Article – Bangladesh govt sweetens deals for economic zones5 January 2015
10 December 2014
The Daily Star
The government plans to provide numerous tax benefits in the proposed five economic zones to attract both foreign and domestic investments.
The land developers and unit investors in the economic zones will get very competitive packages, said Paban Chowdhury, executive chairman of the Bangladesh Economic Zones Authority, adding that they would be better than those offered by the other countries in the region.
Incentives include tax holiday and duty-free import of vehicles, he said, adding that the investors will not need to pay income taxes for their employees for at least ten years.
Chowdhury’s comments came at a pre-bid meeting for the selection of a developer to design, build, finance, own, operate and transfer Mongla Economic Zone, held at Sonargaon Hotel in the capital yesterday.
The proposed economic zone would be built on a 0.83 square kiometres of land situated in close proximity to Mongla Export Processing Zone in Bagherhat district on a public-private partnership model.
The land will be leased by BEZA for a period of 30 years.
Six large national firms and four firms from India, China, Korea and Dubai have expressed their interest in participating in the bidding for development of the economic zone.
During the pre-bid meeting yesterday, Chowdhury assured the prospective bidders that the BEZA would not practise any red tape or bureaucracy.
BEZA will develop the off-site infrastructure. The tenders for approach road, administrative building, boundary wall and bridge have already been floated, with those for water supply, electric works and land filling on the way, according to Harunur Rashid, project director of BEZA.
The government will invest around US$6.41 million to develop the off-site infrastructure.
Economic zones are the newest version of export processing zones, Nazrul Islam, managing director of Infrastructure Investment Facilitation Company, said, adding that the government is focusing on the development of economic zones to bring in more private investment.
IIFC is a government-owned company that provides professional services to line ministries and agencies to develop infrastructure projects for private sector participation.
In export processing zones, only products for the export market can be manufactured, while in economic zones all types of goods can be produced.
The government will provide land and utility, while the investing companies will develop the infrastructure on their own, Nurannabi Mridha, executive member of BEZA’s Planning and Development division, said.
The main objective of the projects is to encourage local investors, attract foreign investors, improve the overall investment climate and generate employment, he said.
The government aims to develop five special economic zones in Mongla, Moulvibazar, Sirajganj and Chittagong’s Anwara and Mirersorai areas in the next two years.
All the five projects may create jobs for 15 million people by 2021. The five economic zones will be developed on approximately 36 square kilometres of land, according to the BEZA website.
Meanwhile, BEZA has already handed over the pre-qualification licence to AK Khan Company, the local conglomerate, for building a 0.81-square kilometre special economic zone in Narsingdi, the first under the private sector.
The development of the zone is expected to be complete by 2015, said Paban Chowdhury, executive chairman of BEZA.
Once completed, foreign investment especially from Japan will increase significantly, he said, while citing a recent survey of JETRO which said that Japanese investors are considering Bangladesh as their first choice for investment.
Courtesy of The Daily Star