The Ministry of Finance has rejected a Tk3,000cr proposal from the Bangladesh Economic Zones Authority (Beza) to acquire land, saying that private capital be raised for it.
The ministry suggested the creation of a Bangladesh Bank fund to raise private capital, explaining that it had declined to allot the funds in order to maintain fiscal discipline, official sources said.
The decision was made at an inter-ministry meeting at the Finance Division office last week after the Prime Minister’s Office sought Tk2,917cr in urgent allocation from the Finance Division to acquire land to set up the five economic zones under Beza.
The meeting was presided over by Additional Secretary of Finance Division Jalal Ahmed.
The Prime Minister’s Principal Secretary Abdus Sobhan Sikdar told the Dhaka Tribune yesterday: “It may put massive pressure on this year’s budget to provide nearly Tk3,000cr for Beza, so we will take an alternative path.”
“We will amend the economic zone investment policy to allow private sector firms that have three years’ experience to develop the economic zones,” Sobhan said.
In some cases funds from the government exchequer will not be required, he said.
The PM’s principal secretary said: “Japanese investors are keen on developing economic zones surrounding Dhaka city, but the government wants to provide 8,000 acres of land at Mirsarai in Chittagong.”
Korean investors have developed 500 acres of land at the Korean Export Processing Zones (KEPZ) out of the 2,492 acres of land allotted to KEPZ 16 years ago, he added.
He said: “The rest of the land allotted to the KEPZ will be given to other foreign investors interested in developing export processing zones.”
Meanwhile, an official of the Finance Division said it had already asked Beza to start talks with the authorities about financing the development of the economic zone sites.
It called for Beza, the Financial Institutions Division and Bangladesh Bank to work together to set up the fund.
According to the decision last week, loans from local commercial banks will not be viable for Beza since their interest rates are so much higher than foreign banks.
The meeting decided that state-owned commercial banks would guarantee any foreign loans that Beza takes.
Of the total Tk2,916cr Beza has sought, Tk2,700cr is for the development of economic zones at Mirsarai in Chittagong, Gohira in Anowara of Chittagong and Moulvibazar in Sylhet.
The remaining Tk216cr is to acquire land in Mongla and Sirajganj.
The Mirsarai, Anowara and Moulvibazar zones are 6615.12 acres, 611.47 acres and 354.99 acres in area, respectively.
The five zones are Sirajganj, Rajshahi, Mirsrai of Chittagong, Gohira in Anowara of Chittagong and Moulvibazar in greater Sylhet.
At the first Beza board meeting held on April 18, 2012, the body, headed by the prime minister, decided to establish five economic zones in the country within the next two years.