Around 500 new plants including more than 250 textile and readymade garment (RMG) units are in trouble due to non-availability of gas and electricity connections, said industry insiders.They said the average investment in each industrial unit is not less than Tk. 50 crore, totalling an investment of Tk. 25,000 crore in the new plants. And the investments also factor in periodic credit for machinery, land and other requirements. They said most of the new plants have remained idle for the last couple of years as they lack essential utility connections.
Added to the problem is a marked increase in interest rates for bank loans, they said.
Talking to The Independent, frustrated entrepreneurs alleged a “breach of commitment” by several government agencies that are supposed to provide them gas and electricity connections.
“It is a breach of commitment by some government agencies. I have cleared all payments to Titas Gas Distribution and Transmission Company Ltd (TGTDCL) for supply of a specific quantity of gas. But, I do not have the connection yet,” said an entrepreneur, preferring anonymity, who is the owner of one of the new industrial units.
“I am quite frustrated. I do not know what to do at this stage,” he said.
Many entrepreneurs have deposited money in the government treasury for gas connections as directed by the TGTDCL authorities; but the government has imposed an embargo on new industrial connections, he pointed out and added that the embargo has jeopardized the functioning of the new plants.
Rupa Group (garments) managing director Shahidul Islam said some successful entrepreneurs, who have diversified into new projects, are under great pressure from banks for repayment of loans taken for new projects and for new investments in old projects.
“I took a bank loan of Tk. 21 crore for my new project, which now stands at over Tk. 30 crore with over Tk. 1 lakh being added to the principal credit every day,” he said. He has sought loan rescheduling and waiver of interest rates for the period starting from the date of loan released by the bank till availability of gas connection.
“For the new project of Tk. 60 crore, I had to manage the rest of my capital from other enterprises. But the situation has worsened so much that my old enterprises are about to become sick,” he added.
An entrepreneur in the RMG sector for the past 17 years, Islam said he had paid all necessary tariffs to TGTDCL in May 2009 as required of him.
“But, in January 2010, I learnt about Titas Gas’s sudden decision not to provide gas connection to any industry,” he said.
Islam also said he had started work for his new plant in November 2008 after getting necessary approvals from the government. His financers had confirmed the approval to his loan application, after examining his documents, including approvals for gas and electricity connections, he added.
TGTDCL managing director Abdul Aziz Khan told The Independent that the company has prepared a list of new enterprises seeking new industrial connections. He added the agency can’t help the entrepreneurs unless the government lifts the embargo on providing new connections. “A committee, headed by energy and power affairs advisor to Prime Minister, would take a decision on the matter. I can’t give any timeframe [for providing connections] at this time,” he said.
“However, the committee may decide something after the dry season, considering the necessity of industrial expansion,” he added. Former president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Abdus Salam Murshedy, said entrepreneurs of new RMG plants have already imported machinery worth Tk. 5,000 crore in the past couple of years.
News Source:
The Independent