DESPITE hectic orders and assurances of help from the government for relocating the hazardous leather industries from the capital’s Hazaribagh to Savar, almost nothing has been done due to capital constraints of the tanners. Environmentalists have been mounting pressure on the government to relocate the tanneries for several years as the site is among the world’s most polluted areas and it affects the health of the people living nearby and discharges around 22,000 cubic litres of toxic waste into the Buriganga every day. Aiming at the production of high quality leather products by maintaining ecological balance at the designated industrial park in Savar, the central bank on Sunday declared an incentive package for tanners to help them move the toxic factories. The initiative will hopefully speed up the relocation scheme and start production at the new site of this traditional revenue earning sector.
A notification of Bangladesh Bank said that tanneries which have already moved to Savar from the toxic tannery hub of Hazaribagh or are under the process of doing so will get an opportunity to shift their irregular loans into block accounts and will have eight years for repayment, with a one-year grace period. Tanners will be charged 10 percent interest on the loans in the block accounts or banks’ cost of funds — whichever is lower. An English daily said that the central bank also allowed the commercial banks to consider relaxation of the existing down-payments while rescheduling old loans or awarding new loans for tanneries engaged in exports. To take the incentives, tanners will have to begin the process of relocation within the next six months.
The central bank is encouraging the relocation of tanneries as part of its efforts to promote green banking. The central bank directive is also in line with the demands of the tannery owners. Thus it is naturally expected that it would accelerate the relocation process. To facilitate production of eco-friendly leather goods, the Industries Ministry has taken a project for setting up a central effluent treatment plant there by April 2015.
The leather industry brought home $1.29 billion in the last fiscal year. Exports of leather goods rose 48.55 percent on a year-on-year basis to $240.09 million during the period. For relocating the factories, setting up new plants and going into commercial production the tanners will have to invest around Tk 6,000 crore. It is assumed the central bank is fully responsive to the capital needs of the tanners.
We hope the green venture of the central bank will eventually speed up the long-waiting relocation process which will rejuvenate the city’s environment and boost up quality production to earn foreign currency by feeding the demand of leather goods in the international markets.
