Desk Report,
National Special Economic Zone: Water demand in industry increasing, projects stalled
An initiative was taken to implement a project three years ago to supply water from the Meghna River to the ‘National Special Economic Zone (NSEZ)’ located in Mirsarai, Chittagong. The feasibility study of the project has not yet been completed due to lack of agreement on water demand and price. Construction work has not even begun. However, the demand for water is increasing in that industrial area.
National Special Economic Zone: Water demand in industry increasing, projects stalled
The project, which is based on public-private partnership (PPP), received in-principle approval in August 2022. The feasibility study began the following year. Although the work was supposed to be completed in four months, the deadline has now been extended several times and the time has now been set to December.
It is learned that despite multiple meetings between Chittagong WASA, Bangladesh Economic Zone Authority (BEZA), Ministry of Local Government, PPP Authority or PPPA, Korean lenders and investors, the price of water has not been finalized. It has not been possible to determine the level of demand. The latest meeting was held on June 25. Although the consulting firm initially proposed a price of 91 taka for 1,000 liters of water, it will reach about 120 taka when other costs are included. Various industrial establishments have expressed their reluctance to buy water at this price. Modern Syntex Limited has set up an industrial plant on 20 acres of land in NSEZ. The company’s General Manager, Sufal Barua, told Prothom Alo, “Our factory requires 25,000 to 50,000 liters of water per hour. Currently, water is being collected through BEZA and its own management. The average cost of water consumed is 32 taka. However, purchasing water at a higher price will significantly increase the production cost. This will make it difficult to survive in the international market.”
According to the NSEZ water supply project document, the project proposal has set a target of supplying 250 million liters of water daily in the first phase and another 250 million liters in the second phase. The work on the first phase was supposed to start in January 2024 and the first phase was supposed to be completed by 2027. The work on the second phase was supposed to start in January 2028 and be completed in December 2031. But since the work did not start on time, there are concerns about the project being completed on time.
The government cost of the project is estimated at Tk 1,600 crore and the private cost at Tk 8,953 crore. The government will pay for land acquisition, river management and compensation, and the private will build the refinery and pipeline. The private partner is Korea Overseas Infrastructure and Urban Development Corporation. The lender is Korea’s Exim Bank.
Regarding the progress of the project, PPP Chief Executive Muhammad Rafiqul Islam told Prothom Alo that the construction of the project will not start until the demand and price are determined. After the issues are finalized, a memorandum of understanding will be signed between WASA and BEZA and work will begin immediately after receiving the final feasibility report.
15 companies in production, water demand is also increasing
This economic zone is being developed along the Sandwip Channel, a coastal area of the Bay of Bengal. According to the BEZA master plan, the area of the NSEZ built around Sitakunda and Mirsarai in Chittagong and Sonagazi upazilas in Feni was initially 33,805 acres. However, BEZA has decided to reduce this area. They have set an area of 7,000 acres in the first phase, 10,000 acres in the second phase and 4,000 acres in the third phase, meaning that various establishments will be built on a total of 21,000 acres.
BEZA sources said that this industrial city was inaugurated in 2016 under the name Mirsarai Economic Zone. BEZA started accepting applications for land allocation there in April 2017. Currently, 15 industrial enterprises are in production. Construction work of 27 more enterprises is underway.
BEZA said that water is currently being supplied from 40 deep tube wells. Now the demand for water is only 1 million liters per day. However, the demand for water is increasing day by day. Next year, the demand for water will increase to 30 million liters per day. 50 million liters in 2027, 70 million liters in 2028 and 100 million liters in 2029. Although a responsible official of Chittagong WASA said that the actual water demand after 10 or 20 years has not yet been determined. Work is underway on this.
However, BEZA has taken the initiative to implement a project worth about 632 crore taka to alleviate the water crisis. The project was approved by ECNEC in November 2019. The project was not completed on time. The cost has increased to 129 crore taka to 761 crore taka. The work is scheduled to be completed in June next year. When the work is completed, 50 million liters will come from the Muhuri reservoir daily.
Abdullah Al Mahmud, director of the National Special Economic Zone Development Project, said that the demand for water is increasing day by day. He told Prothom Alo that there will be no water crisis until 2030. However, after that, the demand will increase when new factories go into production. Then the water supply project from the Meghna River will be effective.
