Biggest FDI for state-of-the-art shipyard in Patuakhali proposed

With a finance proposal of Tk14,000 crore in foreign direct investment, the biggest of its kind, the government is one step closer to realising its plan to build a state-of-the-art shipyard near the Payra seaport in Patuakhali. 

Representatives from Singapore and Australia-based Gentium Solutions and Netherlands-based Damen Shipyards Group have presented the project proposal at a meeting with Industries Minister Nurul Majid Mahmud Humayun at his office on Monday.

The Gentium-Damen delegation also handed over a feasibility study report – Developing a World Class Shipbuilding and Ship Repair Facility (WCSBF) in the Patuakhali District, conducted by EY India – to the industries minister, said sources at the ministry.

The report says Gentium-Damen will support the government's project by building high quality vessels in the country for the export market. Transfer of technology for specific areas of the shipbuilding process will be incorporated in dedicated and allocated shipbuilding projects at the facility.

As the shipbuilding industry is labour intensive, the WCSBF is expected to generate regional and macro employment opportunities. Thanks to the entry of industry experts like Gentium, Damen and their training programmes, the workforce in Bangladesh will have enhanced skills.

The project will contribute to developing a reliable and competitive supply chain which will produce top-notch vessels to compete in the global market, says a press release of the ministry.

"Damen is the leading ship building company in the world with 35 shipyards under their name around the world. The shipyard planned in Patuakhali will be their 36th," Gentium Solutions Advisor Md Kaikobad Hossain told The Business Standard last night.

"We presented our proposal to the government today [Monday] and are expecting the deal to be finalised within the next three-four months," he said.

"We had inked the agreement with the government on 14 January 2020. Then we hired EY India to conduct the feasibility study. The study took two years to finish," Kaikobad said.

He added that following the final nod, the Gentium-Damen consortium will move towards land development, which will roughly take up to three years.

"During land development, shipbuilding works will also go on through renting shipyards at Khuna and Chattogram," he added.

Damen plans to generate $2 billion of the global shipbuilding market of $200 billion from the Patuakhali shipyard and export vessels to 17 countries – which will play a vital role in the economy of Bangladesh.

"Damen, which has 90 years' experience in shipbuilding and 6,000 ships under its belt, has picked Bangladesh because of the availability of cheap labour," said Kaikobad.

"Once the proposed project is finalised, the Ministry of Industries or the Bangladesh Steel and Engineering Corporation will procure land in the area adjacent to the Payra Port," Minister Nurul Majid Mahmud Humayun said.

He added that the government will extend all cooperation in setting up a world-class shipbuilding factory.

Prime Minister Sheikh Hasina, during a visit to Patuakhali in 2014, announced the construction of a shipbuilding facility in the southern district.

In January 2020, an agreement was inked between the Bangladesh Steel and Engineering Corporation and the Gentium-Damen Consortium Group after the latter proposed funding the project.

On Monday, the consortium made the official proposal for a Tk14,000 crore investment in the project.

The government has already allocated some 101-acre land close to the Payra port for the project.