Chinese economic zone project finally set for approval

The proposal to establish a Chinese Economic Zone in Bangladesh was first discussed during Chinese President Xi Jinping’s visit to Dhaka in 2016, when the two countries signed a memorandum of understanding. However, the initiative remained stalled for years due to various complications.

Nearly a decade later, the Tk 40 billion-project is finally set to move forward and could receive approval ahead of Prime Minister Tarique Rahman’s forthcoming visit to China.

Sources said the project will be placed before the fourth meeting of the National Economic Council under the new government on Tuesday.

According to the Planning Commission, the economic zone will be developed on approximately 783 acres of land in Anwara, Chattogram, under a government-to-government (G2G) arrangement.

The zone is expected to generate employment for around 100,000 people and attract investments worth approximately US$500 million.

The project is scheduled to begin in January 2027 and be completed by 2031, with an implementation period of five years. The total estimated cost is Tk 41.89 billion (4189 crore), of which Tk 17.22 billion will come from the government, while the remaining Tk 24.67 billion will be financed through Chinese assistance.

Speaking to Prothom Alo, Mohammad Khorshed Alam, president of the Bangladesh-China Chamber of Commerce and Industry (BCCCI), said the economic zone could attract Chinese investment in garment manufacturing, mobile phone assembly, footwear, electrical goods and sporting equipment industries.

“However, providing electricity and gas connections to the zone may place additional pressure on the government,” he added.

According to sources at the Bangladesh Economic Zones Authority (BEZA), the project will be provided with essential infrastructure and supporting facilities, including gas and electricity connections, roads and bridges.

The plan includes the installation of a 20-kilometre power transmission line, construction of roads with a width of 12 metres, a 12-kilometre boundary wall, and a 1,200-metre jetty. In addition, a two-kilometre gas pipeline, water reservoirs and water treatment facilities will be developed.

Officials expect the project to contribute to the diversification of Bangladesh’s export base.

Planning Ministry officials said the approval initiative has primarily been undertaken to facilitate land development and basic infrastructure works within the economic zone.

Asked about the project, Planning Secretary SM Shakil Akhter told Prothom Alo, “The initial groundwork, including roads, power lines and utility services, will be completed.”

Individuals associated with the project said progress had remained stalled for years because of complications relating to contractor appointments and ownership arrangements.

Following the initial MoU in 2014, land acquisition was completed in 2016.

Responsibility for infrastructure development was initially assigned to the China Harbour Engineering Company (CHEC), but a final agreement could not be reached. Several years were subsequently lost, and at one stage allegations emerged that CHEC had offered bribes.

In 2022, the Chinese government nominated China Road and Bridge Corporation (CRBC) as the new developer. BEZA and CRBC subsequently formed a joint venture company.

Under the arrangement, BEZA received a 30 per cent ownership stake, determined on the basis of the 50-year lease value of the land. In return for investing $100 million in developing the economic zone, the Chinese company received a 70 per cent shareholding.

However, according to government procurement regulations, the same entity is not permitted to act both as the feasibility assessor and the developer of a project. In this case, CRBC performed both roles.

Asked about the reasons for the delay, BEZA Executive Member (Planning and Development) Md Nazrul Islam said, “Perhaps the zone was not previously among the government’s priorities. The new government is now moving the project forward with employment generation in mind.”

Responding to questions about the types of industries likely to be established in the zone, Nazrul Islam said more than 100 Chinese companies had already expressed interest in setting up factories.

Those include firms operating in the leather, light engineering, medical equipment and chemical sectors. While some garment factories may also be established, BEZA does not want the zone to be dominated by the garment industry.

According to data from the Economic Relations Division (ERD), Bangladesh secured financing commitments worth more than $1 billion from China during the 2021–22 fiscal year.

That figure fell to $276 million in 2022–23, while no new Chinese loan commitments were secured during the 2023–24 fiscal year.

Commenting on the matter, former ambassador M Humayun Kabir told Prothom Alo, “We want investment. If they are interested in investing here, that is positive for us. In particular, approval of this project before the Prime Minister’s visit to China will be a significant factor in attracting investment.”