The government has given Tk47 crore to Bangladesh Economic Zones Authority (BEZA) as interest-free loan to acquire land and develop site for the Mongla Port Economic Zone.
The money was given from the current budget as non-development expenditure.
The budget amounts to Tk16,911 crore is traditionally used to give credits to Bangladesh Power Development Board, Bangladesh Petroleum Corporation and the government employees.
However, Finance Minister AMA Muhith has discouraged the interest-free loan to BEZA which, according to him, would earn through leasing out of its lands and infrastructure, and
so be able to repay the loan with interest.
As BEZA will do business, “It’s illogical to give the loan interest-free,” said the minister as quoted in the Finance Division’s loan summary.
Mongla, the south-eastern part of the country, is expected to be an economically vibrant area if the proposed Padma Bridge is constructed.
The zone will be developed on a 205-acre land of Mongla Port Authority.
Meanwhile, BEZA decided to continue the development works of Mongla port economic zone taken under a World Bank project as the global lender recently cancelled a grant.
The World Bank withdrew the US$80m grant from the Bangladesh Private Sector Development Support Project due to a wrong detailed project plan (DPP).
The Bangladesh Economic Zones Act 2010 provides for private investments in developing economic zones in Bangladesh.
Mongla Port economic zone is the first venture after the BEZA was constituted through a parliamentary law in 2010.
The formation of BEZA was the result of a decision in 2010 by the Prime Minister’s Office to develop five economic zones within the cost of about Tk1,400 crore during 2012-13 and 2013-14 fiscal years.
A BEZA official said the success of its first venture would be a breakthrough in utilizing the unused land of both government and private owners.
Apart from it, the authorities also selected land at Anowara and Mirersarai in Chittagong and in Sirajganj and Sherpur to be developed under the public-private partnership (PPP) initiative.
But it has so far failed to acquire a single part of land because of the lack of fund.
In 2010, former country director of World Bank in Bangladesh, Ellen Goldstein said the global lender would help set up 15 to 20 new private economic zones in Bangladesh with a total capacity to accommodate 500 to 700 new companies or expanded units of existing ones by 2021.
