RMG-exclusive zone plan does not get off the ground two decades on

Two decades after 1978, which marked the inception of the country's Readymade Garments (RMG) industry through Desh Garments at Chattogram's Kalurghat Bangladesh Small and Cottage Industries Corporation (BSCIC) area, businessmen agreed on establishing an RMG-exclusive village.

Over 20 more years have passed since then, but the proposed RMG hub, initially planned at the same Kalurghat industrial area, is yet to see the light of day.

In 2013, following the Rana Plaza tragedy, the demand for establishing the RMG village was further intensified. Later in January 2016, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) signed a memorandum of understanding (MoU) with Chittagong City Corporation to build the garment village on 11.551 acres of land at Kalurghat in the city. But that initiative did not go any further.

BGMEA leaders say they backtracked due to the high construction expenses and increased land price at the proposed site.

If the plan is to be revived, places such as Hathazari, Anowara or Patia in the suburbs or outskirts of the city would be ideal, they said.

"Construction costs are much higher in the industrial areas close to the riverbank. To build a quality infrastructure for a garment factory, piling up to 140 feet is required. Due to these reasons the construction cost has doubled," BGMEA engineer Main Uddin told The Business Standard.

"Factories should be set up in industrialised zones, not in residential areas. If you want to build an industrial village, you have to go out of town now," he added.

Syed Nazrul Islam, first vice president of BGMEA, told The Business Standard, "Land price is too high in Chattogram, which is the main obstacle to establishing industries in the port city."

According to him, the project did not move forward due to the excess cost in construction.

"Many factory owners, at the time, provided funds in advance on a short-time notice," he added.

According to BGMEA sources, beginning in 1977, the RMG industry flourished in Chattogram thanks to the port facilities. In over four decades since then, some 750 RMG factories have sprung up across the city. Until the outbreak of the pandemic, some 20 factories grew in the city every year, with Chattogram accounting for 40% of the total output of the RMG industry. However, the factories in the port city did not get much attention regarding further development. Currently nearly 4 lakh workers work in some 350 RMG factories. 

According to the MoU, signed between the BGMEA and the CCC, 10 seven-storey and one utility buildings were planned. With 20,000 square feet area per floor, if completed the garments village would have a total area of 1,40,000 square feet. For this project the BGMEA was supposed to make a one-time payment of Tk140 crore to the CCC. A monthly rent of Tk16,80,000 was expected at a rate of Tk12 per square feet.

Initially the construction cost was estimated at Tk2200 per square feet. However, the estimated cost shot up multiple times taking into account demands from the BGMEA for the installation of central ETP, central generator, central boiler and central electric and fire protection mechanisms. Some Tk500 crore was required to implement the project and the CCC faced difficulties in securing loans due to the disparity in limited profit against excessive expenses. As a result, the initiative never progressed any further.

According to Alliance and Accord, the two coalitions of international RMG buyers, there is no alternative to building RMG-exclusive villages to keep the industry alive. To ensure the safety of workers, factory infrastructure has to be built in accordance with specific codes and guidelines, including the installation of electrical and fire safety measures.

"Uninterrupted supply of electricity, water and gas is required for garment factories, and this requires a specific zone, which is common in many countries," Nasir Uddin Chowdhury, former vice-president of BGMEA, told The Business Standard.

"We do not have a definite plan here. Besides, a large area is needed to build an industrial village with state-of-the-art facilities. Good communication with the port is also essential," he further pointed out.  

"It is hard to find such a place in Chattogram these days," added Nasir Uddin.