said the government will take necessary action to relocate the tanneries outside the capital after getting the nod from the Ecnec.
Two associations -- Bangladesh Tannery Association and Bangladesh Finished Leather, Leather Goods and Footwear Exporters' Association -- will be the beneficiaries of the project, he added.
Bangladesh Tannery Association, noted the minister, has agreed to relocate their factories, but the latter has laid down some conditions to avoid relocation. “If the tanners want to do their business, they will have to relocate their units.”
The tanners, however, insisted that they would not go to Savar if the Ecnec endorses the second revised proposal without resolving their disagreement on some conditions of the MoU.
The draft proposal has recommended charging higher relocation fees from the factory owners and the government has failed to demarcate the land required for building workers' dormitory, complained tanners.
“As per the proposal, we [owners] have to pay at Tk376.15 per square feet (sft) now for the allotted plots ranging from 10,000 to 32,0000 sft in Savar. Earlier, the fee was fixed at Tk197 per sft,” said Belal Hossain, chairman of Bangladesh Finished Leather, Leather Goods and Footwear Exporters' Association.
“This is not acceptable as the higher charges will increase our relocation costs significantly,” he mentioned.
About 21,600 cubic metres of environmentally hazardous toxic waste, including chromium, sulphur and ammonium, is emitted daily from the tanneries, according to the Department of Environment.
Sources in the industries ministry said the factories could not be relocated in the last 10 years due to a wrangling between the government and tannery owners over bearing the project costs and a long legal battle between the two sides over awarding the CETP contract.
The industries minister said the delay in implementing the project is not only affecting the city  environment, but also threatening the country's leather and leather goods sector.
The European Union, the leading destination of the country's leather exports, has already threatened to stop buying Bangladeshi products beyond 2014 if the CETP was not established in the industrial zone by then, mentioned Dilip Barua.
The government has decided to provide Tk250 crore as compensation to the tanners for relocation and bear 80 percent of the total project cost, said project director Abu Taher.
The factory owners will have to pay the rest (20 percent) of the expenses in instalments over 15 years, he noted.
In this context, the Planning Commission has imposed a condition on the industries ministry to sign MoUs with the tanners for relocation of factories.
The industries ministry has already allocated more than 205 plots on 200 acres of land to 155 entrepreneurs through the BSCIC, a wing of the ministry.
The leather industry exported leather, leather products and footwear worth $980.67 million in the 2012-13 fiscal year, up from $765 million in the previous fiscal, according to data from the Export Promotion Bureau.