$1.13b project planned to boost logistics at Bangabandhu Shilpa Nagar

The Bangladesh Economic Zones Authority (Beza) is initiating a $1.127 billion project to enhance logistics facilities, including multimodal connectivity, at Bangabandhu Sheikh Mujib Shilpa Nagar, the country's largest industrial zone in Chattogram.

The project aims to transform it into a climate-resilient smart industrial zone with associated infrastructure and renewable energy facilities, including comprehensive road connectivity, a logistics hub with jetties, utility infrastructure, and an intelligent transportation system, according to Beza officials.

The objective is to complete the logistics development by 2030, after which the zone, situated in the Mirsarai-Sitakunda-Sonagazi area of Chattogram and Feni districts, will be fully operational.

However, businesses have expressed concerns following a government decision that factories outside economic zones or designated areas, such as BSCIC, will no longer receive utility connections and banking services. This decision has raised apprehensions, given that Bangabandhu Shilpa Nagar will not be fully functional for another six years.

The World Bank has given preliminary consent to establishing logistical facilities in the industrial zone. The final decision from the multilateral lender will be made after the feasibility study and design formulation, with which the global lender will also assist, officials said.

Beza Executive Chairman Shaikh Yusuf Harun told The Business Standard that plans are underway to construct three jetties in the industrial zone. One will be built by the Bangladesh Inland Water Transport Authority, while the other two will be constructed by private investors, he said.

"We have specified areas for this purpose, which will include container terminals along with the jetties. There will be multimodal connectivity, integrating railway, road, and sea routes," he explained.

He said the multimodal connectivity project will be funded by the World Bank. "We have discussed this issue with the World Bank regarding the logistics hub of this industrial city. The World Bank has agreed to finance it."

The Beza officials said through multimodal connectivity, the jetties established in the industrial zone will facilitate sea routes to connect with the Chattogram port and other ports. Besides, railway and road connections will link the industrial zone with the Dhaka-Chattogram railway and highways.

Funding from development partners

According to the preliminary feasibility study, $1.025 billion will be sourced from development partners.

Beza aims to start investment activities in logistics soon after completing preparatory work, including reviews, within the next year.

A proposal has been sent to the Prime Minister's Office for approval to take up the project, a senior Beza official told TBS.

Why is developing logistics important?

Bangabandhu Shilpa Nagar is being established on 33,407 acres of land equivalent to around 133 square kilometre, and 16,729 acres have already been acquired by Beza, and land development work is in progress.

Beza has so far approved investments for 152 units in the industrial zone, allocating more than 5,251 acres of land collectively. The companies have already invested $1.23 billion. They have proposed to invest over $18 billion, with the expectation of creating job opportunities for 775,228 people.

According to the project documents, Beza's commitment to environmental sustainability will be a central focus of this project, as it will incorporate eco-friendly design and construction practices, green and climate-resilient infrastructure, utilities, and the utilisation of cutting-edge technology to make the Bangabandhu Shilpa Nagar smart, competitive, efficient, sustainable, and minimise its ecological footprint.

Beza aims to establish 100 economic zones by 2041, with the goal of creating employment for 10 million people. This initiative is part of the government's strategy to organise industries within designated areas, providing comprehensive services under one umbrella.

Initially, Beza targeted the completion of these 100 zones by 2030, but the timeline has since been revised to 2041. So far, Beza has approved 97 economic zones, 11 of which, including eight in the private sector, are already in production.

Investors welcome the move

Berger Paints Bangladesh is already considering investing in Bangabandhu Shilpa Nagar. Rupali Chowdhury, managing director of the multinational company, told TBS that if a logistics hub is established in the industrial zone, the time required for loading and unloading goods for all the companies will be reduced.

"Goods transportation will be facilitated through the use of sea, road, and rail. This will increase the competitiveness of the companies. The lead time for product delivery will decrease. Attention should be paid to ensuring that the benefits of the logistics hub are realised quickly," she said.

Aparup Chowdhury, chief executive officer of the Bangladesh Economic Zones Investors Association, said the logistics hub will play a crucial role in facilitating business operations. It will contribute to the development of an advanced transportation infrastructure.

Mahbubul Alam, president of the Federation of Bangladesh Chambers of Commerce and Industry, said investments are now flowing into the industrial zone, which requires logistics development.

"But this development must be expedited, and there should be no delay in implementing the project aimed at achieving this goal," he continued.

During his recent budget speech, Finance Minister AH Mahmood Ali said, "The National Logistics Policy 2024 has been approved with the aim of enhancing the capability of domestic and international trade and investment to achieve sustainable and inclusive economic growth by developing efficient, timely, cost-effective, skilled, and environmentally friendly logistics systems."