PM assures businesses of improving energy supply within a year
The prime minister told BGMEA leaders that government measures to address the energy crisis will become visible within one to one-and-a-half years.
Highlights
- BGMEA highlights energy crisis, negative impact of NBR audit process
- BGMEA demands approval of yarn import through land port
- BTMA seeks access to working capital even for defaulting companies
- PM acknowledges energy crisis cannot be solved overnight
- Separate committees to address demands within a week
- Decision on installing a new floating LNG unit within a month
Prime Minister Tarique Rahman has assured business leaders that tangible improvements in the power and gas sector will be visible within a year to year-and-a-half, alongside plans to decide on installing a new floating LNG unit within a month.
The assurance came today (22 July) during separate meetings with leaders of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Bangladesh Textile Mills Association (BTMA).
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While praising a series of business-friendly policy measures, including a Tk20,000 crore working capital facility, industrialists said new investments will not come in until the government resolves the existing severe gas shortfall that has left factories operating at a fraction of their capacity.
Acknowledging that the inherited crisis cannot be solved overnight, the PM appealed for patience and announced a high-level committee tasked with recommending solutions to industry demands within a week.
BGMEA President Mahmud Hasan Khan Babu told TBS that the association had highlighted the major challenges facing the RMG industry, particularly the energy crisis and the negative impact of the NBR audit process on businesses.
"The prime minister said the initiatives undertaken to resolve the energy crisis would produce visible results within the next one to one-and-a-half years. He also said a decision would be taken within the next month to install another Floating Storage Regasification Unit (FSRU)," the BGMEA president said.
A BGMEA vice-president who attended the meeting also told TBS that the prime minister acknowledged that the government had no immediate solution to the energy shortage but assured business leaders that tangible improvements would be visible within a year.
Earlier in the day, BTMA leaders raised the same issue in a separate meeting.
"The prime minister understands the challenges facing the industry, including the energy crisis. However, he said resolving the gas shortage will take time," BTMA President Showkat Aziz Russell told TBS.
Since assuming office in February, the government has introduced several major policy initiatives aimed at addressing business challenges. These include the announcement of a Tk20,000 crore working capital facility to help reopen closed factories, extensive tax breaks to encourage employment-generating investments, and more than tripling cash incentives for apparel exporters using locally produced yarn to enhance the competitiveness of the domestic textile industry.
However, industrialists argue that unless the energy crisis is resolved and energy security is ensured, these policy measures alone will not stimulate investment in energy-dependent industries or help achieve the government's investment and employment targets.
At present, many gas-dependent textile mills are receiving only 1.5 to 2 PSI of gas pressure despite having approved connections of 10 to 15 PSI, severely disrupting production.
The gas shortage has also affected households. In several areas of Dhaka, including Mirpur, gas pressure has fallen so low that household stoves often fail to ignite.
The severity of the shortage is reflected in official data. On 8 July, the Minister for the Ministry of Power, Energy and Mineral Resources Iqbal Hasan Mahmud told Parliament that Bangladesh's daily gas demand stands at 3,800 million cubic feet per day (mmcfd), while supply is only 2,700 mmcfd.
BGMEA demands approval of yarn import through land port
The BGMEA presented seven key proposals to the prime minister, with resolving the energy crisis being its top priority.
Other demands included resuming yarn imports from India through the Benapole land port, which were suspended during the interim government's tenure; simplifying compliance with the Bangladesh National Building Code and environmental clearance procedures; allocating land in Gazipur for a temporary hospital for garment workers; establishing a separate ministry for the textile and apparel sectors; constructing temporary sheds at airports to prevent export goods from being damaged; and addressing harassment arising from customs and bonded warehouse audits.
BGMEA Senior Vice-President Inamul Haq Khan Bablu said businesses face practical difficulties due to inconsistent interpretation of Building Code provisions while implementing field-level offices.
He added that a committee comprising the commerce minister and the prime minister's economic affairs adviser has been formed to recommend solutions to these issues.
BTMA seeks access to working capital even for defaulting companies
In its meeting with the PM, the BTMA submitted five point proposals, including easing eligibility requirements for the government's Tk20,000 crore working capital support package for closed or partially operational factories.
The association proposed that one defaulting company within a business group should not prevent other companies in the same group from obtaining loans; and closed factories should be allowed temporary access to the working capital fund even if they have defaulted on loans.
According to a BTMA press release, the association also requested simplified procedures for implementing the Tk20,000 crore working capital programme, project-based evaluation by the Credit Information Bureau (CIB), and temporary relaxation of CIB requirements for closed or partially closed industrial enterprises.
A CIB report is a comprehensive credit history issued by Bangladesh Bank, detailing an individual or company's outstanding liabilities, previous loans, repayment behaviour and default status.
Under existing regulations, a company classified as a loan defaulter by one bank is effectively barred from obtaining financing from another bank. BTMA has sought temporary relaxation of this requirement.
The association also reiterated four broader policy proposals including, aligning textile and export-oriented RMG policies with those of competing countries; setting a 5% interest rate for the textile sector; introducing a Fast Track Service Mechanism to ensure quicker and more efficient delivery of government utilities and other public services.
