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State of industrial townships in Bangladesh

M S Siddiqui
29 Mar 2023 00:00:00 | Update: 28 Mar 2023 22:42:07
State of industrial townships in Bangladesh

Bangladesh Small & Cottage Industries Corporation (BSCIC) has 94 industrial estates in Dhaka, Chattogram, Rajshahi and Khulna divisions. The construction works for several estates including special types like Tannery, API (Active Pharmaceutical Ingredients) and Garments Parks are under execution. The Tannery estate at Savar is still incomplete as BSCIS could not complete Effluent Treatment Plant in the last 19 years.

Bangladesh policymakers have an idea that industrial estate means some plots for setting up industries. Some of the planners who have experience working during the Pakistan period are now retired from the service. There were some examples of industrial estates set up by the East Pakistan Industrial Development Corporation (EPIDC). EPIDC has set up a few hundred industries throughout the area of Bangladesh and those were designed to make these small townships with facilities for entrepreneurs and employees.

The status of existing estates is in a dismal condition due to the wrong design and selection of location and planning for logistic services. A report by the Bangladesh Institute of Development Studies (BIDS) sheds light on the challenges the BSCIC estates have been facing over the years. The study conducted between September 2017 and March 2018, is the first such study to identify problems since BSCIC started its journey in 1957. The report said that except for a few BSCIC estates, all are facing severe waterlogging due to poor maintenance of the existing drainage system. Even the poor boundary walls, are a major concern for industry owners and employees who need to protect their equipment and goods. Streetlights too are not available in most of the estates, deteriorating security.

The report also said the absence of a dedicated gas and electricity supply connection and red tape hamper the proper functioning of the industrial units. Almost all of the estates have an electricity connection while only 57 per cent of the estates have a gas supply connection. About 80 percent of the estates have water supply facilities.

It also said around 22 per cent of BSCIC industrial plots have remained unutilized year after year. Weaknesses in rules and regulations, problems in the selection process, and infrastructure bottlenecks were the key reasons behind the plots not being used. Other factors included a weak selection process of entrepreneurs for the plots and corruption of BSCIC officials.

An industrial city or industrial town or industrial estate refers to a self-dependent industrial cum residential establishment. It is centred around industries and other production facilities in the town with facilities for the employees to live. It has been part of most countries’ industrialization process and the foundation of urbanization.

The optimum use of industrial townships can be achieved through the strategic placement of township components with all sorts of logistics. These are three models: (1) industry should be surrounded by a township, where industrialization is in the primary stage like Bangladesh (2) Industry adjacent to the township, where industrialization has taken momentum. industrial zones are located close to communities but are separated by office, research or educational activities, and (3) Industry integrated with the township. Industrial programs are enhanced by non-industrial uses. This typology is common in more developed countries where the value is generated by the co-location of knowledge-intensive activities together with manufacturing. The co-location of different components of the production process optimizes business efficiency and close proximity to urban and research activities increase the value of industrial land.

The implementation of integrated industrial townships also comes with some challenges, such as urban and industrial traffic conflicts, environmental risks, and difficulty to attract employees in the early stages of development.

Regarding traffic solutions: Two strategies can be utilized to minimize traffic conflicts between industry and townships. The first one focuses on consolidation. Taking the experience of an industrial park in Singapore, logistics operations were amalgamated into one central hub above an expressway. This not only allows greater efficiency for the handling of goods and for land optimization but also focuses industrial traffic in the expressway to avoid transports passing through residential areas. The second strategy promotes the separation of traffic modes to guarantee safety. This is used as an innovation park development in Vietnam, where industrial and urban traffic is completely segregated through the design of multi-way boulevards to serve different vehicular flows.

Regarding environmental solutions: Pollutive and undesired activities can be separated from higher-value areas through innovative land use solutions and multi-functional green belts. Residential activities can be buffered from industries by uses such as commercial, R&D and open space, which also contributes to the living environment of communities.

Regarding thriving communities: The first challenge that investors often face is how to increase the vitality of the residential component in integrated industrial townships since most of them are far from existing urban areas. To deal with this issue, the industrial township may target two-fold: to introduce density into the development, and to bring in amenities and focal points. Density can be achieved by planning for different housing products, which can create the critical mass able to bring vibrancy into a place. Attractive facilities, such as sports hubs, community centres and central parks, act as destinations and serve both communities and visitors.

To optimize the benefits of an industrial township, the placement of the township vis-à-vis industrial activities to enhance land value for the developer should be (1) horizontal and vertical integration of industrial and non-industrial components to concentrate the manufacturing value chain in one place and (2) provide an amenities-rich residential community for workers near the workplace. To minimize challenges, action may be taken to: (1) Separating industrial activities from the residential community through multi-functional buffers, (2) create zoning and multi-function green buffers and (3) varied and strategically-located housing options, with attractive recreational amenities.

The situation is different in Bangladesh. Adamjee Jute Mills was set up by Abdul Wahid Adamjee, Pakistan’s foremost industrialist. It was established in Narayanganj in 1950 and was the first jute mill in East Pakistan (Bangladesh). Gradually, the mill became the largest jute mill in the world, exceeding the jute mills of Calcutta, India, and Dundee, England. This Jute mill was a model-independent industrial town having residential facilities for officers and workers, schools, colleges, mosques, clubs, markets etc.

The mills were nationalized after the independence of Bangladesh in 1972. It was operated by the Bangladesh Jute Mills Corporation before being closed down in 2002. Later, the government formulated a different plan forced by WB for the closed jute mill and gave it the shape of an export processing zone. WB made it a condition to disburse the loan to the closure of loss-making industries.

Later in 2006, the Adamjee Jute Mills area was transformed into the Adamjee Export Processing Zone (EPZ). The zone generated job for 62,200 persons in FY2019 according to data provided by the Bangladesh Export Processing Zone Authority (BEPZA). Around 65% of the workers are women. More than 200 foreigners were also among the employees.

In the last 14 years, 245.12-acre Adamjee EPZ significantly contributed towards increasing export earnings and providing work opportunities. According to the Bangladesh Export Processing Zone Authority (BEPZA), the flow of investment in Adamjee EPZ rose to US$521.93 million by June 2019. The total amount of export earnings from the Adamjee EPZ was US$ 4483.67 million in the year of FY2019.

After so many years, BEPZA is now planning to found a high-standard school inside the EPZ, in addition to an existing primary school. Besides, a project proposal has been sent to the Prime Minister’s Office (PMO) for providing safe and quality housing to around 200 non-Bangalees workers on a land of around 50 acres inside the EPZ. The project will be implemented under the much-appreciated Ashrayan Project undertaken by the PM.

A medical center has been constructed inside the EPZ with modern facilities, including ECG equipment, ambulance service and so on. The authorities have permitted a high-quality restaurant inside the EPZ under private ownership taking into account the people involved in various businesses that have sprung up centering the industrial zone. The restaurant has been in operation for the last few years.

Bangladesh’s government initiated setting up 100 free trade zone and some export processing zones are mostly for overseas investments. They are offering only land for industrial buildings except for some facilities designed for Banglabandhu industrial park. These zones are facing competition from similar FTZs in other countries to attract overseas investment.

Other countries provide an institutional framework, modern administrative services and a physical infrastructure that are not available in our industrial zones. The zone must be designed to meet the needs of industrial enterprises, entrepreneurs, employees and their families.

The basic working principle is to integrate the ecological, social and economic aspects of sustainability in all sectors and enables its residents to live a quality life. Overseas investors need a club and other facilities for their nightlife.

Bangladesh is at the primary stage of industrialization. All the industrial estates, export processing zone and free trade zone should be surrounded by residential and educational institutes and occasional institutes, shopping malls and other recreational facilities to meet the demands of all the stakeholders. These industrial towns are independent of all amenities of residents and entrepreneurs.

The writer is a legal economist. He can be contacted at [email protected]

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