Despite nine years of work and expenditure of almost Tk 500 crore, the construction of the central effluent treatment plant in the Savar Tannery Industrial Zone (STIE) was not completed.
A Bangladeshi and Chinese joint venture won the construction work of CETP in a bidding process in 2012 and the completion deadline was 2017, but the deadline has been extended several times.
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The STIE finally took over the joint venture project on June 27.
Meanwhile, the joint venture’s delay has put the country’s multibillion-dollar leather industry in difficulty, caused environmental pollution, damage to the nearby Dhaleshwari River, and a delay in securing the Leather Working Group (LWG) certification, which is necessary for better exporting. price of tanned leather.
The decision to terminate the contract with the company was taken on the basis of the recommendations of two technical committees formed in April to assess the progress and impacts of CETP.
As of July 1, a new local government-owned company, Dhaka Tannery Industrial Estate Waste Treatment Plant Company Ltd, has taken over CETP, said Jitendra Nath Paul, STIE project manager.
Although CETP has been operating for some time now, the online monitoring system has not been installed according to the agreement and its lab has inadequate testing facilities, Paul said.
In addition, only four of the eight types of test facilities were installed in the lab and no mini-workshops were built at the CETP site, he said.
Paul said the government could now take another Balancing, Modernization, Rehabilitation and Expansion (BMRE) project to make it fully operational.
“We will reduce Tk 25 crore of the total amount payable of Tk 492 crore to the construction company as a penalty, in accordance with the agreement,” Paul told the Daily Star by telephone.
Paul also said that the current low capacity of the CETP reservoir – 25,000 cubic meters per day – is unable to handle the overflow of water during peak season in Eid-ul-Azha, when 50 percent of the leather annual gross of the country is generated. .
With little water supply, Paul advised tanners not to overuse the water to tan raw hides and not to run all the tanneries at the same time.
The global standard for using water to wash a ton of rawhide is 30,000 liters, but in the case of Bangladesh, tanners use over 65,000 liters of groundwater.
Nurul Alam, managing director of DCL, the local joint venture partner, said there was a lack of cooperation early on between the Chinese partner and the Bangladeshi side in the CETP project.
The Chinese company did not want to function properly and there was a delay in the land procedures and other documents for the construction of the CETP, he said.
“And ultimately it was not completed,” said Alam, who held less than 50% of the joint venture’s shares, while the Chinese partner held more than 50%.
Delwar Hossain, CETP team leader and lecturer at Bangladesh University of Engineering and Technology (BUET), said partial construction of CETP would not help achieve Leather Working Group (LWG) certification to get the international prices from buyers.
Regarding the construction of a 25,000 cubic meters per day reservoir, Hossain said in the tender that the actual capacity was set at 20,000 cubic meters per day but that the capacity was increased later.
The country’s rawhide production was not taken into account when bidding for the construction of such a small reservoir, he said.
The LWG issues certification after a country has accumulated 1365 points. Out of the total points, tannery factory owners will have to get 900, CETP 100, and authorities 100.
The remaining points will be awarded to other factors. Currently, Bangladeshi exporters are shipping leather at 40% less than international prices because they cannot do business with compliant companies without LWG certification.
Moreover, the tanners also did not improve their compliance, did not reduce the water used in processing rawhide, and did not improve working conditions to achieve LWG certification, Hossain said.
Currently, most of the tanneries hosted in the STIE have to sell the leather to non-compliant buyers in China and Europe as they do not have LWG certification, which indicates better compliance and environmental protection practices.
Regarding CETP, Shaheen Ahmed, president of the Bangladesh Tanners Association, said nothing has been done in CETP regarding heavy metals.
Since CETP is not finished, it needs BMRE to achieve LWG certification, Shaheen Ahmed also said.
Mr Saiful Islam, president of the Bangladesh Leather Goods and Footwear Manufacturers and Exporters Association, said leather and leather goods export earnings were on the way to recover as Western retailers and brands reopen their businesses. points of sale.
In the last fiscal year, revenues from leather and leather goods rose 18.06 percent to $ 941.67 billion, according to data from the Export Promotion Bureau.