Hazaribagh – ten years on and still no relocation

Bangladesh
Published:  04 August, 2013

Ten years have passed since the Bangladesh government decided to relocate tannery industries from the capital’s Hazaribagh area to a separate leather zone at Savar.

But by the time the tannery industries have wrecked a havoc on the environment of the area and the ecology of the Buriganga River, which is considered to be the lifeline of the Dhaka city.

The Department of Environment reported 22,000 cubic metres of raw and liquid waste from tannery units in Hazaribagh flow into the Buriganga, where the oxygen levels are close to zero instead of the minimum 6% required for aquatic
species.

More than 100 tonnes of solid waste, including dregs of finished leather, skins and chemical dust are dumped into the river.

More than 200 factories in Hazaribagh have been supplying raw materials for 58 years to Bangladeshi leather factories, currently earning an estimated Tk55bn (US$708 million) per year.

Relocation of tanneries from the capital to Savar has remained suspended for a decade due to disagreement between the authorities concerned and tannery owners over the bearer of cost.

Tannery owners are unwilling to pay for relocation and the setting up of a central effluent treatment plant (CETP) at the proposed site in Savar, 15 kilometres away from the existing site.

They reasoned the fivefold rise of the estimated cost for the project in the last decade and the government was originally responsible for the costs associated with relocation.

Recently, the government decided to pay the relocation cost of Tk2.5bn (US$3.2 million) demanded by the tannery owners.

The industries ministry, that took the project in 2003, would sign a Memorandum of Understanding (MoU) with Bangladesh Tanners Association and Bangladesh Finished Leather and Leather Goods Exporters Association soon to start implementation of the project.

As per the recent development, 20% of the CETP cost will be collected from the factories in 15 years at an interest of 5% annually. The rest (80%) will be given by the government as equity.

“The government has fulfilled the long-standing demand of the tannery owners for compensation and setting up the high-tech CETP,” said Abu Taher Khan, project director of the Leather Park.

“We hope all the factories will relocate their tanneries now as the barrier has almost been removed,” he added.
Abdul Hai, secretary general of Bangladesh Finished Leather and Leather Goods Exporters Association, told the Dhaka Tribune that they would move from the present location after completing the CETP establishment in the proposed site.

The relocation project will cost a total of Tk10.28bn (US$13.2 million), of which Tk2.5bn (US$3.2 million) will be spent as compensation, Tk6.39bn (US$8.2 million) on CETP and Tk1.39bn (US$1.8 million) on infrastructure facilities.

With an aim to relocate the tannery factories from the capital’s Hazaribag to a separate leather zone at
Harindhara, Savar, the Bangladesh Small and Cottage Industries Corporation (BSCIC) took the project in 2003.

It has already sanctioned 200 acres of land for this project. When the project started, Tk1.1bn (US$1.4 million) was spent on works like land filling, water treatment and power plant.

Meanwhile, the government on March 11 last year given the work order to JLEPCL-DCL, a joint venture Chinese firm, to set-up CETP with a cost of a around Tk4.8bn (US$6.1 million).

Allegation surfaced that Industries Minister Dilip Barua had illegally favoured the contractor in violation of the terms of the agreement signed between the government and the contractor.

Dilip Barua allegedly forced the project authorities to disburse Tk74.7m (US$962,000) in advance to the Chinese company though the provision of disbursing any fund in advance to the contractor is absent from the agreement.

The agreement clearly states until and unless 15% work is completed, no money cannot be disbursed to the company assigned for the job.

“Minimum amount of progress bill should be 15% of total civil works which will include 80% Pro-rata against individual unit of works completed as per Bill of Quantities certified by the Project Manager,” according to the mode of payment written in the agreement.

An official of the project, seeking anonymity, said the minister frequently puts pressure on them to pay the mentioned amount of bill which is clearly a violation of the agreement.

He also has not consulted with the ministry’s purchase committee though the decision should come from there, the source added.

When asked, Dilip Barua denied the allegation and said they did not disburse any money to the contractor as the project is yet to get approved in the Executive Committee of National Economic Council (Ecnec).

The minister who appeared to be the middleman for the contractor firm also exempted the firm from verification of the Detailed Engineering Drawing and Design of the CETP by Bangladesh University of Engineering and Technology (Buet) on September 2 last year which was compulsory as per the agreement.

The ministry document says the verification would be carried out by the BSCIC instead of the Buet.

On October 22 last year, ministry Secretary Mohammad Moinuddin Abdullah, however, scrapped the decision and reassigned Buet to do the job.

The CETP installation company JLEPCL-DCL is now sitting idle with the work order as the proposed project is awaiting Ecnec approval. 

Source: Dhaka Tribune

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