Tannery relocation by 2016, Barua says
The government intends to complete the relocation of the hazardous tanneries from Hazaribagh to Savar by 2016, now that the dispute over who would bear the lion's share of the project cost has finally been resolved.
“I hope the tanneries will now speed up the relocation process,” Industries Minister Dilip Barua told reporters yesterday.
“The delay has not only been affecting the city's environment, it is also threatening the country's leather and leather goods sector,” he said, while citing the European Union's, the leading destination of the country's leather exports, threat to stop buying Bangladeshi products beyond 2014.
The project, which took off in 2003 with an approximate cost of Tk 175.75 crore, ran into a dead end over who would bare the lion's share of the costs and be given the central effluent treatment plant (CETP) contract.
Initially, it was planned that the 155 tanneries would finance 60 percent of the costs and the government the rest
Last week, it has been decided that the government would bear 80 percent of the core project cost: Tk 829 crore.
The government will provide Tk 663.4 crore, after the Executive Committee of the National Economic Council last week passed the second revised proposal.
The total project cost has spiralled 98 percent to Tk 1,079 crore over a decade since its launch. The figure includes Tk 250 crore in compensations to the tanneries, also to be paid by the government.
“We will set up the entire infrastructure including the CETP within the next 18 months,” Barua said.
The factory owners will now have to pay only Tk 165.6 crore in instalments, according to the industries minister.
The relocation of the tanneries, however, still remains uncertain as the factory owners are yet to sign the memoranda of understanding with the government, due to their discontent with the allotment costs.
The tanneries will now have to pay at Tk 376.15 per square feet (sft) for the allotted plots ranging from 10,000 to 32,0000 sft in Savar, which was originally fixed at Tk 197 per sft.
“This is not acceptable as the higher charges will increase our relocation costs significantly,” Belal Hossain, chairman of Bangladesh Finished Leather, Leather Goods and Footwear Exporters' Association, told The Daily Star recently.
The industries ministry, however, has already allocated more than 205 plots on 200 acres of land to the 155 tanneries.
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.
The sector's exports in fiscal 2012-13 stood at $980.67 million, up 28.2 percent from the previous year, according to data from Export Promotion Bureau.