Indian Economic Zone land development in Mirsharai uncertain

Two pre-qualified Indian contractors—Adani Ports and Special Economic Zone Limited and International Seaport Dredging Private Limited—have declined to take part in the land development work for the Indian Economic Zone project in Mirsharai, Chattogram.

Bangladesh issued a request for proposals for this land development work to these two companies on 27 August last year. However, after purchasing the tender documents, the companies notified Bangladesh on 28 February this year that they could not submit tenders.

Given the difficulty in finding suitable Indian contractors, the Bangladesh Economic Zone Authority (Beza) plans to reissue the tender, making it open to both Indian and Bangladeshi contractors through an open bidding process.

Although a proposal seeking India's approval for this change was made, India has yet to respond positively. Beza has now sent a revised project proposal with increased costs to the Prime Minister's Office.

At a meeting on 23 June chaired by former prime minister's principal secretary Tofazzel Hossain Miah, the project's implementation status was reviewed.

Beza and the Economic Relations Division were directed by the Prime Minister's Office to secure consent from Indian authorities to include Bangladeshi contractors in the re-tendering process, according to the meeting minutes.

The main goal of the Indian Economic Zone project in Mirsharai is to develop infrastructure on about 900 acres in the Bangabandhu Sheikh Mujib Industrial City to attract Indian investors. On 11 June 2020, India approved $115 million in principle under the third line of credit to support the project.

Approved by the Executive Committee of the National Economic Council (ECNEC) in April 2019, the project was initially set to be completed by 30 June 2021. Due to delays, the deadline has been extended to 30 June 2025.

The project, with a total cost of Tk919.85 crore, includes Tk5.26 crore from the government of Bangladesh and Tk914.59 crore in project aid. As of May this year, Tk5.98 crore has been spent, including Tk3.43 crore from the government and Tk2.55 crore in project aid.

The revised proposal sent to the Prime Minister's Office suggests increasing the project cost to Tk2003.59 crore, with Tk738.59 crore from the government and Tk1,265 crore requested as project aid.

The re-tendering process for the land development work needs to begin, but following the traditional method of shortlisting pre-qualified Indian contractors through the Export-Import Bank of India will take significant time.

Additionally, there is uncertainty about finding suitable Indian contractors interested in the work.

At the India-Bangladesh Joint Working Committee meeting in New Delhi on 23 April, Bangladesh requested that Indian authorities allow Bangladeshi contractors to participate in the re-tendering process. However, India has not yet agreed.

The meeting concluded that the re-tendering process should start, and the project proposal should be amended after receiving feedback from the Indian authorities.

The project director, Md Mokhlesur Rahman, told TBS that they are waiting for India's consent to allow Bangladeshi contractors to participate in the land development work. "If India consents, we will invite re-tenders," he said.

An official from Beza said that if India does not provide new contractors or allow Bangladeshi contractors to submit tenders, Beza will withdraw from the government-to-government agreement for this economic zone.

"There is high demand for land in the Bangabandhu Sheikh Mujib Industrial City, and prices are rising daily. We won't wait indefinitely for India. If India doesn't move forward with this project or allow Bangladeshi contractors to participate, Beza will be forced to cancel the agreement and develop the land for Bangladeshi investors," the official added.