Feasibility Report of Mongla EZ

Pre-Feasibility
Report
Mongla Economic
Zone, Bangladesh
Submitted to
Bangladesh Economic
Zones Authority
January, 2015 Bangladesh Economic
Zones Authority
Unauthorized access prohibited
Disclaimer
The report has been prepared by PricewaterhouseCoopers Pvt Ltd (PwC) for Bangladesh
Economic Zones Authority (BEZA). This is pursuant to the Scope of Work under the Request
for Proposal document "Transaction Advisory Services for Development of Economic Zones in
Bangladesh" issued by BEZA. Consortium of PricewaterhouseCoopers, Mahindra Consulting
Engineers Ltd and Infrastructure Investment Facilitation Company (IIFC) has undertaken a
detailed techno-economic feasibility analysis and developed a comprehensive master plan for the
economic zone at Mongla. Any third party should obtain prior consent of PwC before copying or
reproducing, in whole or in part, the contents of this report. PwC disclaims any responsibility for
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World Bank
Our assessment and review are based on the facts and details provided to us during our
discussions specific to the Project and may not be similar across the organization / state. If any of
these facts or details provided to us are not complete or accurate, the conclusions drawn from
subsequent complete or accurate facts or details could cause us to change our opinion. The
conclusions drawn and recommendations made are based on the information available at the
time of writing this report.
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reliance should be based on this report for the purposes of audit.
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Page 3 of 228
Feasibility study of Mongla Economic Zone, Bangladesh
Contents
1. Introduction ...........................................................................................................................................................16
1.1. Background ...............................................................................................................................................16

1.2. Objectives of this study............................................................................................................................. 17
1.3. Approach and Methodology ..................................................................................................................... 17
2. Understanding Bangladesh’s Economic landscape..............................................................................................19
2.1. Economic Overview of Bangladesh..........................................................................................................19

2.1.1. Trade and FDI trends ...............................................................................................................................21
2.1.2. Review of manufacturing sector ............................................................................................................. 24
2.1.2.1. Factors Driving Industry (esp. manufacturing industry) Growth ............................................ 25
2.1.2.2. Major challenges .......................................................................................................................... 29
2.2. Doing Business in Bangladesh- Emerging Prospects .............................................................................31

2.2.1. Benchmarking Bangladesh.......................................................................................................................31
2.2.2. Improving prospects: 2009-2014 key developments ............................................................................ 34
3. Industries Assessment .......................................................................................................................................... 38
3.1. Framework for Industry Identification .................................................................................................. 38

3.2. Global Economic Review......................................................................................................................... 40
3.2.1. Trade scenario.......................................................................................................................................... 40
3.2.2. FDI trends ................................................................................................................................................ 42
3.2.3. Mergers and Acquisitions (M & A) ......................................................................................................... 45
3.3. Parametric Analysis of Bangladesh’s key Industrial sectors ................................................................. 46

3.4. Bangladesh Industry Vision-Review of Perspective Plan 2021............................................................. 52
3.4.1. Vision 2021............................................................................................................................................... 52
3.4.2. Strategic Initiatives.................................................................................................................................. 52
3.5. Summary of sectors exhibiting growth potential................................................................................... 55

3.6. Assessment of regional characteristics, site infrastructure and constraints .........................................57
3.6.1. Regional characteristics, Economy and Trade........................................................................................57
3.6.1.1. Economic and regional industrial base assessment .................................................................. 58
3.6.2. Strategic advantages of proximity to Mongla Port ................................................................................ 63
3.6.2.1. About Mongla Port....................................................................................................................... 63
3.6.2.2. Trade Profile of Mongla Port....................................................................................................... 63
3.6.3. Critical infrastructure up-gradation ....................................................................................................... 65
3.6.3.1. Dredging of Passur River............................................................................................................. 65
3.6.3.2. Construction of Padma Bridge .................................................................................................... 67
Bangladesh Economic Zones Authority

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3.6.3.3. Improving the Ferry Service at Mawa ........................................................................................ 67

3.6.3.4. Dredging of Mongla-Ghasiakhali Canal ..................................................................................... 68
3.6.4. Infrastructure connectivity at the Mongla EZ site ................................................................................. 69
3.6.5. Constraints at the site.............................................................................................................................. 70
3.6.6. SWOT Analysis.......................................................................................................................................... 71
3.6.7. Relative attractiveness of the sectors based on local site assessment .................................................. 73
3.7. Industry Identification- Excerpts from the Survey................................................................................ 78

3.7.1. Survey Sample Overview ..........................................................................................................................81
3.7.2. Target Incentives ..................................................................................................................................... 84
3.7.3. Industry identification – From Survey Results...................................................................................... 88
3.8. Final Shortlisting of Industries for Masterplan ..................................................................................... 90
3.8.1. Arriving at land area demand at Mongla EZ .......................................................................................... 97
3.9. Land area uptake for Mongla EZ ............................................................................................................ 98

3.9.1. Land uptake projections for Mongla – Base Case.................................................................................. 98
3.9.1.1. Fiscal/Non Fiscal incentives – Demand vs Supply........................................................................ 98
3.9.1.2. Provision of support Infrastructure – Demand vs Supply ......................................................... 100
3.9.2. Land uptake projections for Mongla – Optimistic Case...................................................................... 103
3.9.3. Land uptake projections for Mongla – Pessimistic Case..................................................................... 104
4. Proposed Master Plan and offsite infrastructure .............................................................................................. 106
4.1. Site Assessment...................................................................................................................................... 106

4.1.1. Introduction ........................................................................................................................................... 106
4.2. Bagerhat district – A profile.................................................................................................................. 106

4.2.1. Agriculture and horticulture ..................................................................................................................107
4.2.2. Flora and fauna .......................................................................................................................................107
4.2.3. Economic situation ................................................................................................................................ 109
4.2.4. Location of the project............................................................................................................................110
4.2.5. Topography ............................................................................................................................................. 117
4.2.6. Hydrography ...........................................................................................................................................123
4.2.7. Meteorological status..............................................................................................................................125
4.2.8. Seismicity ............................................................................................................................................... 128
4.2.9. Ambient air quality ................................................................................................................................ 128
4.2.10. Noise levels................................................................................................................................. 128
4.2.11. Water environment.................................................................................................................... 128
4.2.12. Infrastructure............................................................................................................................. 130
4.2.13. SWOT Analysis............................................................................................................................ 131
4.2.14. Site assessment – compliance matrix........................................................................................ 131
4.3. Zone Definition .......................................................................................................................................133

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4.3.1. Need for Zone Demarcation ...................................................................................................................133

4.3.2. Methodology ...........................................................................................................................................133
4.3.3. Influence area Key features....................................................................................................................134
4.3.4. Land use ..................................................................................................................................................134
4.3.5. Transportation network .........................................................................................................................134
4.3.6. Topography .............................................................................................................................................135
4.4. Master Plan .............................................................................................................................................136

4.4.1. Planning Principles.................................................................................................................................136
4.4.2. Planning Concept....................................................................................................................................137
4.4.3. Economic Zone Planning Consideration ...............................................................................................138
4.4.4. Zones Spotting ........................................................................................................................................139
4.4.5. Zoning, product mix and facility configuration ....................................................................................139
4.4.6. Economic Zone land use pattern ........................................................................................................... 141
4.4.6.1. Industrial Land ...........................................................................................................................143
4.4.7. Sustainability Initiatives.........................................................................................................................144
4.4.8. Master Plan Components .......................................................................................................................144
4.5. Infrastructure and Facilities...................................................................................................................145
4.5.1. Coverage Area and Objectives................................................................................................................145
4.5.2. Detailing of Economic Zone Infrastructure ..........................................................................................146
4.5.3. Detailing of Offsite Infrastructure .........................................................................................................164
4.5.3.1. Site Grading.................................................................................................................................165
4.5.3.2. Access Road and Bridge to Economic Zone ..............................................................................165
4.5.3.3. Power Supply to Economic Zone ...............................................................................................166
4.5.3.4. Water Supply to Economic Zone................................................................................................167
4.5.3.5. Boundary Wall ............................................................................................................................167
4.5.3.6. Administration Building............................................................................................................ 168
5. Social Impact Assessment ...................................................................................................................................170
5.1. Assessment of Social Impacts ................................................................................................................170
5.1.1. Objective of Social Impact Assessment (SIA) Study.............................................................................170

5.1.2. Study Methodology and Approach ........................................................................................................170
5.1.3. Socio economic conditions of the people and the project areas........................................................... 171
5.1.4. Potential social impacts..........................................................................................................................172
5.1.5. Institutional, Legal and Policy Framework ...........................................................................................173
5.2. Abbreviated Resettlement Action Plan (ARAP)....................................................................................174
5.2.1. Project Affected People...........................................................................................................................174

5.2.2. Options for Rehabilitation od PAPs.......................................................................................................174
5.2.3. Valuation procedure ............................................................................................................................... 175

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6. Environment Assessment .................................................................................................................................... 177

7. Financial Viability Analysis ................................................................................................................................. 181
7.1. Financial Analysis ................................................................................................................................... 181
7.2. Methodology ........................................................................................................................................... 181
7.3. Assumptions: ..........................................................................................................................................183
7.3.1. Construction Phasing .............................................................................................................................183
7.3.2. Land fill rate ........................................................................................................................................... 184
7.3.3. Revenue sources to developer ................................................................................................................185
7.3.4. Cost assumptions ................................................................................................................................... 186
7.3.4.1. Capex ...................................................................................................................................................... 186
7.3.4.2. Opex........................................................................................................................................................ 186
7.3.4.3. Usage Norms:......................................................................................................................................... 188
7.4. Capital Structuring ................................................................................................................................ 189
7.5. Upfront payment and lease rental to be paid by the Developer to BEZA........................................... 190
7.6. Returns from Project ............................................................................................................................. 190
7.7. Results of Simulation of Different Scenarios and Sensitivity to Capital Costs and Prices .................192
7.7.1. Sensitivity analysis for varying Upfront Premium and annual land lease payment that the developer
has to pay to BEZA ...............................................................................................................................................192
7.7.2. Sensitivity analysis for construction cost ..............................................................................................192
7.7.3. Sensitivity analysis for other parameters ..............................................................................................193
8. Economic Internal Rate of Return (EIRR) .........................................................................................................197
8.1. Background .............................................................................................................................................197

8.2. EIRR Framework ....................................................................................................................................197
8.3. Assumptions........................................................................................................................................... 198
8.4. Approach and Methodology ...................................................................................................................199
8.5. Illustration of Calculations....................................................................................................................200
8.6. Results and Discussions ........................................................................................................................ 202
9. Annexure.............................................................................................................................................................. 203
9.1. Review of site and infrastructure enablers........................................................................................... 203

9.1.1. Road Connectivity..................................................................................................................................204
9.1.2. Rail Connectivity.................................................................................................................................... 205
9.1.3. Waterways ..............................................................................................................................................206
9.2. Survey results for shortlisted sub sectors.............................................................................................209
9.3. Suitability of final shortlisted sectors from Global and national perspective .................................... 210
9.3.1. Detailed analysis of the sector............................................................................................................... 210
9.3.1.1. Food Processing- Overview........................................................................................................... 210
9.3.1.2. Textile, RMG & Leather - Overview...............................................................................................212

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9.3.1.3. Light Engineering- Overview .........................................................................................................215

9.4. Validation of land demand (top down approach) for Mongla EZ ........................................................216
9.5. Budget Estimation for RAP ....................................................................................................................219
9.6. Financial Statements ..............................................................................................................................221
9.6.1. Profit and Loss Statement ......................................................................................................................221
9.6.2. Cash Flow Statement ............................................................................................................................. 223
9.6.3. Balance Sheet ......................................................................................................................................... 224
9.6.4. Capex Schedule ...................................................................................................................................... 225

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List of Figures
Figure 1: Bangladesh GDP growth trend....................................................................................................................19
Figure 2: Split of GDP- Bangladesh........................................................................................................................... 20
Figure 3: Actual investment v/s 6th FYP targets...................................................................................................... 20
Figure 4: Major export and Major Import commodities in Bangladesh ..................................................................21
Figure 5: Key source markets for Bangladesh........................................................................................................... 22
Figure 6: Key Export Markets for Bangladesh.......................................................................................................... 22
Figure 7: sector and country-wise FDI (USD million) in Bangladesh ..................................................................... 22
Figure 8: Impetus for FDI, Bangladesh Perspective Plan 2021 ............................................................................... 23
Figure 9: Contribution of manufacturing sector to Bangladesh's economy............................................................ 24
Figure 10: Manufacturing Sub-sector contribution to GDP in FY11........................................................................ 24
Figure 11: Bangladesh employment distribution 2009 in %.................................................................................... 28
Figure 12: Knowledge Economy Index...................................................................................................................... 29
Figure 13: Bangladesh Power scenario...................................................................................................................... 30
Figure 14: Ease of Doing Business Rankings of Comparator Economies 2014 .......................................................31
Figure 15: Bangladesh ranks on 'Doing Business' topics.......................................................................................... 32
Figure 16: Bangladesh's ranking on Investor Protection ......................................................................................... 32
Figure 17: Improving Business Prospects of Asian economies – Survey of Business heads.................................. 33
Figure 18: Industry identification methodology ....................................................................................................... 39
Figure 19: Sector-wise export trend 2013, USD Bn ...................................................................................................41
Figure 20: CAGR (2003 - 2013) and 2013 Global export share .............................................................................. 42
Figure 21: Green field FDI inflow in Asia Pacific (USD billions)............................................................................. 43
Figure 22: Sectorial shares in Greenfield FDI projects globally .............................................................................. 43
Figure 23: Greenfield FDI projects by industry in Asia Pacific, 2011–2012 ........................................................... 44
Figure 24: Top 10 economies with highest FDI rate of returns (%) 2011................................................................ 45
Figure 25: Country wise M & A deals by Seller and purchaser in 2013................................................................... 45
Figure 26: Sectorial shares by M & A deals globally................................................................................................. 46
Figure 27: Changing Composition of the Industrial Sector in terms of GDP Share ............................................... 47
Figure 28: Industrial establishments by ownership & size in 2012 and declining share of Public Enterprises in
GVA & employment .................................................................................................................................................... 47
Figure 29: GVA & Output (in million Tk.) and Employment by industry type in 2012 ......................................... 48
Figure 30: Sector-wise no. of establishments, Output, GVA, employment and Investment in 2012.................... 49
Figure 31: Quantum Index of Industrial Production (Output) by Industrial Groups in Bangladesh.................... 50
Figure 32: Employment Indices of Industrial Workers in Select Industries in Bangladesh...................................51
Figure 33: Productivity Indices of Industrial Labor in Select Industries in Bangladesh ........................................51
Figure 34: Development priorities as per Vision 2021............................................................................................. 52
Figure 35: Mongla EZ location on Map......................................................................................................................57
Figure 36: Area distribution of Bagerhat district ......................................................................................................57
Figure 37: Industrial landscape of Bangladesh......................................................................................................... 58
Figure 38: Manufacturing units’ division wise share in Bangladesh....................................................................... 59
Figure 39: Mongla Port Chanel.................................................................................................................................. 62
Figure 40: Import through Mongla Port ................................................................................................................... 64
Figure 41: Exports through Mongla Port .................................................................................................................. 64
Figure 42: Pussur Channel showing Proposed Area for Dredging .......................................................................... 66
Figure 43: Dedicated Ferry Service at Mawa ............................................................................................................ 67
Figure 44 Mongla to Dhaka River Route................................................................................................................... 68
Figure 45: Water route of Mongla River to Ghasiakhali River including M-G canal ............................................. 69
Figure 46: SWOT Analysis of Mongla region........................................................................................................... 72
Figure 47 – Ownership structure of the companies surveyed ................................................................................. 78
Figure 48: Sector profile of respondents participating in survey .............................................................................81
Figure 49: Region profile of respondents participating in survey ............................................................................81
Figure 50: As-Is interest of respondents to invest in Mongla EZ and breakup of the existing sectors of the
respondents answering “Yes” or “maybe” ................................................................................................................. 82
Figure 51: Reasons that are currently attractive to the industry players ................................................................ 83
Figure 52: Reasons that are leading to lack of interest among industry players .................................................... 84

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Figure 53 : Ranking of Incentive Categories based on % of total respondents ....................................................... 85

Figure 54 : % split of responses for each incentive category................................................................................... 86
Figure 55 : % Split of category for proposed sectors ................................................................................................ 87
Figure 56: Land allocation for potential industries for Mongla EZ......................................................................... 97
Figure 57 - Bagerhat district map ............................................................................................................................ 106
Figure 58 -Mongla Upazila map ...............................................................................................................................110
Figure 59 -Eco sensitivity map ................................................................................................................................. 113
Figure 60 - Site photos .............................................................................................................................................. 113
Figure 61 Physiographic map.................................................................................................................................... 117
Figure 62 - Administrative Building Bore Log......................................................................................................... 118
Figure 63 Administrative building – Bore log site plan .......................................................................................... 119
Figure 64 Bridge – Bore log ..................................................................................................................................... 120
Figure 65 Bridge – Bore log site plan ....................................................................................................................... 121
Figure 66 Boundary wall – Bore log .........................................................................................................................122
Figure 67 Boundary wall – Bore log site plan ..........................................................................................................123
Figure 68 Hydrographic / Navigation Chart............................................................................................................124
Figure 69 Typical hydrograph of Passur River ........................................................................................................124
Figure 70 –Windrose diagram and Wind speed map .............................................................................................125
Figure 71 –Seismic zone ........................................................................................................................................... 128
Figure 72 –Power grid network ............................................................................................................................... 130
Figure 73 –Influence zone key features ...................................................................................................................134
Figure 74 – Transportation network and spider diagram – 30 km radius ............................................................135
Figure 75 – Contour map at 1m interval ..................................................................................................................135
Figure 76 –Planning principles and objectives........................................................................................................136
Figure 77 –EZ planning concepts .............................................................................................................................137
Figure 78 – Zoning, product mix and facility configuration.................................................................................. 140
Figure 79 – Description of EZ zones, product mix and facility configuration ...................................................... 140
Figure 80 – Master planning considerations........................................................................................................... 141
Figure 81 – Land use pattern – EZ...........................................................................................................................142
Figure 82 – Land use pattern – processing area .....................................................................................................142
Figure 83 – Land use pattern – Non processing area .............................................................................................143
Figure 84 – Sustainability initiatives .......................................................................................................................144
Figure 85 – Master plan of EZ ..................................................................................................................................145
Figure 86 – EZ infrastructure objectives .................................................................................................................146
Figure 87 – Detailing of EZ infrastructure...............................................................................................................154
Figure 88 – STP process flow diagram (SBR technology) ...................................................................................... 161
Figure 89 – Waste reduction by integrated SWM ................................................................................................... 161
Figure 90 – Environmental Sustainability...............................................................................................................163
Figure 91 – Offsite infrastructure and connectivity to EZ.......................................................................................164
Figure 92 – Offsite infrastructure details.................................................................................................................164
Figure 93 – Details of access road and Bridge.........................................................................................................165
Figure 94 – Details of external power supply system..............................................................................................166
Figure 95 – Details of external water supply system...............................................................................................167
Figure 96 – Details of boundary wall ...................................................................................................................... 168
Figure 97 – 3D Perspective view of administrative building ................................................................................. 168
Figure 98 – Details of Administrative building .......................................................................................................169
Figure 99: Methodology and Approach for SIA study.............................................................................................170
Figure 100 – Source of employment ........................................................................................................................ 171
Figure 101: Private Economic Zone Model ............................................................................................................. 182
Figure 102 - Debt Servicing in Base Case ................................................................................................................. 191
Figure 103: revenues, EBIDTA and PAT under base case scenario........................................................................ 191
Figure 104: Cash flows under base case scenario .................................................................................................... 191
Figure 105: Sensitivity analysis for construction cost .............................................................................................193
Figure 106: sensitivity of parameters w.r.t. EIRR under Base case scenario.........................................................194
Figure 107: sensitivity of parameters w.r.t. EIRR under pessimistic case scenario ..............................................195
Figure 108: sensitivity of parameters w.r.t. EIRR under Optimistic case scenario...............................................195
Figure 109: Framework for Economic IRR calculation..........................................................................................200

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Figure 110: Economic Return over the tenure of the project ................................................................................ 202
Figure 111: Mongla EZ Site....................................................................................................................................... 203
Figure 112: Proposed site and approach - Mongla Economic Zone.......................................................................204
Figure 113: Road connectivity for Mongla............................................................................................................... 205
Figure 114: Mongla's location and access................................................................................................................ 207
Figure 115: Mongla Upzila map showing road and water connectivity .................................................................208
Figure 116: Country wise Contribution to Global Exports in Food Industry ........................................................ 210
Figure 117: Food processing sub-sector output Contribution in Bangladesh 2011................................................ 211
Figure 118: Imports/exports in Food Processing industry in Bangladesh ............................................................. 211
Figure 119: Global Textile and Apparel Industry Trade in USD Billions ...............................................................212
Figure 120: Global exports in Textiles and Apparels 2002-12................................................................................213
Figure 121: Textiles, RMG & Leather sub-sector output Contribution in Bangladesh 2011 .................................213
Figure 122: Imports/exports in Textiles, RMG & Leather industry in Bangladesh...............................................214
Figure 123: Division wise textile establishment in Bangladesh in 2011 .................................................................215
Figure 124: Bangladesh LEI Exports (in Mil USD) .................................................................................................215

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List of Tables
Table 1: Bangladesh manufacturing sector performance in 2012 ........................................................................... 25
Table 2: Final consumption expenditure as % of GDP............................................................................................. 26
Table 3: Foreign Trade Information.......................................................................................................................... 26
Table 4: Trade Forecast: Top Export Destination for Bangladesh (2012, 2030).................................................... 27
Table 5: Bangladesh benchmarking with APAC ....................................................................................................... 34
Table 6: Key industrial reforms for Bangladesh ....................................................................................................... 35
Table 7: Business climate in Bangladesh .................................................................................................................. 36
Table 8: Global trade 2013 ......................................................................................................................................... 40
Table 9: Bangladesh Perspective Plan macroeconomic indicators.......................................................................... 53
Table 10: Top sectors based on global industrial analysis ....................................................................................... 55
Table 11: Top sectors based on Bangladesh industrial analysis............................................................................... 55
Table 12 : Division-wise comparison of prominent industrial sectors and other related statistics....................... 60
Table 14: Industry evaluation based on compatibility and environmental factors ................................................ 76
Table 15: Heat map on respondents ranking ............................................................................................................ 88
Table 16 – Summary of the final shortlist of the sectors for the Master plan ......................................................... 90
Table 23: Land Supply Scenarios............................................................................................................................. 103
Table 24: Land uptake projections (in hectares) for Mongla EZ: Base Case Scenario......................................... 103
Table 26: Land uptake projections (in hectares) for Mongla EZ: Optimistic Case Scenario ............................... 104
Table 28: Land uptake projections (in hectares) for Mongla EZ: Pessimistic Case Scenario...............................105
Table 29: Nearest important places from Mongla EZ ............................................................................................. 113
Table 30: Rainfall at Mongla.....................................................................................................................................126
Table 31: Ambient air quality................................................................................................................................... 128
Table 32: Water quality of Pussur River at Mongla Port – 2010............................................................................129
Table 33: Ground water quality ............................................................................................................................... 130
Table 34: Compliance matrix....................................................................................................................................132
Table 35: Land use pattern for the proposed EZ ..................................................................................................... 141
Table 36: Hierarchy of roads ....................................................................................................................................154
Table 37: Composition of flexible pavement structure............................................................................................154
Table 38: Water demand estimation norms ............................................................................................................154
Table 39: Water consumption pattern .....................................................................................................................155
Table 40: Water demand...........................................................................................................................................155
Table 41: Estimation of average daily water demand..............................................................................................156
Table 42: Underground sump storage capacity ....................................................................................................... 157
Table 43: Overhead tank storage capacity ............................................................................................................... 157
Table 44: Pipe sizing for processing area ................................................................................................................. 157
Table 45: Pipe sizing for non-processing area ......................................................................................................... 157
Table 46: Pump capacity ...........................................................................................................................................158
Table 47: Waste water generation pattern ...............................................................................................................158
Table 48: Sewage and sullage generation pattern ...................................................................................................158
Table 49: Sewage and sullage generation estimation..............................................................................................159
Table 50: Pipe size- sewerage network.................................................................................................................... 160
Table 51: Sewage quality .......................................................................................................................................... 160
Table 52: STP- process and components ................................................................................................................ 160
Table 53: Estimation of MSW generation ................................................................................................................162
Table 54: Estimation of power demand ...................................................................................................................162
Table 50: Break up of Budget Estimation ................................................................................................................ 175
Table 52: Environmental impact during Construction and Operational phase .................................................... 177
Table 53: Project timelines for Mongla EZ ............................................................................................................. 184
Table 55: BEPZA operated EPZ plot tariffs..............................................................................................................185
Table 56: Tariffs charged by developer from tenants..............................................................................................185
Table 57: Land use pattern as per detailed Master Planning................................................................................. 188

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Table 58: Industry-wise usage norms ..................................................................................................................... 189

Table 59: Financial assumptions in the model ....................................................................................................... 189
Table 60: Project returns ......................................................................................................................................... 190
Table 61: Sensitivity analysis for varying Upfront Premium and annual land lease payment.............................192
Table 62: Sensitivity analysis parameters for evaluation........................................................................................193
Table 63: Sensitivity on economic rate of return by varying discount rate........................................................... 202
Table 17: Sub-sectors shortlisted .............................................................................................................................209
Table 64: Food Processing Contribution in GDP .................................................................................................... 211
Table 65: Textile demand across segments in Bangladesh .....................................................................................213
Table 64: Manufacturing establishment growth in Bangladesh and Khulna ........................................................216
Table 20: Bangladesh EPZ area and plots statistics under BEPZA ........................................................................217
Table 66: Land Utilization at Mongla EPZ...............................................................................................................217
Table 67: Land area demand calculations based on macro approach ....................................................................217

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List of Abbreviations
ADB Asian Development Bank
APTA Asia-Pacific Trade Agreement
ARAP Abbreviated Resettlement Action Plan
ASEAN Association of Southeast Asian Nations
BCIC Bangladesh Chemical Industries Corporation
BDT Bangladesh Taka
BEPZA Bangladesh Export Processing Zone Authority
BEZA Bangladesh Export Zone Authority
BIM Bangladesh Institute of Management
BOI Board of Investment
BSCIC Bangladesh Small and Cottage Industries Corporation
BSEC Bangladesh Steel and Engineering Corporation
BSFIC Bangladesh Sugar and Food Industries Corporation
BT Bangladesh Taka
CAGR Compound Average Growth Rate
CAPEX Capital Expenditure
CFADS Cash Flow Available for Debt Servicing
DTA Domestic Tariff Area
EA Environmental Assessment
EBITDA Earnings before Interest, Tax, Depreciation and Amortization
EHS Environment, Health and Safety
EIA Environment Impact Assessment
EIR Economic Incentive and Institutional Regime
EIRR Economic Internal Rate of Return
EMP Environment Management Plan
EPZ Export Processing Zone
EU European Union
EZ Economic Zone
FDI Foreign Direct Investment
FOP Factors of Production
FY Financial Year
FYP Five Year Plan
GDP Gross Domestic Product
GOB Government of Bangladesh
GSP Generalized Scheme of Preferences
GVA Gross Value Added
ICT Information and Communications Technology

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List of Abbreviations
IEE Initial Envionmental Examination
IRR Internal Rate of Returns
KEI the Knowledge Economy Index
KLD Kilo Liters per Day
LDC Least Developed Country
LPG Liquified Petroleum Gas
M&A Mergers and Acquisitions
MSME Micro, Small and Medium Enterprises
NIBT Net Income Before Tax
NITTRED National Institute of Textile Training, Research and Design
NPO National Productivity Organization
O&M Operations and Maintenance
ODOP One District One Product
OECD Organization for Economic Co-operation and Development
OPEX Operating Expenditure
PAP Project Affected Persons
POL Petroleum Oil Lubricants
PPP Public Private Partnership
RMG Readymade Garment
RTA Regional Trade Agreements
SAFTA South Asian Free Trade Area
SCITI Small and Cottage Industries Training Institute
SIA Social Impact Assessment
SMEs Small and Medium Enterprises
SMI Survey of Manufacturing Industries
SYFP Sixth Five Year Plan
Tk. Bangladeshi Taka
TPE Total Persons Engaged
UK United Kingdom
UNCTAD United Nations Conference on Trade and Development
UNIDO United Nations Industrial Development Organization
UP Union Parishad
USA United States of America
USD United States Dollar
WB World Bank
WTO World Trade Organization

PwC Page 15 of 228
1. Introduction
1.1. Background
Bangladesh has been growing at a sustained annual GDP growth of over 6 percent since FY 2010. Growth was
underpinned by stable macroeconomic and prudent monetary policies, rising industry and services output and
continued high levels of remittances. Going forward, Government of Bangladesh’s objective is to develop a
growth trajectory that will support an overall increase in real GDP growth to 8 percent per annum and reduce
poverty from 40 percent to 15 percent by 2021.
It is imperative to note that Bangladesh’s labour force has been augmenting at the rate of nearly 2 million a
year. Accordingly, creating productive employment will largely depend on creating an environment conducive
to private sector investment, particularly for labour-intensive manufacturing and services.
The Government of Bangladesh has successfully provided tailored infrastructure services and business
environment conditions through Export Processing Zones (EPZs). The Bangladesh Export Processing Zone
Authority (BEPZA) was established in 1980, with the first EPZ built in Chittagong in 1983. EPZs have been
used as a strategic instrument for attracting FDI. The EPZ program was the first systematic initiative to provide
fully-serviced land and a better business environment for investors, targeting large scale, export-oriented
manufacturing. EPZs have triggered impressive growth in exports, mainly in the RMG sector, at an average
annual rate of 23 percent since 1993, reaching nearly US$2.9 billion by FY2010, and employing almost 28,000
people.
Bangladesh’s current EPZ model has its limitations both in terms of cumulative impact and in terms of spillover
to the domestic economy. As an exporting enclave, EPZs have provided little in the way of linkages with the
domestic economy, up-stream or down-stream, resulting in low technology and efficiency spillover which
accompany foreign investment. Investments in other sectors beyond the low capital investment RMG segment
have also not materialized.
The Government’s objective is therefore to maximize the potential direct and indirect impacts through a more
modern, generalized regime of Economic Zones (EZs). The Government has launched an effort to develop a new
EZ paradigm for Bangladesh; drawing from numerous successful examples from around the world as well as
Bangladesh’s own positive experience with the EPZ model. The expectation is that more spillover will be
harnessed by local firms from foreign direct investment, additional investments will be encouraged within value
chains, more local produce will be procured and better linkages established between firms and educational
institutions. A faster adaption to international environmental and social practices in the private sector should
also be encouraged through the new EZ policy.
The new EZ regime provides for a new approach both in management and investment. The policy allows the
Government to develop and pilot an approach that is less reliant on Government fiscal subsidies, while
leveraging comparative advantages and private sector capabilities, where possible.
The Economic Zone Act was passed in the Bangladesh Parliament in August 2010, providing the overall
framework for establishing EZs throughout Bangladesh. Under this Act, the Bangladesh Economic Zone
Authority is established under the Prime Minister’s Office (PMO) and governed by a Board chaired by the Prime
Minister. The law provides the legal coverage for attracting and leveraging private investment in the
development of zones as zone developers or operators, and in the provision of tailored infrastructure services,
such as private provision of power, effluent treatment, etc. selected and contracted on a Public-Private
Partnership (PPP) basis.

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In the background of the above, the Government of Bangladesh is implementing the Private Sector
Development Support Project (PSDSP) with support from the World Bank and United Kingdom – Department
for International Development (UK-DFID) to support pilot projects under the new Economic Zone model. The
objective is to demonstrate the viability and efficacy of new models in removing key constraints facing the
private sector in business investment.
1.2. Objectives of this study

Mongla Economic Zone at Khulna Division in South west Bangladesh is one of the four pilot projects identified
for development under the PSDSP. The site for the Mongla economic zone has been identified as a land parcel
of 205 acres that lies 40 km from Khulna city, 105 km from Jessore airport and 230 km from capital Dhaka.
This study has been awarded to the consortium of PricewaterhouseCoopers, Mahindra Consulting Engineers
Ltd and Infrastructure Investment Facilitation Company (IIFC) to undertake a detailed techno-economic
feasibility analysis and develop a comprehensive master plan for the economic zone at Mongla.
Key objectives of this study are -
 Prioritize and specify the required physical investments;

 Develop business plans, undertake feasibility assessments including complete financial modelling
 Undertake detailed environment and social impact assessment, Incorporate environmental and social
management considerations to manage safeguards risks, and
 Prepare selected sub-projects for implementation
 Provide technical engineering designs, master plan for the economic zone;
1.3. Approach and Methodology

To achieve the objectives of this study, a modular approach is proposed that relies on a comprehensive
assessment of all relevant factors vital to determine the feasibility of an economic zone at Mongla.
The study begins with a commercial assessment to identify industrial sectors that can be explored at Mongla
Economic zone. This is supported by a detailed topographical and geographical survey of the site, an
environmental assessment and a social impact assessment. This assessment is further supported by an
assessment of demand in the identified sectors which is then used to estimate the land that may get absorbed
under each of the industries proposed at Mongla Economic Zone. Land requirements feed into the
comprehensive Master planning exercise that has been undertaken based on new-age emerging principles of
urban planning. The master planning exercise provides an estimate of capital expenditure and operating
expenditure needed for the implementation. These expenditure figures have been used in the detailed financial
modelling exercise undertaken for Mongla Economic Zone. Revenue side assessments have been done
considering expected revenue sources and based upon the demand assessment carried out earlier. Financial
modelling quantifies the feasibility of the economic zone in terms of the Internal Rate of Return (IRR) that may
be reasonably expected for the Mongla Economic Zone project. Finally, to meet the broader socio economic
objective of the development of EZ, an Economic IRR analysis has been undertaken.

PwC Page 17 of 228
Feasibility study of Mongla Economic Zone Draft
Overall Approach
Industry Identification for Mongla

• Survey Best Practice Master Plan
respondents • State of the art infrastructure - Industrial, General,
ranking commercial, social , Connectivity
•Sectors • Global Trade
Analysis – • Sustainability - Green cover, Rain water harvesting
identified by • Development Rules & Regulations
respondents Export/Impor
Globally t Data
•Enablers as per Survey Emerging
respondent • M&A
results Industries Transactions
•Incentives sort and
by industry • FDI Trends Social Review – Environment
analysis
Impacts & Mitigation Review
Measures -Impact & Mitigation
Bangladesh trend
&
Mongla/Khulna
Region Strengths Demand Assessment
• Current Industrial
Landscape Supply Side Expected Land
• Crop Production / Raw Scenario – requirement /
materials available Comparison of demand for
• SWOT Mongla EZ
available
• Perspective Plan 2021
– Focus Sectors
Industry identification for Mongla IInUIndustry
Global and Review of Assumpti
• Past Performance – Probability
EZ experts’ ranking Industry
IEMs filed, Output, Country cost of FoPs, ons
of –
as obtained in Estimated
Growth, Imports Share in Policies – occurrence
Expected
survey Growth Rate byShare
experts
Output Bangladesh

PwC Page 18 of 228
2. Understanding Bangladesh’s
Economic landscape
2.1. Economic Overview of Bangladesh
The Economy of Bangladesh was ranked as the 37th largest economy in the world by IMF in 2013 in
PPP (Purchasing power parity) terms. The growth potential of the economy has led to Bangladesh’s
inclusion in the ‘Next 11’of Goldman Sachs and the Global Growth Generators Countries with the
country being considered as the next Asian Tiger Economy.
Bangladesh is a densely populated country with a population of around 155 million living on a land
area of 147,570 square kilometres (56,977 square miles). More than half of the GDP accrues from the
service sector even though half of population continues to be employed in agriculture. Driven by a
large labour force and the need for employment expansion, productivity enhancement and increasing
per capita income, Bangladesh’s manufacturing sector has been experiencing a strong push by policy
makers leading to structural changes in the country’s economy. In fact, Readymade Garment (RMG)
industry has emerged as the leading foreign exchange earner for the country. Continuous reforms and
policy efforts have led to significant growth in the industrial base of the economy, bolstered with
increasing realization of domestic and foreign investments in the country.
14 10%
12
8%
10 6.70% 6.30% 6%
6.10%
8 6%
6%
6 4%
4
2%
2
8.9 10 11.2 11.6 13
0 0%
2009 2010 2011 2012 2013
GDP (USD Bn) Real GDP growth
Figure 1: Bangladesh GDP growth trend
Source: World Bank
The GDP of Bangladesh has shown a growth of ~6%, growing from USD 8.9 Bn in 2009 to USD 13 Bn
in 2014. The average GDP growth rate in Bangladesh has typically hovered around 5.62% from 1994
until 2013, reaching an all-time high of 6.71% in 2011. This robust GDP growth was largely propelled
by the industrial sector which has exhibited an average growth rate in excess of GDP growth over the
period. The GDP per capita has also gradually increased from USD 598 to USD 829 in 20131.
In continuation of this growth story, Bangladesh’s Perspective Plan targets transformation of

Bangladesh into a middle-income economy by 2021. Accordingly, the Perspective Vision Plan 2021
1
World Bank indicators (GDP per capita-current USD)

PwC Page 19 of 228
sets ambitious targets for the future with over 8% growth rate being targeted after 2015,
augmenting to 10% year on year growth by 2021. The Vision sets its basis on substantial increase
in investment rate in economy, most of which is likely to come from national savings and FDI.
48% 49% 49% 53% 53% 54% 48%
21% 25% 25%

27% 28% 29% 37%
30% 26% 26% 20% 19% 17% 15%
1990 1995 2000 2005 2010 2013 2021
Agriculture Industries Service
Source: World Bank
Figure 2: Split of GDP- Bangladesh
A brief look at the GDP split of Bangladesh reveals major dominance of services sector with 50%
contribution to the country’s GDP while the Industrial and Agricultural sectors have a share of 29%
and 17% respectively.
It may be noted from the graph above that while contribution to GDP by services sector over the past
few years have hovered around 50%, the contribution from industrial sector have increased. Going
forward, by 2021, the contribution of industries in the overall economy is expected to increase to 37%
from existing 29%, while the respective contribution from services and agriculture sector are expected
to be come down.
Within industries, on account of trade liberalization, investment de-regulations and improved

financial performance, the country’s manufacturing sector has shown a dynamic growth from 1990
onwards mainly led by emergence of RMG sector. The share of manufacturing sector in GDP has
increased significantly from under 12% in 1980’s to more than 18% currently.
35.0
30.0
% of GDP
25.0
20.0
15.0
2010 2011 2012 2013 2014 2015
Actual private investment Actual total investment
Plan target for private investment Plan target for total investment
Figure 3: Actual investment v/s 6th FYP targets
Source: ADB Country Outlook 2014 (Bangladesh)

PwC Page 20 of 228
On the other hand, trends indicate that investments have remained virtually stagnant at around 25%–
26% of GDP over the past several years and to meet the targets of the Sixth FYP itself (FY11-15), the
rate needs to be raised to the 32%–33% range.
Accordingly, for achieving the high growth agenda set by the Perspective Plan and proposed to be
driven by industries sector, it is imperative to involve and attract private sector participation for
greater fund mobilization, but also to facilitate employment generation and promote human resource
development in the country.
2.1.1.Trade and FDI trends

Review of the exports and imports data of Bangladesh reveals a negative trade balance with imports
currently being higher than exports. The imports for 2012-13 stood at USD 34,084 Million and
exports at USD 23,562 Million2. Amongst the total exports in 2012-13, Ready made garments had the
major share of 68%, underlining the acute need for export diversification and manufacturing
capabilities of Bangladesh. Besides RMG, around 11% of the total exports are of textiles, Jute & Jute
products , Leather & Leather products and Frozen food. Export Processing Zones developed by the
Government alone comprise 16% of the total exports.
The import basket on the other hand is constituted largely by imports of Textile, Food grains, Spices,
Edible oil, POL and Crude petroleum, Chemicals & Pharmaceuticals and Fertilizers. Textile imports in
the form of Yarn, Fabric , raw cotton etc constitute ~1/5th of the import basket and are major inputs
for the dominating RMG industry. This highlights the absence of downward linkages for the
flourishing garment industry and also a major opportunity for taking the manufacturing sector
further. As per estimates, Bangladesh currently lacks production of export quality raw material and
hardly 8-10%3 of domestic textile production is generally supplied as raw material to the local
industry.
Commodity wise Export Spilt 2012-13 Commodity Wise Import Split 2012-
100%=23562 USD Mil 13
100%=34827 USD Mil
RMG Agro&
Food
5% Textiles POL & Crude
16% 7% 13% Petroleum
Leather & Chemicals &
4% Products Pharma
Frozen food 22% 14% Fertilizer
2%
3% 4%
68% Jute & Plastics & Rubber
2% Products 5%
EPZ exports 20% Textiles
7%
Others 3% Metals
4%
Figure 4: Major export and Major Import commodities in Bangladesh
Further, while the RMG domination in exports is indeed a reflection of country’s position as
world’s second-largest garment manufacturer, it also possibly suggests relatively low emphasis
and export competitiveness of the country’s other items which need urgent focus. Similarly, the
country needs to focus on substituting imports of capital goods and other items of domestic
2 Bangladesh Bank
3 SYFP

PwC Page 21 of 228
consumption through adequate investment in industrial infrastructure that can enable domestic
manufacturing.
Assessment of the trade data for identification of major markets reveals the dominance of
European Union, USA, UK, and Germany. Major source markets on the other hand are Asian
economies like China, India, Japan, Malaysia, South Korea, and Indonesia.
China, P.R.
Country wise Exports Split 2012-13 Country wise Imports India
in % USA 2012-13 in % Malaysia

Korea, Republic of
Germany Japan
18.7 UK Singapore
25.6 1.2 Indonesia

France 15.9 Brazil
1.3 21.7 Taiwan
Spain
1.7 1.6 Thailand
Canada Canada
15.8 1.8
2.6 Italy
Hong Kong
2.6 1.91.8 Uzbekistan

India 1.9 16.3 Kuwait
2.7 2.1 U.S.A
Netherlands
2.7 4 10.3 2.1 Germany
4.3 Belgium Pakistan
4.6 6.2 2.4 5.1
4.1 4.5
Australia
Turkey 2.5 2.8 Saudi Arabia
3.6
Others 3.7 Vietnam
Other Country
Figure 6: Key Export Markets for Bangladesh Figure 5: Key source markets for Bangladesh
Source: Bangladesh Bank
The total FDI inflow in Bangladesh from 1977 to 2013 has been USD 12632.17 Million4. The FDI in
Bangladesh in past 5 years has shown a mixed trend with a sharp dip in FY2011 followed by a
significant revival in FY2012 and FY2013.
Analysis of current foreign investment trends presents the attractiveness of various sectors for
investment. It may be noted that manufacturing especially has been the highest grossing sector with
an average share of more than 33% in past 5 years.
Recently, Malaysia, UK, Singapore, South Korea and Egypt have emerged as the top countries who
FDI in USD Million 2000 FDI in USD Million 1730.36

FY13 1800
1600
FY12 1400 1194.88
1200
FY11 961 913.02
1000 779.04
800
FY10
600
400
FY09
200
0% 20% 40% 60% 80% 100% 0
Agriculture & Fishing Mining & Quarrying FY09 FY10 FY11 FY12 FY13
Power, gas & Petroleum Manufacturing
Construction Trade & Commerce
Services Telecommunication
Egypt Hong Kong Japan Malaysia
4 Bangladesh
Others Bank Netherlands Singapore South Korea UK
Figure 7: sector and country-wise FDI (USD million) in Bangladesh

PwC Page 22 of 228
have invested in Bangladesh.
The growth in investments can be attributed to the liberalization of the industrial and investment
policies in the inception of Sixth Five year plan, reduction in bureaucratic control over private
investment and opening up of new industrial avenues. Some of the major incentives provided by the
Government include tax exemptions for power generation, import duty exemptions for export
processing, an exemption of import duties for export oriented industries, and tax holidays for different
industries, double taxation avoidance treaty on the basis of bilateral agreements and facilities for the
full repatriation of invested capital, profit and dividend.
The following figure highlights the Government’s strategy for giving impetus to the FDI inflow and to
instil confidence among foreign investors (Source: Perspective Plan 2021)
Addressing
Infrastructure,
Regulatory and
Policy level
Constraints
Special
Impetus to
Improvement
development
of Investment
of EZ on
Climate
international
Borders Stimulation of FDI
Inflow
Encourage
Regional
(South
Better
Asia)Invetsm
Governance
ents in High
Priority
Sectors
Figure 8: Impetus for FDI, Bangladesh Perspective Plan 2021

PwC Page 23 of 228
2.1.2. Review of manufacturing sector
Manufacturing Sector Contribution to GDP in %
~2.5 x
28%
16% 18%
12% 13%
FY1981 FY1991 FY2001 FY2011 Target FY2021
Figure 9: Contribution of manufacturing sector to Bangladesh's economy
Source: SYFP
The manufacturing sector in Bangladesh after a

sluggish performance in the 1980s and 1990s
crossed the 15% mark in FY2001 and reached
18% in FY2011 in terms of sectorial contribution
to GDP. The emergence of the private sector Others
18%
driven, export-oriented readymade garments
(RMG) sector as a dominant economic activity Textiles &
RMG
considerably altered the structure of the 39%
manufacturing sector during this period. It is
slated to reach 28% by 2021. This in turn
Machiner Chemical
demands the sector to grow at an inherent y Fertilizer
double digit growth rate from the current 28% 10%
growth rate of around 7-8%. In terms of
employment though, the sector appears to still
Leather
lags behind, with only 12 % share in total
4%
employment in the country. Accordingly, it is
imperative to not only improve the performance
of the sector, but also to do so organically via Figure 10: Manufacturing Sub-sector contribution to GDP in
development of the complete value chain in the FY11
nation (and EZ can act as a catalyst in achieving this objective).
The table below shows the key indicators of manufacturing sector’s performance. Parameters such as
export contribution, employment distribution, net fixed assets, gross output, gross value added and
number of establishments for different sectors are captured. Clearly, RMG & Textiles sector dominates
manufacturing across all key parameters as is evident from the data below.

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Table 1: Bangladesh manufacturing sector performance in 2012
Exports No of No. of Gross GVA (in Investments

(in USD establis people output( mil Tk) (In Mil Tk)
Mil) hments employed in Mil
Tk)
Total 23562 42792 5,015,936 5,394,90 1562944 1,188,108
2
Food 2% 21% 5% 12% 12% 13%
Processing
Textiles 2% 26% 16% 13% 14% 21%
RMG 69% 16% 55% 34% 36% 28%
Leather 3% 2% 2% 1% 1% 2%
Paper 0% 2% 1% 1% 1% 1%
Chemicals & 0% 1% 1% 3% 2% 4%
Chemical
Products
Drugs & 0.2% 1% 1% 2% 2% 6%
Pharma
Rubber & 0% 2% 1% 1% 1% 1%
Plastic
Non-metallic 0% 11% 9% 7% 7% 7%
Mineral
Products
Basic Metals 0% 3% 2% 17% 14% 8%
Fabricated 0% 4% 1% 2% 2% 2%
metal
products&
Machinery &
Equipment
Electronics 0% 0% 0% 1% 1% 0%
Automobiles 0% 0% 0% 1% 1% 0%
Furniture 0% 3% 1% 1% 1% 1%
Others 0% 7% 4% 5% 5% 4%
Jute 4% 1% 3% 2% 2% 6%
Source: Bangladesh Bureau of Statistics, PwC Analysis
Although other sectors such as Agro & Food processing, Non-metallic Mineral products, Basic Metal
industry have a fair share in employment, Gross output, GVA and no. of establishments, their
contribution to country’s exports is minimal.
2.1.2.1. Factors Driving Industry (esp. manufacturing

industry) Growth
Domestic Consumption Pattern
The volume of consumption in Bangladesh has steadily increased over the last decade. Higher
domestic consumption indicates larger domestic markets for industrial growth. The World Bank data
indicated that average value for domestic consumption in Bangladesh (for the period of 1960-2012)
was 83.6% with a minimum 75.8% in 2004 and a maximum of 98.9% in 1976.

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In addition, Final Consumption expenditure (% of GDP) has been in the range of 82%-84% during the
period 2008-20125. The Final Consumption Expenditure is the sum of household final consumption
expenditure and government consumption expenditure. Please refer to the table below for the year on
year data for final consumption expenditure in Bangladesh:
Table 2: Final consumption expenditure as % of GDP
Year % of GDP
2008 84.2
2009 82.75
2010 82.2
2011 83.56
2012 82.41
Source: World Bank
Growing Foreign Trade

Foreign trade of Bangladesh has registered sustainable growth since FY 2008- 09 due to initiation of
economic reforms and adoption of liberal foreign trade policy. In 2001-02, the total volume of foreign
trade was equal to US$ 14.53 billion. By 2013-14, the volume of international trade increased to US$
67.17 billion6. Bangladesh’s economy has benefited from its growing share of the global ready-made
garments market. Government has been pursuing an export led economic development strategy to
stimulate export earnings. Promotional campaign and industry assistance are being provided under
Export Diversification Program. Three more EPZs have also been established in Dhaka, Comilla and
Chittagong. Recently, a new law has been enacted creating special economic zones to give further
impetus to export growth. Foreign trade volume of Bangladesh is shown in the following table:
Table 3: Foreign Trade Information
Year Import Export (US$ Total Trade
(US$ billion) billion) (US$ billion)
2001-02 8.54 5.99 14.53
2002-03 9.66 6.55 16.21
2003-04 10.90 7.60 18.5
2004-05 13.15 8.65 21.8
2005-06 14.75 10.53 25.28
2006-07 17.16 12.18 29.34
2007-08 20.37 14.11 34.48
2008-09 22.51 15.57 38.08
2009-10 23.74 16.20 39.94
2010-11 33.66 22.92 56.58
2011-12 35.52 24.30 59.82
2012-13 33.97 27.03 61
2013-14 36.99 30.18 67.17
12 Year CAGR 13% 14% 14%
Source: Foreign Exchange Policy Department, Bangladesh Bank, CCI&E and EPB
5 This was last measured in 2012 as per World Bank Report

6 Foreign Exchange Policy Department, Bangladesh Bank, CCI&E and EPB

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As indicated from the table above, the foreign trade has experienced a long term CAGR of 14%
over the last 12 years. Further, the destination of exports from Bangladesh is likely to witness a
shift as per the HSBC trade forecast report, which projects increasing importance of rapidly
growing third world economies like Turkey and India, while at the same time retaining top spots
for traditional destinations like USA, UK and Germany. This in turn, is expected to further fuel
the growth of the industries well accustomed to cater to the sub continental market conditions.
Table 4: Trade Forecast: Top Export Destination for Bangladesh (2012, 2030)
Rank Y 2012 Y 2030
1 USA USA
2 Germany Germany
3 UK UK
4 France India
5 Canada Turkey
Source: HSBC Trade Forecast Report
Thrust on industrialization and increased responsiveness of institutional framework

The Ministry of Industries (MoI) is the focal point for promotion of industrial activity in Bangladesh.
Ministry of Industries is primarily responsible for developing new policies and strategies for
promotion, expansion and sustainable development of Industrial sector of the country. Four
corporations under the MoI are tasked with implementing industrial development in key sectors of
the country, viz.
1) Bangladesh Chemical Industries Corporation (BCIC),
2) Bangladesh Sugar and Food Industries Corporation (BSFIC),
3) Bangladesh Steel and Engineering Corporation (BSEC) and Bangladesh Small and Cottage
Industries Corporation (BSCIC),
The Government has also identified the Small and Medium Enterprises (SMEs) as a priority sector
and as the driving force for industrialization. A national taskforce led by the Principal Secretary of the
Prime Minister's Office has been formed so that proper policies and planning are followed in
establishing SMEs. The SME Foundation (SMEF) provides assistance to SMEs in the country.
Further, in order to provide administrative, institutional and infrastructure facilities in the country's
industrialization, there are organizations such as the Bangladesh Standard and Testing Institution
(BSTI), Bangladesh Industrial Technical Assistance Centre (BITAC), Bangladesh Institute of
Management (BIM), National Productivity Organization (NPO) and Small and Cottage Industries
Training Institute (SCITI) under the Ministry of Industries, and the National Institute of Textile
Training, Research and Design (NITTRED), Textile Vocational Institutes, Textile Diploma Institute
and Bangladesh Silk Research and Training Institutes under the Ministry of Textiles and Jute. For the
leather industry, the Bangladesh college of Leather Technology and different district level polytechnic
institutes provide technical education. These institutes also provide assistance for industrialization by
providing training on management and quality control of goods, safeguarding consumers' interests,
producing and repairing import-substitute spare-parts used in industries, manufacturing new tools
necessary for the production of industrial goods that are in demand, and by improving efficiency and
overall productivity.

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To drive private sector investment, the Board of Investment (BOI) has been established as the primary
agency to assist and develop private sector industrial investment in the country, by identifying the
hindrances to investment and to provide necessary facilities and assistance in the establishment of
industries.
Economic zones have been identified by the Government as one of the key ingredients for driving
industrialization in the country. The Bangladesh Export Processing Zones Authority (BEPZA) is the
official organ of the government to promote, attract and facilitate foreign investment in the Export
Processing Zones (EPZ). Likewise, the Bangladesh Economic Zones Authority (BEZA), attached with
the Prime Minister's Office, has been formed to establish economic zones in all potential areas in
Bangladesh including backward and underdeveloped regions with a view to encouraging rapid
economic development through increase and diversification of industry, employment, production and
export.
In line with the priorities identified by the Government, the Industrial Policy 2010 has announced a
large number of incentives to encourage investment, some of which are7:
 Economic Zones can be set up by local or foreign entrepreneur, organization or institution on a
PPP basis
 Economic Zones are entitled to avail special tax holiday, financial assistance and incentives
 Exemption of Double Tax on royalties, technical know-how fees
 Incentives to private sector power generation companies (IPP, ISP) according to the private sector
power generation policy of Bangladesh
 Special facilities and venture capital support will be provided to EO industries under 32 thrust
sectors identified by Government
 Special incentives for using biomass, solar and windmill based power
 Implementation of One District One Product (ODOP) policy will be taken into account in setting
up industrial parks
Strategic shift from EPZ to EZ regime

The Government of Bangladesh has, in past, successfully provided tailored infrastructure services and
business environment conditions through Export Processing Zones (EPZs). EPZs have been used as a
strategic instrument for attracting FDI and dealing with the shortcomings of the overall investment
climate, business registration, licensing, etc. which were restricting investments in the Domestic Tariff
Area (DTA).
However, due to limitations of EPZs both in terms of cumulative impact and in terms of spill-overs to
the domestic economy, a new Economic Zone regime has been initiated. From the new Economic
Zone (EZ) regime, the Government therefore expects more spill-overs to be harnessed by local firms
in terms of foreign direct investment, additional investments to be encouraged within value chains,
more local produce to be procured and better linkages established between manufacturing firms and
educational institutions. The new EZ
policy is meant to encourage faster
Services
43.40% adaption to international environment
and social practices in the private sector.
Agriculture The ultimate objective is to develop and
44.60% pilot an approach that is less reliant on
Government fiscal subsidies, while
leveraging comparative advantages and
Manufacturi
ng
private sector capability where possible.
12%
Figure 11: Bangladesh employment distribution 2009 in %

7 Source: Adopted verbatim from http://www.dhakachamber.com/home/Trade_Opportunities

PwC Page 28 of 228
Source: SFYP
2.1.2.2. Major challenges

A closer look at the spatial distribution of employment suggests that the manufacturing sector has the
least share in the total employment in the country. Although the share has increased from 8% to 12%
in last two decades, the ability of the sector to garner employment has been relatively weak. Given the
rapid increase in Bangladesh’s labour force, there is an ardent need for accelerated pace of
industrialization to address the increasingly diminishing capacity of agriculture to absorb the
incremental labour force, strengthen backward and forward linkages with agriculture and services
sectors, cater to the growing domestic demand for industrial goods, and take advantage of emerging
opportunities in the global market. In this perspective, it is pertinent to address following challenges
faced by the sector:
Weak investment Climate:
As per the Sixth Five Year Plan SFYP, the aggregate investment in the economy has stagnated at 24%-
25% of GDP. This is attributed to the fact that even though the private sector investments have
followed a steady growth rate of 6-7% p.a., but the public investments have tapered in the past few
years. The public sector investments will have to grow well above 30% of GDP in order to achieve the
target GDP growth rate of 10% by 2021. In private sector also, the FDI investments in past 2 years has
surged by more than 40%, but the overall CAGR in past five years has been only in the range of ~15%-
16%8. Therefore, a herculean task for the Government at this point is making the investment climate
conducive to attract both domestic and foreign investment into manufacturing.
Low-key Investments in R & D:

The productivity gains have been consistently low for firms in Bangladesh on account of lack of
innovation and negligible investments in technology. In 2010, the allocation for R&D stood at just
0.6% of the GDP9. The manufacturing sector in particular has been subjected to a low R&D spending
as a proportion of firm sales value and there exist minimal employment opportunities for R&D
professionals. Barring few sectors like RMG and Pharmaceuticals, most of the sectors have witnessed
minimal investments in technology and innovation citing funding scarcity as the major constraint.
Bangladesh
160
Nepal
Pakistan
Indonesia
Vietnam
140
Sri-Lanka
India
120
China
Thailand
100
Malaysia
2012
80
Singapore
60
Korea
South
Japan
40
USA
UK
20
0
0 20 40 60 80 100 120 140 160
2000
Figure 12: Knowledge Economy Index.
8 PwC Analysis, Bangladesh Bank
Source: World Bank
9 SFYP

PwC Page 29 of 228
The chart above gives the Knowledge Economy Index-(KEI)10 evaluated by World Bank based on an
average of four indices:
1. Economic Incentive and Institutional Regime (EIR)

2. Innovation and Technological Adoption
3. Education and Training
4. Information and Communications Technologies (ICT) Infrastructure
As seen from the chart, Bangladesh ranks the lowest amongst other Asian economies including Nepal.
Erratic Power Supply

The manufacturing sector has been constantly operating at low capacity utilization levels owing to
scarcity of power supply. Exponential growth in electricity demand induced by strong economic
growth performances has strongly outpaced the available electric supply leading to a situation of acute
power shortages. Currently, the total public and private sector installed capacity including all types of
power generation is 10,618 MW. Out of this the maximum generation achieved stands at 7418 MW (on
a daily record basis) which is only 70% of the total installed capacity11. The graph below suggests that
the actual peak generation achieved in 2010 & 2014 is lower than the peak demand. This situation, if
carried forward in the future, will continue to impact the manufacturing sector resulting in lower
utilization and higher costs. Also it will have cascading effects on achieving the targets of the
perspective plan.
25000
20000
Demand-
Supply Gap
15000
10000
5000
0
2010 2014 2015(e) 2020(e)
Installed Capacity Peak Demand Peak Generation
Figure 13: Bangladesh Power scenario
10 World Bank
11 Bangladesh Power Supply Board

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2.2. Doing Business in Bangladesh- Emerging

Prospects
Economic development and attracting industries for accelerating domestic growth requires certain
critical enablers including access to market, presence of supporting infrastructure (power, water
supply, connectivity etc.) and supportive policies and enabling environment. Collectively, these factors
decide the ease of doing business in a country. This section presents an overview of business
environment in Bangladesh and an analysis of how the country fares in comparison to other relevant
economies.
2.2.1. Benchmarking Bangladesh

The Doing Business Rankings report by World Bank gives aggregate ranking to 189 economies in the
world based on the ease of doing business indicator that measures and benchmarks regulations
applying to domestic small to medium-size businesses through their life cycle.
India 134
Bangladesh 130
Regional Average (South Asia) 121
Indonesia 120
Pakistan 110
Nepal 105
Vietnam 99
China 96
Sri Lanka 85
Japan 29
Thailand 18
UK 10
Malaysia 6
Figure 14: Ease of Doing Business Rankings of Comparator Economies 2014
Source: World Bank, Doing Business website
The aggregate ranking with few comparator Economies and regional average suggests that Bangladesh
ranks lower at 130 as opposed to the regional average of 121. However Bangladesh has climbed up the
ladder as compared to last year’s position of 132. This indicates that the government is on the path of
creating a regulatory environment conducive to operating a business.
Although the Economic Zone development would be incentivized & facilitated by BEZA, it is
important to understand the parameters that define the “Doing Business” ranking, and the underlying
issues that impact these parameters. Identifying and addressing these issues, accordingly, is equally
important to complement efforts of BEZA in the development of industrial infrastructure in the
nation.

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Starting a business
200 Dealing with construction
Resolving insolvency
150 permits
100
Enforcing contracts 50 Getting electricity
0
Trading across borders Registering property
Paying taxes Getting credit

Protecting investors
Figure 15: Bangladesh ranks on 'Doing Business' topics
Of the various parameters being considered, Bangladesh ranked high (Rank 22) in terms of
‘Protecting Investors’. This parameter is a measure of extent of disclosure, extent of director liability,
ease of shareholder suits, all of which converge into strength of investor protection index.
United Kingdom 10
Thailand 12
Bangladesh 22
Pakistan 34
India 34
Sri Lanka 52
Regional Average (South Asia) 80
Nepal 80
Figure 16: Bangladesh's ranking on Investor Protection
Over the last few decades, Asian economies have been witnessing robust growth and have been the
hotbed for business growth. Asian economies have also continuously attracted investment from
western firms and are increasing share of global revenues to its kitty. In 2011, Asia contributed 19% of
global revenues of Western firms. In 2012, that figure rose to 22% and by 2017, this figure is expected
to rise to 32%. In Asia South-East Asia, South Asia and East Asia has gathered momentum and is
driving the investment opportunities from Western firms. According to the latest World Investment
Report published by UNCTAD, the following countries are nominated as the most promising
investment destinations founded on the interview survey to globally influential investors
 OECD: US, Germany, UK, Japan, Australia, France, Canada

 BRICS: Brazil, Russia, India, China, South Africa
 Growing Asia: Indonesia, Thailand, Malaysia and Philippines
 Emerging G20: Turkey, Mexico
Vietnam (ASEAN economy) is also emerging and has increased its share of manufacturing from
12.3% in 1990 to 21% in 2008, compared to Bangladesh’s share of manufacturing from 24% to 28%
over the same period. As per The Economist report, Over the past two years (2011 and 2010), Vietnam

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ranked just behind the “big three” of China, India and Indonesia in terms of investment. Vietnam has
long been a favourite antidote to rising manufacturing costs in China.
Competition for Bangladesh currently seems to be stemming essentially from two segments of its
regional neighbours:
i. APAC top performing economies- Japan, China and India

ii. ASEAN countries emerging as competitors to Bangladesh for investors- Thailand, Indonesia,
Vietnam and Malaysia.
12 Data is only for non-Asian companies

Source: Economist Corporate Network Asia Business Outlook Survey 2013
Business expectations for Asia Global business unit heads based

Pacific over 2012 in Asia
Our
expectatio
ns have 68.40%
declined,
15%
51.90%
45.60%
Our
Our expectatio
expectatio ns
ns have
are improved, 2011 2012 Will have atleast 1
unchanged 47% global BU head in
, 38% Asia by 2017
Figure 17: Improving Business Prospects of Asian economies – Survey of Business heads
Bangladesh’s economic development needs to leverage these emerging Asian prospects and harness
the benefits from attracting investment. The table below captures the key parameters of key Asian
economies including Bangladesh.

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Table 5: Bangladesh benchmarking with APAC
Japan China India Bangladesh Thailand Indonesia Vietnam Malaysia
Share in 2.1% 4.6% 1.5% 1.7% 1.3% 1.8% 1.3% 1.5%

Global
exports
Share in 2.5% 10.7% 12% 0.1% 1.1% 3% 0.5% 2%

Global
imports
FDI 5% 38% 10% 0.5% 3% 6% 9% 3%
M&A 36% 32% 1% _ 11% 2% _ 1%
Ease of 29 96 134 130 18 120 99 6

Doing
Business
Rankings
As can be seen above, Bangladesh is currently lagging behind most Asian economies in several aspects
which underline the need for reforms. The benchmarking above also indicates that specific strategies
are needed to increase competitiveness of Bangladesh’s industrial sector vis-à-vis its Asian
counterparts. Development of alternate industrial sectors therefore has a strong potential to propel
the country onto a successful growth trajectory.
2.2.2. Improving prospects: 2009-2014 key developments

Although Bangladesh currently does not compare positively with most Asian economies, several
reforms have been undertaken at various levels to transform the business environment of the country.
The Doing business report gives an extensive coverage of key reforms in past 5 years which ideally
serve to stimulate an economy’s overall ranking year on year.
The key reforms undertaken in Bangladesh are tabulated below. Each parameter affecting the overall
ranking is evaluated in detail.

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Table 6: Key industrial reforms for Bangladesh
Factors 2009 2010 2011 2012 2013 2014

Starting a Simplification Launch of Elimination No Reform No Reform automating
Business of online of the
Registration business requirement registration
formalities name to buy process and
clearance adhesive reducing
and stamps and the time
registration further required to
Processes enhancement obtain
of online a trading
registration license and
system to complete
the tax and
value added
tax
registration
Dealing with No Reform No Reform No Reform No Reform No Reform No Reform
Construction
Permits
Getting - - - Moratorium Compulsion No Reform
Electricity on new on meeting 7%
Electricity of electricity
Connections needs through
leading to Solar Energy
delays
Registering Increased No reform Reduction of No reform No reform No reform
Property Efficiency of property
internal Transfer Tax
organization
and
Management
by Municipal
Deed registry
office
Getting No reform No reform No reform No reform Improvement No reform
Credit of access to
credit
information by
Establishment
of an online
platform for
sharing such
information.
Protecting No reform No reform No reform No reform No reform No reform
Investors
Paying taxes No reform Reduction No reform No reform No reform No reform
of
Corporate
Income Tax
rate
Trading No reform Automation No reform No reform No reform No reform
across of customs
Borders clearance
procedures
at the
Chittagong

PwC Page 35 of 228
port of
Bangladesh
Enforcing No reform No reform No reform No reform No reform No reform
Contracts
Resolving No reform No reform No reform No reform No reform No reform
Insolvency
The reform push combined with Government’s vision has helped in creating some positive business
sentiments in the country although the potential for further enhancement remains immense. Aspects
that create the overall business climate and the key challenges facing them follow.
The table below captures the key aspects of the overall business climate in Bangladesh.
Table 7: Business climate in Bangladesh
Business Environment a) Bangladesh offers the most liberal investment climate and FDI
regime in South Asia, with no prior approval requirements or
limits on equity participation and repatriation of capital,
dividends, profit and income for foreign investors.
b) The Foreign Private Investment (Promotion and Protection) Act,
1980, which deals with promotion and protection of investment in
Bangladesh, ensures equal treatment for local and foreign
investors.
c) Bangladesh offers a competitive location for doing business in
terms of costs, inputs, human resources, market access, facilitation
etc.
d) Investing in the appropriate sector in Bangladesh can yield higher
returns than most other competing locations, with lesser risks.
e) Bangladesh continues to make all possible efforts to reduce the
costs of doing business and minimize risks and uncertainties.
f) Bangladeshi products enjoy duty free and quota free access to
almost all the developed countries.
Infrastructure Readiness a) Labour Force : 53.7 million

b) International Airport: Total 3
c) Domestic Airport: Total 7
d) Seaport: Total 2
e) Inland River Ports : More than 10
f) EPZ : Total 8
g) Installed Power Generation Capacity:10445 MW
h) Financial Market: 56 banks, 29 Financial Institutions, 2 Stock
Exchanges, 62 Insurance Companies
i) Road Transport :More than 20,000 km roads carry about total
70% of country’s total passenger and cargo
j) Rail Transport: Total 2,745 km cover 32% total area of Bangladesh
k) Waterways: 5200-8372 km
The Economy (Year 2014) a) National Budget FY 2014-2015 : Tk.2505.06 billion
b) GDP : US$ 129.86 billion
c) Per Capita Income : US$ 1190
d) GDP Growth : 6.01%
e) Inflation Rate : 7.44%
f) Investment Rate : 24.4% of GDP
g) Public Spending : 18.3% of GDP
h) Foreign Exchange Reserve: US$ 21467.1 million
Source: Bangladesh Bank, BBS, PwC analysis

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It may thus be inferred from the above that in addition to the existing and unexplored potential for
industrial development, the nation is taking conscious efforts in improving the business environment
in the country. This is essential given that Poverty and unemployment continue to be the major
problems facing Bangladesh’s economy. Identification and development of sustainable means of
livelihood for its masses and making use of the abundant labour is the nation’s natural priority.
Organised industrial development being a sustainable source of job opportunities and income for all
strata of society provides strong avenues for growth.
Accordingly, development of economic zones to drive industrial development is a logical course of

action to meet the above objectives. It may be noted that other Asian countries like Thailand and
Indonesia have taken the EZ route to come out of poverty in last 25 years and it is the right time for
Bangladesh to adapt some of the learnings. Success will be determined by how soon the country is able
to overcome some of the key challenges facing industrial growth in Bangladesh.

PwC Page 37 of 228
3. Industries Assessment
As described in the Introductory section, the identification of industrial sectors for exploration at
Mongla Economic Zone requires a multipronged approach that relies on existing strengths of the
region, Bangladesh’s vision for development as well as performance of industrial sectors globally.
This section presents an analysis of industries globally to identify those expected to experience strong
future performance and then uses it along with the understanding developed in previous sections to
estimate the industrial potential at Mongla. This assessment has been undertaken to get a directional
view of the broad type of industries / sectors that may align to Mongla.
Further, a detailed primary survey has been undertaken to finalize the sectors/sub sectors that may
align to the proposed EZ. As a part of the process, the section delves deeper into Bangladesh specific
and site specific strengths/ challenges to clearly identify industrial sectors as well as sub-sectors
respectively for implementation at Mongla Economic Zone. The final section assesses each of the
target finalized sector to estimate demand for the particular identified sub-sector at Mongla Economic
Zone.
3.1. Framework for Industry Identification

The methodology to identify industries at Mongla is based on the filtering mechanism as described
above. The section on global analysis includes an overview of top and emerging economic sectors
world over and a narrowed down Asia Pacific view that benchmarks Bangladesh with relevant Asian
economies. Determination of top and emerging sectors is based on key indicators –EXIM, FDI and
M&A data. This is followed by a parametric analysis of Bangladesh’s major industrial sectors /sub-
sectors to further pin down those that need focus. Parameters here include those pertaining to
performance of a particular sector – Gross Value Added, Employment etc. As the final step,
understanding of Mongla region, developed in section 3, is mapped and used to identify indicative
industrial sub-sectors for implementation at Mongla Economic Zone.
As a next step, the indicative findings from the above steps have been triangulated by a detailed
primary survey of 150 prospective tenants that may align to the proposed Mongla EZ. An
understanding of the actual land demand, incentive structures to attract the tenants (sector wise) and
other relevant inputs has been developed to finalize the sectors/ sub sectors. The following figure
schematically reflects the methodology used in industry identification for the proposed Mongla EZ:

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Figure 18: Industry identification methodology
Source: PwC analysis

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3.2. Global Economic Review

The industrial strategy for Mongla EZ has to focus on leveraging the region’s existing strengths.
However, the larger challenge lies in structuring the strategy in a way that it is also aligned to global
and country level trends in industrial development and thereby serves to boost Mongla EZ’s
contribution to country’s economic growth. This section therefore develops a perspective around
which industries are doing well globally and which industries Bangladesh as an emerging economy
would benefit from. The idea is to arrive at a common set that includes both established and emerging
industries that have the potential to support development at Mongla EZ keeping in view both current
opportunities as well as future possibilities.
As a first step, three key parameters -– Export/Import trends, FDI trends & M&A trends have been
used to assess the performance of merchandise/manufacturing sectors globally. The parameters have
been selected based on priorities set by the strategic initiatives defined by the Government of
Bangladesh. In addition, multilateral trade regime and regional co-operation too have been identified
as key steps towards achieving the targeted growth. Each of these is captured in the following sections.
3.2.1. Trade scenario

The objective of this section is to assess commodities that are doing well in terms of their share in
trade and identify those commodities that are exhibiting high positive growth for future (with the
underlying assumption that such commodities may become important in future and accordingly
should be in the consideration bucket for the upcoming EZ in Mongla)
In 2004, total trade (merchandise) was US$ 141.88 Trillion that constituted of exports of US$ 63.84
Trillion and imports of US$ 78.15 Trillion. In 2013, global trade has grown ten times to US$ 790.99
Trillion market (at current prices) with exports of US$ 300.4 Trillion and imports of US$ 490.7
Trillion.
Table 8: Global trade 2013
Share in Exports Share in Imports

(2013) (2013)
UAE 12% 8%
China 5% 11%
USA 12% 5%
Saudi Arab 3% 7%
Switzerland 0% 7%
Germany 2% 3%
Singapore 5% 2%
Iraq 0% 4%
Indonesia 2% 3%
Hong Kong 4% 2%
Japan 2% 3%
Kuwait 0% 3%
Korea 1% 3%
Qatar 0% 3%
Belgium 2% 2%
Australia 1% 3%
Iran 1% 2%
UK 3% 1%
Nigeria 1% 2%
Malaysia 1% 2%
Rest of the World 42% 25%
Source: WTO & PwC analysis

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In terms of participation, 20 economies tend to dominate 70% share of total trade in 2013. However
trade balance for most of these dominant economies is negative indicating higher imports than
exports from the country. While 15 of these 20 economies have a trade deficit with imports exceeding
exports (comprising UAE, China, Saudi Arab, Switzerland, Germany, Iraq, Indonesia, Japan, Kuwait,
Korea, Qatar, Belgium, Australia, Iran, Nigeria and Malaysia) rest of the 5 economies have a trade
surplus (comprising USA, Singapore, Hong Kong, Singapore and UK).
Over the past 10 years, Asia and the Pacific have gained a significantly larger
share of world merchandise trade. In 2012, region surpassed Europe to become
world’s largest trading region with share of 37% in global exports and 36% in
global imports.
While Bangladesh’s rank in total trade dropped 14 positions from 21 in 2004 to 35 in 2013 with trade
of US$ 1.81 Trillion against US$ 5.78 Trillion in respective years, its economy witnessed a growing
trade surplus that increased from US$ 1.66 Trillion in 2004 to US$ 4.5 Trillion in 2013.
Further, a commodity wise analysis to identify commodities showing better trade prospects in future
has been undertaken. Such commodities include commodities that have significant contribution to
global trade as well as those commodities that are exhibiting higher growth trends in the global trade.
The objective (with a long term rationale) being to identify commodities those are although currently
traded weakly, but may grow up to be key contributors of export over time in future. Accordingly in
our analysis for Mongla Economic Zone, sectors currently not looking strong but having a strong
future potential have been considered for exploration.
7,255
5,932
2,938
2,420
1,738 2,001 1,745 1,457 2,033
1,031 1,263 1,348
803 684 552 522 454 730 766
537 406 543
205 182 279 369
2003 2013
Figure 19: Sector-wise export trend 2013, USD Bn
Source: WTO- International Trade Statistics 2012
In terms of sector wise share of trade within merchandise, Fuels & mining
products, Machinery and Auto & Auto equipment formed 50% of total exports
in 2013 globally

PwC Page 41 of 228
Fuels & mining products, machinery, auto and auto parts formed 50% of the total exports within
merchandise trade globally. In addition, other predominant sectors based on their export share in
2013 were Textiles, Food Processing, Pharma, Agricultural products and Chemicals.
Electronic data processing and office… -1% 3.9%

Textiles & Clothing -2% 7.0%
Integrated circuits and electronic components -1% 6.8%
Auto & Auto products -3% 6.3%
Iron and steel -1% 9.5%
Office and telecom equipment -6% 7.0%
Pharmaceuticals -1% 9.8%
Transport equipment -5% 7.0%
Food -4% 10.2%
Agricultural products -4% 9.8%
Chemicals -5% 9.6%
Machinery and transport equipment -15% 7.3%
Fuels and mining products -19% 15.2%
% of global Exports share (2013)
Figure 20: CAGR (2003 - 2013) and 2013 Global export share
Source: WTO- International Trade Statistics 2012
3.2.2. FDI trends

The relevance of foreign direct investment to global economic growth cannot be undermined. This is
especially important for developing and emerging economies. Foreign direct investment has many
advantages for both the investor and the recipient country. One of the primary benefits is that it allows
free movement of funds to businesses that have the best prospects for growth thereby ensuring best
returns for investments with the least risk. FDI trends therefore help gauge the perspective of global
investors on a particular industry and its attractiveness.
Global foreign direct investment (FDI) fell by 18 % to $1.35 trillion in 2012. This sharp decline was in
stark contrast to other key economic indicators such as GDP, international trade and employment.
The post crisis FDI recovery that started in 2010 and 2011 has currently stalled with global FDI figures
falling to below the pre-crisis level. UNCTAD‘s World Investment Review 2013 takes a view that FDI
recovery will now take longer than expected as significant risks persist, including structural
weaknesses in the global financial system, weaker growth in the European Union (EU) and significant
policy uncertainty in areas crucial for investor confidence.
China and Hong Kong were the second and third largest FDI recipients worldwide respectively with
Singapore, India and Indonesia also among the top 20. Driven by continued intraregional
restructuring, lower-income countries such as Cambodia, Myanmar, the Philippines and Vietnam
were attractive FDI locations for labour-intensive manufacturing. In West Asia, FDI suffered from a
fourth consecutive year of decline. Total outward FDI from the region remained stable at $308 billion,
accounting for 22% of the global flows (a share similar to that of the European Union (EU)). Asia

PwC Page 42 of 228
pacific region (East Asia (including Japan), South East Asia and South Asia) accounted for about half
of FDI inflow of World.
206.05
147.61
55.39
43.67
30.42 24.65
10.97
2.39
2011 2012
East and South East Asia South Asia Japan World
Figure 21: Green field FDI inflow in Asia Pacific (USD billions)
Source: UNCTAD-World Investment Report 2013
In terms of composition, manufacturing sector attracted 43% of total FDI almost equal to service
sector share at 52%. However manufacturing was the sector with the largest decrease in FDI project
value in absolute terms, originating mainly from a decline in the value of Greenfield projects across all
three groups of economies – developed, developing and transition economies. In fact, Greenfield FDI
flows to developing Asia decreased by 7% to $407 billion in 2012. This decline was reflected across all
sub-regions but was most severe in South Asia, where FDI inflows fell by 24%. Globally, value of FDI
in Greenfield manufacturing projects fell from US$ 453 billion in 2011 to US$ 264 billion in 2012.
The three industries in which FDI declined most in 2012 were metals and metal products, coke &
petroleum products and Chemical and Pharma sectors.
100%
80%
60%
40%
20%
0%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Textiles, clothing and leather Motor vehicles and other transport equipment
Chemicals and chemical products Other manufacturing
Electrical and electronic equipment Food, beverages and tobacco
Rubber and plastic products Non-metallic mineral products
Machinery and equipment Precision instruments
Metals and metal products Coke, petroleum products and nuclear fuel
Wood and wood products
Figure 22: Sectorial shares in Greenfield FDI projects globally

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Source: Survey of Manufacturing Industries- SMI 2012
In terms of sectoral composition of FDI in Greenfield projects, the shares of sectors have
remained consistent over the past 10 years, with automobile & transport equipment,
chemical & petrochemical, electrical machinery, electronics, metallurgical industry, food
processing, beverages & tobacco receiving the highest shares of FDI.
At an Asia Pacific level, the manufacturing sector break up indicates that Chemical and Chemical
products, Metals and metal products, electrical and electronics and auto sectors are the highest
contributors of Greenfield FDI in manufacturing.
2012 21% 22% 18% 39%
2011 27% 24% 23% 26%
Chemicals and chemical products Metals and metal products

Electrical and electronic equipment Motor vehicles and other transport equipment
Figure 23: Greenfield FDI projects by industry in Asia Pacific, 2011–2012

In comparison to other ASEAN members, Bangladesh is lagging in terms of FDI inflow which stood at
US$ 1.59 Billion in 2013. Textiles and Pharmaceuticals are the top sectors attracting FDI in
Bangladesh. However, based on data from IMF Balance of Payments database13 Bangladesh was
among the top 20 economies (ranked 7) with highest inward FDI rates of return in 2011 at 22%.
13 Source: UNCTAD

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World 7.20%
Paraguay 17%
Solomon Islands 18%
Myanmar 19%
Bangladesh 22%
Kazakhstan 26%
Peru 27%
Nigeria 36%
Kyrgyzstan 41%
Behrain 50%
Angola 87%
Figure 24: Top 10 economies with highest FDI rate of returns (%) 2011
Source: International Monitory Fund (IMF) Balance of Payments database
3.2.3. Mergers and Acquisitions (M & A)

Inorganic growth is one of the most widely used strategic tools for business expansions today. Since
last two decades, the liberalization and consequent globalization and privatization has resulted into
tough competition for businesses across the globe. Corporate restructuring has facilitated thousands
of companies to re-establish their competitive advantage and respond more quickly and effectively to
new opportunities and unexpected challenges. Merger & acquisition trends therefore are a vital tool
with potential to provide insights on attractiveness of a sector for Bangladesh.
Value of cross-border M&As globally stood at US$ 348.75 Trillion in 2013. In terms of purchaser
economy, United States, Japan and China formed ~ 50% of total cross-value deals. As a seller
economy United States formed 17% of share and other developed economies of France, Germany,
United Kingdom, and Canada accounted for 22% of share. The composition has remained the same
over last 10 years with domination by the three economies - United States, Japan and China.
M & A purchase values M & A sales value United

Kingdom,
Germany, Germany,
Belgium, 8%
2% 5%
4% Canada, 9% France, 3% Netherland
Thailand, s, 7%
Rest of
5% Rest of
World, 25% Norway,
United World,
2%
States, 17% 25%
Hong Kong,
Japan, 16%
Singapore, United
Singapore, 5% 3%
China, 14% China, States, 17%
2%
British 8%
Virgin
Malaysia, Islands,
1% Canada, 7%
8%
Indonesia, Australia,
1% Mexico, 5% 3%
Korea, 1%
Figure 25: Country wise M & A deals by Seller and purchaser in 2013

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Services sector has been a key area of M&A activity, with close to 49% of the deals happening in this
sector (US$ 98.38 Trillion in 2013). Manufacturing sector constituted 44% share at US$ 45.31 Trillion
in 2013.
0% 0%
4% 0% 0%
1% 0%
2%
3% 0%
7% 2% 1% 0%
2% 0%
6% 0%
1%
6% 3% 0% 6%
15% 2% 3% 7% 4%
11% 6% 17% 6%
10% 4% 8% 5% 8%
3% 4% 7%
5% 5% 1%
4% 4% 8%
14% 3%
6% 24% 16%
2% 26% 14% 22% 5%
26%
3% 6%
14% 5%
20% 17% 26% 0%
5% 8%
3% 10% 14% 19%
10% 10%
1%
1% 8% 3% 16%
3%
26% 13% 14% 19%
10% 22%
15% 26% 11%
40% 6%
18% 12%
11% 42%
25% 25% 21% 12% 26%

13% 24%
14% 16%
9% 5% 7%
4%
-1%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Food, beverages and tobacco Chemicals and chemical products Electrical and electronic equipment
Non-metallic mineral products Textiles, clothing and leather Metals and metal products
Pharmaceuticals Machinery and equipment Paper and paper products
Other manufacturing Wood and wood products Rubber and plastic products
Motor vehicles and other transport equipment Manufacture of furniture Publishing and printing
Figure 26: Sectorial shares by M & A deals globally
In terms of sectoral composition of M&A activity food processing, beverages & tobacco,
chemical & petrochemicals, Textiles, clothing and leather, Electrical machinery &
electronics, Non-metallic mineral products and Pharmaceuticals industry dominated
globally in 2013
Non-metallic mineral products, Textiles, clothing & leather and Food, beverages & tobacco industry
have shown tremendous growth in M&A deals among other sectors from 2003 to 2013.
3.3. Parametric Analysis of Bangladesh’s key

Industrial sectors
The above section presented a macroeconomic perspective to evaluate industrial trends worldwide
and give a perspective of the sectors that gain importance not only in the global/Asia-Pacific trade but
also be important to Bangladesh. This section undertakes this analysis further and reviews
Bangladesh’s industrial sectors for their performance in terms of a few key parameters like output and
employment. The objective here is to understand which sectors are currently performing better in the
country and whether these sectors may need to be included for exploratory analysis being undertaken
for Mongla EZ. This section builds upon the general understanding developed in chapter 2 on
Bangladesh’s industrial landscape.

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There has been a significant change in the composition of secondary sector in Bangladesh over the
years. The share of manufacturing in GDP has increased from about 10 % in 1988-89 to nearly 18% in
2008-0914.
17.78%
15.60%
12.25%
9.89%
9.13%
7.67%
6.18%
5.69%
1.57%
1.42%
1.03%
0.28% 1% 1.25%
0.01% 0%
Manufacturing Construction Utility Mining
1978-79 1988-89 1998-99 2008-09
Figure 27: Changing Composition of the Industrial Sector in terms of GDP Share
Source: Bangladesh Economic Census 2013
The Perspective Plan of Bangladesh 2010-2021 has emphasized the need for gearing industrialization
further to achieve the macroeconomic performance target of 8% growth by 2015 and 10% growth by
2021. The overarching goal for the country’s industrialization, as the document of Perspective plan
notes, is to enhance the contribution of industries to GDP to 40% over the next decade, with a share of
30% for the manufacturing sector.
8%
78.3%
14%
53% 53% Share in VA (%)
60% 66%
37% 45.9% Share in employment (%)
55.1%
44.1%
21.1%
47% 41% 47%
40%
34% 10.6%
23.1% 5.6% 2.7%
0% 1.7%
0% 0% 0% 0% 11.4%
Government Private 0%
Government Joint venture Foreign 6.9% 1.6% 2.32%
& private (local &
jointly foreign)
Micro Small Medium Large
Figure 28: Industrial establishments by ownership & size in 2012 and declining share of Public Enterprises in
GVA & employment
At present, the manufacturing sector in Bangladesh is dominated by Micro, Small and Medium scale
Enterprises (MSME) units. Out of total 42,792 industrial units in the country, 92% belongs to MSME
category15. It may however be noted that according to BBS Economic Census 2001/2003 combined
share of MSME in terms of total establishments and employment stood at 99.84% and 82%
14
Bangladesh Economic Census 2013
As per BBS industry classification 2005 Large establishment have Total persons engaged (TPE) > 250, Medium 100<= TPE
15
>250, Small 25<=TPE >=99, and Micro 10<= TPE>=24

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respectively16. This indicates an increasing trend of large scale industries in Bangladesh over the last
decade. Further, in terms of gross output17, large industries have a dominant share of gross output at
47% followed by medium scale units constituting 26% share while Small and micro industries form
27% of total output in 2012.
6%
Employment 5%
24% 8% 15%
47% 5%
14%
41%
22%
Units
47% Output
GVA 59%
21%
26%
37%
23%
Micro Small Medium Large Micro Small Medium Large

Figure 29: GVA & Output (in million Tk.) and Employment by industry type in 2012
A review of employment figures highlights the dominance of large industrial units. In terms of the
specific sectors, it needs to be noted that Textiles, Wearing Appeals, Food processing, Tobacco
products, Basic metals, and non-metallic mineral products are dominant in country. Together these
five sectors constitute ~75% of share in terms of establishments, Output, GVA, employment and
Investment as indicated in the figure below:
16 As per BBS Economic Census 2001/2003 Large establishment have Total persons engaged (TPE) > 100, Medium 99<= TPE
>50, Small 10<=TPE >=49, and Micro 1<= TPE>=3
17 Gross output comprises total ex-factory value of products and by-products manufactured by the industries

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2%
3% 9% 8%
17% 14%
11% 7%
7% 7%
16%
55% 28%
34% 36%
26%
21%
13% 14%
16%
20%
11% 11% 9%
6%
No. of Gross Output GVA Employment Investment
establishments
10 Food products 11 Beverages
12 Tobacco products 13 Textiles
14 Wearing apparel (Ready made garments) 15 Leather & related products
16 Wood & wood products except furniture 17 Paper & paper products
19 Coke & refined petroleum products 20 Chemicals & chemical products
21 Pharma 22 Rubber and plastics products
23 Non-metallic mineral products 24 Basic metals
25 Manufacture of fabricated metal products, except machinery and equipment 26 Computer, electronic & optical products
27 Electrical equipment 28 Machinery
29 Motor vehicles, trailers and semi- trailers 30 Other transport equipment
31 Furnitures 32 Other manufacturing
Figure 30: Sector-wise no. of establishments, Output, GVA, employment and Investment in 2012
The next figure that follows shows the trend in industrial output for various BSIC sectors in
Bangladesh.

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1200
1100
Index of Industrial Production by Industry
1000
(Base : 1988-89 =100)
900
800
700
600
500
400
300
200
100
0
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
311-312 Food manufacturing 3114 Fish & Sea Food (shrimps & froglegs) 313 Beverage Industries 314 Tobacco manufacturing
324 Leather & leather products 325 Mfg. of footwear 331 Wood product except furniture 332 Wooden furniture
341 Mfg. of paper & paper products 351 Drugs & pharmaceuticals 352 Mfg. of industrial chemicals 356 Mfg. of rubber products
362 Mfg. of glass & glass products 371 Iron and steel basic industries 381 Mfg. of fabricated metal 383 Mfg. of machinery (non-electric)
384 Mfg. of electric machinery 385 Mfg. of transport equipments 3211 Cotton textile 3213 Jute textile
3612 Ceramic 3692 Cement
Figure 31: Quantum Index of Industrial Production (Output) by Industrial Groups in Bangladesh

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A closer look at the historic trend indicates that these dominant sectors are low on production indices
compared to other sectors’ performance. Tobacco manufacturing, glass and glass products and
Cement manufacturing are positioned better relative to above mentioned sectors. Drugs and
Pharmaceuticals and manufacturing of Foot wears are among the sector with highest production
indices in Bangladesh. Clearly greater thrust is required to match the production of these dominant
sectors with Factors of Production (FoP) in the Bangladesh economy.
In terms of employment indices and productivity, the same trend continues where sectors of Paint and
Varnishes and Petroleum products (Chemicals and Petrochemicals) rank higher. Cement is the only
sector that has also shown strong position in terms of employment indices and productivity. Jute and
cotton are among the least productive sectors for industrial labour deployment.
250
Index of Industrial Employment by Industry
200
(Base : 1988-89 =100)
150
100
50
0
2004-2005 2005-2006 2006-2007 2007-2008 2008-09 2009-10 2010-11
Jute Cotton Paper Cement Fertilizer Petroleum Paints and
products varnish
Figure 32: Employment Indices of Industrial Workers in Select Industries in Bangladesh

800
700
Index of Industrial Labour by Industry
600
(Base : 1988-89 =100)
500
400
300
200
100
0
2004-2005 2005-2006 2006-2007 2007-2008 2008-09 2009-10 2010-11
Jute Cotton Paper Cement Fertilizer Petroleum Paints and
products Varnish
Figure 33: Productivity Indices of Industrial Labor in Select Industries in Bangladesh


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3.4. Bangladesh Industry Vision-Review of

Perspective Plan 2021
Global review of industrial sectors along with a review of Bangladesh’s strengths as discussed in the
previous sections provides the base for prospective industries that can benefit Bangladesh if suitably
developed. However, this leaves a scope for development of those industries which might not be
Bangladesh’s traditional strengths but could be globally emerging with strong future potential.
Besides, ensuring diversification of Bangladesh’s exports and manufacturing sector calls for the need
to keep in perspective the country’s overall vision of the country for its development while shortlisting
sectors for exploration at new economic zone developments. This section therefore reviews the
country’s Perspective Plan 2021 that sets out Bangladesh’s overall vision along with targets for
industrial development.
3.4.1. Vision 2021

Vision 2021 envisages transforming the socio-economic environment of Bangladesh from a Low
Income status to early stages of Middle Income by 2021. This vision is mainly driven by the necessity
of elevating the living standards of the general population by laying down goals and strategies to
develop a framework for optimum utilization of country’s natural and human resources to their full
potential.
The key factor for achieving the vision 2021 is expected to be played by the Government in uplifting
the economic scenario with right interventions and policy framework which would facilitate private
participation and innovation.
Ensuring broad-based growth and food security
Addressing globalization and regional cooperation
Providing energy security for development and welfare
Establishing a knowledge based society
Development Building a sound infrastructure.

Priorities
Ensuring effective governance
Mitigating the impacts of climate change.
Creating a caring society

Figure 34: Development priorities as per Vision 2021
Promoting innovation under a digital Bangladesh.

3.4.2. Strategic Initiatives
Some of the areas that the perspective plan 2021 sets out as target areas for strengthening of the
domestic economy are as below –

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1. Macroeconomic Review
The Perspective plan aims at targeting annual GDP growth rate to be 8% by 2015 and 10% by 2021.
The growth rate has been stagnant at 6-6.5% since the inception of the perspective plan till date. The
table below gives key macroeconomic indicators both in terms of actual and targeted.
Table 9: Bangladesh Perspective Plan macroeconomic indicators

Indicators Benchmark Target FY15 Target FY21
FY10
Real GDP Growth Rate 6.1% 8% 10%
CPI Inflation 7.5% 6.0% 5.2%
Gross Investments 24.4% 32.5% 38.0%
Gross National Savings 30.0% 32.1% 39.1%
Exports (USD Bn) 16.2 38.8 82.0
Imports (USD Bn) 21.4 52.8 110.5
Unemployment Rate 30.0% 20.0% 15.0%
The targeted higher growth rate for GDP is based on the assumption that the investments will
significantly surge from 24.4% currently to almost 38% by 2021, most of which will come from
National Savings and FDI.
2. Global and Regional Co-operation
One of the major steps towards achieving the targets of the perspective plan is clinging on to the
concept of Globalized Economy. This gives a widespread access to ideas, technology, goods, services
and capital creating avenues for faster growth and development. The Government has identified
significant factors that will help Bangladesh in the future run as Remittance Inflows, FDI inflow,
Multilateral Trade regime and regional co-operation.
3. Promoting Rapid Industrialization
The targeted growth rate of GDP is envisaged to be more than 10% by 2021.The key emphasis of the
perspective plan hovers around increasing the share of manufacturing sector and in turn increasing
the share of Industrial sector in terms of contribution to GDP from the current level of 29 % to 37% in
the next 5-6 years.
Sectors (% of GDP) Average (FY04- Target FY15 Target FY21

FY10)
Agriculture 19.5 15.5 15.0
Industry 28.0 32.0 37.0
- Manufacturing 17.3 21.1 28.0
- Services 52.5 52.5 48.0
Manufacturing Sector which currently stands at ~17% of the total GDP in terms of contribution is
targeted to reach 28% by 2021 which demands an inherent double digit growth rate. As per the report,
apart from manufacturing activities sectors such as food processing; leather and footwear, textile and
clothing, pharmaceutical, ship building, production of toys, ceramics and furniture are likely to be the
main growth generators. And production of auto parts, electronics, and light engineering will be the
emerging sectors and will play a significant role in exports over the next few years.

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Focus Sectors18 for future industrial development:
1. Thrust on sectors – such as toys, agro-processing, auto parts, electronics and light engineering
beyond the traditional sectors such as Textiles, RMG, and Leather etc. to ensure
competitiveness of potential labour intensive manufactures.
2. Focus on SME based industrialization for catering to the growing domestic market and
ensuring linkages with foreign market for institutional support.
3. As per industrial policy 2010, emerging sectors like ICT -based sectors, food, beverages, light
engineering, high-end readymade garments, pharmaceuticals, ship-building and others will
be given an extra impetus in terms of policy support and incentives. (Bonded warehouse, IPs,
EZs, etc.)
4. Liberalization of capital market for ease of funding to the industrial sector.
5. Added focus on Jute industry with diversified product offering.
6. Apart from RMG exports, focus is diverted to building a global market for some important
non-traditional exports like footwear and leather products, light engineering products (bicycle
and electronics), pharmaceuticals, ceramics, jute goods, ocean-going ships, and some labour-
intensive products not yet on the export radar, since they are likely to grow at a much faster
rate
7. A special focus is laid on increasing exports to China especially for labour intensive
commodities like readymade garments, shoes, electrical goods, car parts, toys, kitchenware,
and multifarious consumer goods whose fabrication is less complex and demands relatively
low skilled workers .
8. Additional Focus on development of ICT sector in order to fuel the growth of service sector.
18 Verbatim from Planning Commission, Bangladesh

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3.5. Summary of sectors exhibiting growth potential

The discussions above can be summarized to determine an indicative list of the industrial sectors that
looks to be promising from a global perspective:
Sectors by Exports Sectors by FDI Sectors by M&A
Fuels Textiles, clothing and leather Food Processing

Highest Machinery Motor vehicles and other Chemicals and chemical
Share transport equipment products
Chemicals Chemicals and chemical Electrical and electronic
products equipment
Food Processing Electrical and electronic Non-metallic mineral
equipment products
Transport equipment Food Processing Textiles, clothing and leather
Telecommunication Rubber and plastic products Metals and metal products
equipment
Lowest Pharmaceuticals Non-metallic mineral Pharmaceuticals
Share
products
Manufacturers Machinery Machinery
Table 10: Top sectors based on global industrial analysis
Further, Bangladesh country assessment based on key parameters and its vision plan can be
summarized as below:
Table 11: Top sectors based on Bangladesh industrial analysis

Output Employment Investment Focus Sectors as
per Perspective
Plan 2021
Highest Textiles, clothing Coke & refined Textiles, clothing Textiles
Share petroleum products
Food Processing Motor vehicles and Food Processing Ready Made Garments
other transport
equipment
Non-metallic mineral Machinery Metals and metal Leather & related
products products products
Electrical and Electrical and Non-metallic mineral Light Engineering
electronic equipment electronic equipment products
Chemicals and Food Processing Pharmaceuticals Auto parts
chemical products
Pharmaceuticals Rubber and plastic Chemicals and Electronics
products chemical products
Lowest Leather & related Non-metallic mineral Leather & related Agro-processing
products products products
Share Metals and metal Machinery Electrical and Toys
products electronic equipment
The objective of this (and above sections) was to get a bucket list of sectors showing prominence at
global, Asia Pacific and Bangladesh level. Next section delves into the regional /site assessment to
understand which sectors may get aligned to the proposed EZ at Mongla based on regional
characteristics, economic assessment, infrastructure availability and site constraints.

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Collectively potential sectors for exploration at Mongla Economic Zone based on global analysis and
Bangladesh analysis are:
T Textiles Food Processing Pharma

Electronics
*
Auto & Auto Chemical and Non-metallic

Machinery
* products
Components# Petrochemicals
(* includes light engineering # includes Shipbuilding as part of Auto & Auto Components
(manufacture of other Transport equipment) as per Bangladesh Standard Industrial Classification
(BSIC code))

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3.6. Assessment of regional characteristics, site infrastructure

and constraints
This section assesses the Mongla region in terms of existing and proposed infrastructure, presence of
strategic assets like Mongla port and other advantages/constraints at the site. The objective has been
to undertake a SWOT analysis based on:
1. Industrial base assessment indicating region’s local strengths
2. Current/upcoming infrastructure and connectivity
This assessment will further filter down the above list, to assess the type of industries that may align
with Mongla.
3.6.1. Regional characteristics, Economy and Trade

Mongla is part of Bagerhat district in Khulna Division. Khulna division is one of the seven divisions of
Bangladesh. It is located in the south-west of Bangladesh neighbouring Dhaka and Rajshahi divisions
in north and India on the west.
Khulna Division with 22,285 sq. km area constitutes ten districts namely Bagerhat, Chuadanga,
Jessore, Jhenaidah, Khulna, Kushtia, Magura, Meherpur, Narail and Satkhira.
MONGLA EZ
Figure 35: Mongla EZ location on Map

Bagerhat
The total area under Bagerhat district is Mollahat Fakirhat Sadar Kachua
5% 4% 7% 3%
3959.06 sq. km19 constituting around 3% of
Rampal
Bangladesh’s total geographic area. Mongla 8%
occupies largest area with more than one-
third share of Bagerhat district. In this Mongla Sarankhola
37% 19%
district, about 16% of land area is under forest
19 Bagerhat district Statistics 2011-BBS

Chitalmari
Morrelgonj
5%
Bangladesh Economic Zones Authority 12%
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Figure 36: Area distribution of Bagerhat district

area and ~2% riverine area (Census 2011) while around 80% of the land is agricultural land20. Of this,
14% area is under permanent cropped area, while 86% falls under fallow and temporary cropped area.
Permanent
Riverine Others, cropped
area, 78583, area,
71.33, 2% 20% 53193, 14%
Permanent
fallow
Reserve Land area, area, 4294,
forest, 3029.24, 1%
600.04, 82%
16%
Temporary
cropped
area,
249898,
65%
3.6.1.1. Economic and regional industrial base assessment

In Bangladesh the industrial development is concentrated mainly in and around Dhaka and
Chittagong. Division wise distribution is as shown in figure below:
Figure 37: Industrial landscape of Bangladesh
20 Agriculture Census 2008

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In terms of economic units, Khulna division has fourth highest number of manufacturing units
with 14.2% share. Dhaka and Chittagong division have about half of manufacturing units in
Bangladesh.
30% 28%
25% 23%
20%
17%
In %
15% 14%
10% 9%
5%
5% 4%
0%
Barisal Chittagong Dhaka Khulna Rajshahi Rangpur Sylhet
Figure 38: Manufacturing units’ division wise share in Bangladesh
The table that follows presents a comparative economic assessment of different divisions within
Bangladesh.

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Pre-feasibility of Mongla Economic Zone, Bangladesh Draft
Table 12 : Division-wise comparison of prominent industrial sectors and other related statistics
Khulna Chittagong Dhaka Rajshahi Rangpur Barisal Sylhet

Prominent  Food Products  Ready-made  Ready-made  Food products  Food products  Food  Food Product
Industrial Sectors  Leather and Garments Garments  Pharmaceuticals  Pharmaceutical Products (Tea, Fish)
footwear  Textile and  Textile and related  Ceramic s (Rice, Fish,  Furniture
 Ship building related industries industries  furniture  Basic metals Betelnuts) manufacturing
 Basic Metals  Leather and  Leather and manufacturing  Shipbuilding
 Jute Industries Footwear Footwear  Light  Ready-made
 Wooden  Pharmaceuticals  Pharmaceuticals Engineering Garments
Furniture  Ship building  Food product  Jute & Jute
 Pharmaceutical  Plastic &  Light Engineering products
s Chemicals  Ceramic
 LPG  Furniture  Furniture
 Clay, Cement manufacturing  Plastics
 Ship building
Key Remarks Shrimps that Two-thirds of the 70% shipyards & 90% - - 4% of B’desh’s -
form the major 3000 Plastic units of leather & footwear shipyards are in
chunk of frozen are in units are located in Barisal division.
food exports are Chittagong/Dhaka and around Dhaka
dominant in
Khulna division
region region21
with 80% share.
One-fifth of Jute
manufacturing
industries forms
key industrial
base in the
division
Total No of 28821 30240 77675 32663 22549 18117 14702
Industrial Units22
Average Industrial 240.23 246.00 249.80 238.95 - - -
wages (Skilled)
Average Industrial 162.30 165.67 163.62 159.30 - - -
21 Technical Report on Leather Sector, January 2013, Bangladesh Inspired, PKF

22 District Statistics 2011, Bangladesh Bureau of Statistics
60 | P a g e
wages (Skilled)
Economically 59.50% 54.70% 59.60% 62.80% - 56.10% 59.30%
active population
61 | P a g e
As per the monthly statistical bulletin of Bangladesh bureau of statistics, the average daily wage
rate for industrial workers - skilled and unskilled at Khulna division is 240.23 and 162.30 taka
respectively, which less than that at Chittagong and Dhaka division. The availability of cheap
labour acts as a promoter of industrial growth at the division.
Despite these advantages, Khulna division and Bagerhat district is predominantly agricultural
and also majorly dependent on the Sundarban, Fishing and Mongla port. According to the
Agriculture Census 2008, the total holdings of the district are 339 thousand of which 68.57% of
holdings are farms that produce varieties of crops, namely local and HYV paddy, wheat, jute,
vegetables, spices, pulses, oilseeds, sugarcane23. However this forms good raw material input for
the industries (mainly rice mills, jute mills, oil mills and bamboo and cane industries) established
in the region. The scale of operation is still limited to SMEs and hence provides opportunity for
operationalizing medium to large scale industries in Proposed EZ.
In order to boost economic development in the country, the Government of Bangladesh has taken
many initiatives. Mongla EPZ is one such initiative by Bangladesh Export Processing Zones
Authority (BEPZA) to attract foreign direct investments and facilitate industrialisation in Mongla
region.
The major investment in Mongla EPZ comprises Food

Mongla Port (6m) Processing (44%), Textile (28%) and Leather,
contributing to more than 70% of the total investment
Deep Anchorage (8.5m) share. Other industries such as Light Engineering
Industry, IT & Hardware Industry contribute to 12% share
each.
Presence of Mongla EPZ for the proposed Mongla EZ has

its advantages as highlighted below:
91 km
Advantages of Mongla EPZ to Mongla EZ
1. Mongla EPZ will form as supplier/ vendor base

Akram Point for upcoming industries in proposed Mongla EZ
2. Due to Mongla EPZ investors are well versed with
Deep Anchorage (17m) Mongla as an investment destination
3. Mongla EPZ will highlight the region as preferred
destination when competing with major industrial
areas of Dhaka and Chittagong
4. Mongla EZ will provide additional industrial base
Deep Anchorage (13m)
for well-established industrial sectors in Mongla region vis a
vis Food Processing and Jute related industries
Hiron Point 5. Presence of Textile and light engineering
industries will also help align these industries for Mongla EZ
Outer Bar (6m)

Figure 39: Mongla Port Chanel
42 km
Bay of Bengal
23 Bagerhat, District Statistics 2011
62 | P a g e
3.6.2. Strategic advantages of proximity to Mongla Port

3.6.2.1. About Mongla Port
Mongla is one of the two main sea ports of Bangladesh, the other being Chittagong. It is also the only
international port serving south-west part of Bangladesh. Mongla is located alongside Pussur River in
Khulna about 131 km inland from the bay and its draft ranges from 7.0 m to 8.5 m with length
restriction of vessel being 225 m. The region’s immense potential has been untapped hitherto mainly
due the lack of connectivity to the rest of the country and siltation in Pussur River.
The total land area of the Port is about 950 ha, of which some 90% is at the waterfront location on
Mongla River. As on today, Mongla port has been designed for 11 concrete jetties.
At present two jetty berths are functional and can handle vessels with 6.5 m draft. On the other hand,
vessels with 7 m draft can be secured in the mooring berths, while vessels with 8.5 m draft can anchor
and carryout unloading and loading in the anchorage. There are four transit sheds and two
warehouses with the total capacity of 60,000 M ton. Mongla Port also has sufficient economic goods
handling equipment and vessels for smooth port operation.
The potential of Mongla port has not yet been utilized as in the case of the Chittagong port. The inbuilt
facilities available on shore are not fully utilized due to less traffic. The primary reason is insufficient
draft available in the main Passur channel. Other reasons include inadequate road connectivity with
the hinterland and major trade centers of the country and lack of sufficient manufacturing units in
and around the port installation. Government of Bangladesh is actively considering revitalizing the
port to become a national port with comparable capacity/activity to the Chittagong port.
Mongla port, at present, has trade links with almost all major ports of Asia, Middle East, Australia etc.
Total cargo handled by Mongla port during 2011-12 was around 2.61 million MT24. The Government
of Bangladesh plans to develop Mongla port with state of the art infrastructure facilities to reduce the
pressure on Chittagong port.
3.6.2.2. Trade Profile of Mongla Port

Analysis of the trade profile i.e. the import and export basket of goods from Mongla port has the
potential to provide strong leads into the type of industries that Mongla region is suitable for.
Out of total trade at Mongla, imports in the form of bulk or break bulks accounted for around 95% of
the total traffic. Food grains, fertilizer and clinker, slag, fertilizer, Gas, Machineries and Motor
Vehicles were among the major commodities handled at Mongla Port and together accounted for
around 90% of the total imports.
There has been increase in imports during the last 5 years, essentially due to an increase in import of
food grains, fertilizers, clinker and general economic goods by Bangladesh. The import growth during
the last 5 years was around 30% per annum, which is higher than the import growth at Chittagong
Port. One of the key factors responsible for the increase in import traffic is the fact that the
Government of Bangladesh has mandated import of some specific commodities through Mongla Port.
Total import traffic and type of traffic handled at Mongla Port during last 10 years are given in figure
below.
24 Mongla Port authority, www. mpa.gov.bd
63 | P a g e
Figure 40: Import through Mongla Port
Source: Mongla Port Authority
The share of exports is only 5% of the total traffic handled at Mongla port. Major export commodities
at Mongla include jute, jute products, frozen food/shrimps, clay tiles and betel nuts. Most of the
exported commodities are handled in containers. Further, there are few commodities such as coal,
garments, leather, machineries etc. that are expected to be handled by the port in coming years on
account of thrust and high traffic at Chittagong port.
Jute, jute products and shrimps accounts for over 90% of total exports at Mongla. There has been
continuous decline in export traffic at the Mongla Port since 2003 because of several physical
constraints. The export traffic has shown negative growth of 8% per annum in the last 5 years on
account of various reasons that include -
 Insufficient draft in the Pussur channel - low frequency of ships calling at Mongla Port
 Lack of efficient connectivity with major industrial centers
 Low industrialization in the hinter land such as Khulna, Rajshahi, Rangpur etc.
Figure 41: Exports through Mongla Port
Source: Mongla Port Authority
The traffic of major commodities such as Jute & jute goods, frozen economic goods and other general
cargo which are currently exported from Mongla port can be expected to continue. After
commissioning of a few planned development projects, the prospects are expected to increase for
commodities like garments, tea and leather. Moreover, import of heavy machinery & equipment,
fertilizer, food grain, sugar, motor vehicles, raw materials of industry etc. through Mongla Port may be
expected to increase from the present levels.
64 | P a g e
Connectivity enhancement through Padma bridge and canal dredging measures can to some extent
ensure that Mongla Port retains the entire traffic generated of its existing hinterland i.e. Mongla,
Khulna, Rajshahi, Rangpur, Barisal etc. In a favourable scenario, current exports and imports
originating from Mongla but using the Chittagong port can also potentially shift to Mongla port if
appropriate focus on infrastructure development (as highlighted in the subsequent sections) is given.
3.6.3. Critical infrastructure up-gradation

In Bangladesh, most of the industries are located in and around Dhaka and Chittagong. During the
stakeholder consultation process, it has been observed that, the business community of Dhaka and its
surrounding areas prefers Dhaka and Chittagong and is less interested to be in Mongla Port because of
number of constraints such as lack of fair connectivity through waterways, roads and bridges, low
draft at the jetty area of Mongla Port as well as in Pussur Channel because of siltation issue.
Because of the above constraints, economic activity at Mongla has been significantly low. Considering
this, in order to expedite the development of the Mongla including development of new proposed
project, it is important the following key development projects are implemented.
3.6.3.1. Dredging of Passur River

Dredging of Passur River is required for access of ships of 8.0 m draft. This is a critical factor for not
only the two jetties, but also for the future of the entire Mongla Port. Unless sufficient vessels can
reach Mongla Port, exporters and importers will have little confidence of economic goods reaching
desired destination in time through Mongla Port. Therefore, it is imperative that the Passur River
undergoes a capital dredging for desired draft. At least 5 m depth dredging needs to be ensured and at
some points i.e. in the Jetty front and Mooring Buoy Area, 7.5 m is required.
The Port authority has invited international companies for the work. Tender has been received by
MPA in January 2013 and the evaluation is completed and contract has been awarded to the preferred
bidder.
The layout of dredging areas is shown in the figure that follows.
65 | P a g e
Figure 42: Pussur Channel showing Proposed Area for Dredging

Feasibility study of Mongla Economic Zone
3.6.3.2. Construction of Padma Bridge

The Government of Bangladesh proposes to construct Padma Bridge at Mawa point to enhance connectivity to
Mongla region. All approval processes for undertaking the project has been completed and it has now become
a nationally accepted development agenda of Bangladesh. The procurement and land acquisition process have
already started. The bridge will connect the two seaports of the country as well as provide access of the largest
economic activity centre – Central Bangladesh to Mongla. The bridge is expected to revive the Mongla port,
which is now operating at very low capacity due to the long travel time required to reach Dhaka and other key
locations. Padma Bridge will also establish the missing link along the Asian Highway hence enhancing the
regional connectivity. Once Padma bridge is operational, the distance from Dhaka to Mongla will be reduced
to 170 Km. The bridge is therefore expected to give a major fillip to industrial development at Mongla. Padma
Bridge is expected to reduce the transportation distance from Dhaka to Mongla to less than that between
Dhaka to Chittagong.
3.6.3.3. Improving the Ferry Service at Mawa

Presently, there is no direct road route from Mongla to Dhaka due to lack of bridge on the river Padma. The
traffic towards Mongla and southern parts from Dhaka needs to cross the river Padma through ferry at Mawa
Ghat. The proposed linked project under PPP will improve the road route from Mongla to Dhaka. The
distance is approximately 225 km.
However, Mawa Ghat is a general purpose terminal with a significant volume of inland passengers and
economic goods traffic. It is not suitable for catering to export-import traffic unless a dedicated inland
container terminal is constructed.
Dhaka
Mawa Ghat
Proposed Dedicated
Terminal
Existing BIWTA
Terminal
River Padma
Mongla Port
Figure 43: Dedicated Ferry Service at Mawa

3.6.3.4. Dredging of Mongla-Ghasiakhali Canal

The main waterway route from Dhaka to Mongla Port (around 297 km) is currently closed due to siltation in
the Mongla-Ghasiakhali (M-G) and its nearby approach canals. This clogging has caused closing off the river
route from Mongla to Dhaka.
Currently, a detour is used by vessels via Sundarban Bogi canal. However, the Forest department imposes
restrictions in using the Bogi canal due to possible environmental concerns to the Sundarban. Therefore, MG
canal needs to be dredged to achieve at least Class I Level route (3.5m depth) in the canal for developing
better waterway access to the Mongla Port.
The following picture shows the path and location of the silted area:
Figure 44 Mongla to Dhaka River Route
The total length of the Mongla-Ghasiakhali Canal is 6.5 km. It is a man-made canal built in the seventies by
the Government. The water route of Mongla River to Ghasiakhali River is about 30 km. The silted water ways
is about 10 km, having 0.5 m draft only, in low water. At the time of high tide, the channel gets up to 2.5 m of
draft, when some vessels pass the canal. This silted portion of the route needs to be dredged. In the absence of
this route, the existing inland vessels have to ply additional 60 km of water way via Sundarban to reach
Mongla.
Mongla-Ghasiakhali canal is very important navigation route for passage of inland water vessels plying from
Dhaka to Mongla. Presently this canal has been silted up and inland river navigation is hampered. For getting
more economic goods traffic from Dhaka to Mongla Port, revival of this canal is very important, especially
after commissioning of the Pangaon ICT by May 2013.
The picture below shows the M-G route to the port.
Figure 45: Water route of Mongla River to Ghasiakhali River including M-G canal
In recent past, BIWTA started dredging this MG Canal, for an estimated quantity of 3 million cubic meters at
an approximate cost of Tk 170 /cum. A dredging company was hired by BIWTA, to dredge the channel with
three dredgers. However, it was observed that the rate of dredging silt was not enough to retain the
anticipated draft of 3 m, due to higher rate siltation. Therefore, the project was abandoned after dredging 0.2
million cubic meter silt. It is observed that the rate of siltation is higher than the rate of removing sand from
the bed, in those areas.
Moreover, higher rate of siltation may cause spoil dumping difficulties due to enough space required for it. It
may be noted that an area of about 500 meter width along the MG canal is owned by BIWTA, which makes the
spoil management easy for dredging activities. However, a hydrographic survey is needed to find the exact
siltation locations and mechanisms for silt removal.
3.6.4. Infrastructure connectivity at the Mongla EZ site

The proposed “Mongla Economic Zone” will be spread on 205 acre (83 hectare) of land. It is located near
Mongla EPZ, under Bagerhat district. Its geographical coordinates are 22° 28' 0" north and 89° 37' 0" east. It
is 105 kms from Jessore airport, 397 kms from Dhaka city and 664 kms from Chittagong port.
It is bounded by Upazila Rampaul in the north, Mongla EPZ on the south, the Mongla River in the east and
the Pashur & Gona river/Mongla Port Authority on the west. Mongla EZ stands on the river Mongla. Mongla
port is the second biggest seaport of the country. The proposed EZ is under Burir Danga union. Mongla Town
is at a distance of 1.7 km in southeast from the site (no road connectivity from N7). Mongla EPZ is abutting
the site.
Access of Proposed Mongla EZ site to major transport modes
 The proposed site is located 50 meters from the Jessore – Khulna – Mongla Road
 Located within 200 meters of the Port of Mongla
 An unfinished Rampal airport is 22 km from the proposed site
 Jessore airport is 105 km from the proposed site
Access to Urban Hubs from the Proposed site
 Dhaka -379 km
 Jessore – 105 km
 Mongla – 15 km
 Khulna – 50 km
 Border of India – 145 km
 Port of Chittagong – 664 km
Existing On-Site Infrastructure
 No onsite infrastructure available.

 Power lines are laid adjacent to the site but no power is available.
 A new substation is required for the site.
Existing Off-site Infrastructure
 Roads – The site has no access to any public road. The site may be accessed via the Mongla EPZ.
 Water – No water is available, water for the EPZ is piped from Rampal. The ground water present is
saline.
The details of the proposed development of the offsite infrastructure are delved in detail in the Master-plan
section.
3.6.5. Constraints at the site

As emphasized earlier, the existing constraints in the site have to be identified and due consideration has to be
given while planning the developmental activities and formulating the master plan. Accordingly a site visit
was undertaken to identify the constraints. The identified constraints are:
 Approach road - The site does not a have a proper approach. At present, the site is connected
by a temporary road adjacent to the existing EPZ. This road may be utilized for the
preliminary activities at the site till a proper and permanent approach is made available for
the site.
 Power Pole with line - Power line to the EPZ is crossing the site on the western side which
needs to be rerouted.
 Site filling - The soil type (up to 50ft depth) as per soil investigation report is of clay in nature
and hence increase in foundation cost. The proposed site is already filled up with dredged
material; hence increase in the cost is envisaged for road sub base and foundations
 Transmission network -Presently there is no water Transmission network and is to be
planned from Rampal
 High water table - As the site is surrounded by rivers, the water table is high. This will pose
difficulty in construction and accordingly needs to be incorporated in cost and time
parameters by the developer.
 Salinity - Ground water is saline and may pose difficulty during construction
 Availability of gas - There is no availability of gas in the nearby vicinity. This needs to be
planned by developer
3.6.6. SWOT Analysis

To understand and clearly identify key areas of strength and the competitive advantage of the proposed
economic zone, a SWOT framework assessment is also presented below. It highlights the existing issues
and threats. The analysis and understanding in this section has been further used for identification of
suitable industries for the Mongla Economic Zone.
Strength Opportunities
 Agro based and marine culture industry can
 Strong production of cash crops such as
flourish due to strong backward linkages
Jute, Cotton, Rice etc.
 Cost competitiveness to other Asian countries and
 Fishing is major activity in the region,
even division
hence availability of raw material
 Well connected via various mode of transport like
 Well-developed Inland water transport
road, rail, water and proximity to cities like
 Upcoming Mongla Airport and
Khulna
construction of Padma Bridge at Mawa
 Due to Mongla EPZ investors are well versed with
 Presence of prominent sectors including
Mongla as an investment destination
Food Products, Leather and footwear,
 Presence of Textile, Leather, Light Engineering
Ship building, Basic Metals, Jute
and other industries at Mongla EPZ would also
Industries, Wooden Furniture, help in aligning these industries with proposed
Pharmaceuticals, LPG, Clay and Mongla EZ
Cement in Khulna Division  Mongla EZ will provide additional industrial base
 Mongla EPZ will form as supplier/ for well-established industrial sectors in Mongla
vendor base for upcoming industries in region vis a vis Food Processing and Jute related
proposed Mongla EZ. At present, Mongla industries
EPZ has presence of textile, leather, light
engineering and IT Hardware
(electronics industry)
 The non-processing area development
for Mongla EZ will be an advantage for
social up-gradation to attract
employment in Mongla EZ
 On site and off site infrastructure
connectivity improvement initiative for
Mongla EZ by Government will be an
added advantage
Weakness Threats
 Salinity of water, water intensive  Region prone to flooding due to rivers such
industry cannot flourish as Passur

 Shortage of skilled labour  Other natural disasters like cyclone,
 Shortage of Power availability from excessive rainfall
Authority  Competition from major industrial areas like
Dhaka, Chittagong Etc
Figure 46: SWOT Analysis of Mongla region
3.6.7. Relative attractiveness of the sectors based on local site

assessment
This section summarizes the above discussion and attempts to rank the sectors based on the local site
conditions and key environment parameters. These include;
1. Environmental considerations
2. Micro climatic conditions
3. Compatibility for Clustering of Units
4. Surrounding areas
5. Buffer requirements
6. Physical site features
7. Accessibility
8. Security
9. Logistic requirements
10. Transportation issues
11. Functional requirements
12. Space requirements
13. Need for economic zone environment
14. Requirement of skilled labor
15. Social infrastructure
Each sector has been analysed against each of the above parameter and given a high, medium and low
rankings. Rationale for these rankings against each of the above parameters have been explained below:
1. Environmental considerations / regulations
The raking has been done based on the parameters such as water consumption for process, liquid
effluent generation, hazardous waste generation, creation of air pollution is considered. 100% mark is
allocated for the industries where there is no water requirement, liquid effluent generation, hazardous
waste generation and air pollution. Zero% mark is considered for the industries which require higher
water requirement, liquid effluent generation, hazardous waste generation and creation of air
pollution. For example, textile processing, chemical industries, petrochemical industries requires
more water for process, generates more liquid effluent. Chemical industries generate hazardous
waste and cement industries produce air pollution.
2. Micro climatic conditions
Micro climatic conditions are paramount importance for certain specific process which will in turn
will bring down the production cost. 100% marks is allocated for the industries which are suitable /
not affected by the climatic conditions. Zero% mark is considered for the industries for which the
specific climate conditions will favour / reduce the processing cost. For example Cotton yarn cannot
be spun successfully under dry conditions and the humidity of the atmosphere must be considerable;
otherwise the yarn breaks constantly during the process of spinning.
3. Compatibility for Clustering of Units
Industries like RMG, light engineering can be located adjacent to any type of industries since there
will not any major impact in their production due to the presence of polluting industry in the
surrounding area. Food processing and pharmaceutical industries requires clean atmosphere for
their production otherwise the output product may affect in their quality and life. 100% mark is
allocated for the industries like RMG, light engineering since there is no major impact due to
surrounding industries. Zero% mark is considered for the industries for which the output may have
some effect due to presence of polluting industries in the adjacent areas..
4. Surrounding areas
Industries like textile processing, chemical, petrochemical, ship yard industries cannot be located in
mid of existing commercial and residential areas due to it nature, where as industries like RMG, light
engineering can be located anywhere subject to approval of land use. 100% marks is allocated for the
industries which can be located anywhere and Zero% mark is considered for the industries requires
certain specific surrounding area considerations.
5. Buffer requirements
Some of the industries requires (green & physical) buffer surrounding the industry in order to protect
their output product from the outside pollutants and also to reduce the effect of pollution
environment spreading to neighborhood areas as per PCB norms. 100% marks is allocated to the
industries which require higher buffer requirement and Zero% mark is considered for the industries
which require lesser buffer requirement,
6. Physical site features
Certain industries like pharma, petrochemical, cement industries can be located in the area where
there is a presence of water bodies, canal, archeological monuments, etc. Considering this 100%
marks is allocated for the industries which will not have any impact due to the presence of water
bodies, canal, archeological monuments and Zero% mark is considered for the industries which may
have major impact.
7. Accessibility
Industries such as chemical, petrochemicals, cement require Heavy vehicles, hazardous material
carriage vehicles transportation which necessitates the dedicated lane and good accessibility. 100%
marks is allocated for the industries which requires moderate accessibility and Zero % mark is
allocated for the industries which requires dedicated lane and good accessibility.
8. Security
The type of industries considered does not require high security 100% marks is allocated for all
industries.
9. Logistic requirements
All the manufacturing industries requires common warehouse for staking their raw material and
finished goods. Certain industries requires dedicated container yard, rail connectivity, specific
conveyance such as pipe, conveyor, etc to transport their finished product and receive raw materials.
100% marks is allocated for the industries which require no major logistic requirement and zero%
mark is considered for industries which requires specific conveyance.
10. Transportation issues
100% marks is allocated for the industries which generates lesser traffic volume in terms of PCUs and
Zero% marks is considered for the industries which generates more traffic volume
11. Functional requirements

100% marks is allocated for the industries which can be set up which will not be requiring more
functional philosophies such as technology, knowhow, etc and Zero% mark is considered for the
industries which requires specific technology, knowhow, etc.
12. Space requirement
100% marks is allocated for the industries which requires higher space requirement and zero% mark
is considered for industries which require lesser space requirement
13. Need for Economic zone environment
100% marks is allocated for the industries which requires common facilities such as quality control
lab, ware house, research & development centre, training centre, cold storage, etc and zero% mark is
considered for the industries which does not depend on the common facilities.
14. Skilled Labour
Industries such as RMG, light engineering does not require skilled labour where as the chemical and
petrochemical industries require skilled labour. 100% marks is allocated for the industries which
does not depend upon the skilled labour and zero% mark is considered for the industries which
mainly depend upon the skilled labour.
15. Social infrastructure
Industries such as petrochemicals, cement, chemical need to create their own social infrastructure in
the vicinity of the project area where as other industries can depend upon the existing surrounding
social infrastructures. A 100% mark is allocated for the industries which do not require their own
social infrastructure and zero% mark is considered for the industries which require their own social
infrastructure.
The table on the following page summarizes the results and relative preferences of the sectors, based on local
site conditions and infrastructure:
Table 13: Industry evaluation based on compatibility and environmental factors

Envir Total
onme Comp Score
Micro Logisti Need for
ntal atibilit Physic Trans Functi
climati Surrou Buffer c Space Economic Social
Sector / consid y for al site Access Securi portat onal Skilled
c nding require requir requireme zone infrastruc
Parameters eratio Cluste featur ibility ty ion require Labour
conditi areas ments ement nt environme ture Rankin
ns / ring of es issues ments
ons s nt g
regula Units
tions
L=10 L=10 L=0 L=0 L=10 L=10 L=10 L=10 L=10 L=10 L=10 L=0 L=0 L=10 L=10
Relative scale M=.5 M=.5 M=.5 M=.5 M=.5 M=.5 M=.5 M=.5 M=.5 M=.5 M=.5 M=.5 M=.5 M=.5 M=.5
H=0 H=0 H=10 H=10 H=0 H=0 H=0 H=0 H=0 H=0 H=0 H=10 H=10 H=0 H=0
Textiles – Mediu
Low Low High High Low Low Low Low Low Low Low High Low Low 135 I
Apparel / RMG m
Textiles
Mediu
processing – High High Low Low High Low Low High Low High Medium High Medium Low 65 VII
m
yarn, dying
Food Mediu Mediu
Medium High Medium Low Low Low Low Low Medium Medium High Medium Low 115 III
Processing m m
Pharma - bulk
Mediu
drug High High Low Low High High Low Low High High High Low High High 35 VIII
m
substances
Pharma -
formulation,
Mediu Mediu Mediu
mixing, Medium Medium High Low Low Low Medium Medium Medium Medium Medium 85 VI
m m Medium m
compounding,
packaging
Non-metalic
products
Mediu
(primarily High Low Low Low High High Low High High High High Low High High 35 VIII
m
Cement
Industry)
Chemical and Mediu

High Medium Low Low High High Low High High High High Low High High 30 X
Petrochemicals m
Electronics
Mediu
(electronics, IT Low Low High High Low Low Low Low Low High Low High High High 105 IV
m
and hardware)
Machinery
(Light
Engineering -
bicycle and
Mediu Mediu
other Low Low High High Low Low Low Low Low Low High Low Low 130 II
m m
manufacturing
parts for
Textile,FP
industry etc.)
Auto & Auto
Components (
Mediu Mediu
primarily Ship- High Low High Medium Low Low Low Low Medium Medium Medium Medium Low 105 IV
m m
building
Industry
The above analysis had been undertaken to get a direction and sense of which sectors may be preferable to
upcoming Mongla EZ based on region’s prevailing industrial base as well as specific environmental conditions.
The above sections have adopted a top down macro parameters based approach to create a hypothesis.
However, in order to derive more confidence to our analysis, we have, in addition to the above, adopted a
primary bottom-up approach, where in we have validated our findings through actual ground feedback. In
order to do so, we undertook an extensive primary survey exercise, wherein we met around 150 players from
different industry domain and took their inputs to assess –
1. What type of industries may prefer Mongla

2. Why should they prefer Mongla; alternatively, what are the reasons that may deter them to come to
Mongla
3. What is the regional distribution of the players that may prefer Mongla
4. What are the incentives that are demanded by the industry to come to Mongla
5. What can be the probable area sharing between various industries and sub sectors that may use Mongla
SEZ
The section that follows delves into greater detail of our key findings based on primary research.
3.7. Industry Identification- Excerpts from the Survey

As indicated above in order to arrive at the industry land demand for Mongla EZ, a primary bottom-up
approach was adopted. Primary survey was conducted with various industry players in Bangladesh. The survey
sample size was 150 respondents. The sample size was calculated based on a total population size of 43,077
(Industrial units in Bangladesh, SMIE 2012 data) and taking a 95% confidence level and 8% margin of error.
These industries were spread across Bangladesh; region wise and sector wise. The responses were collected
primarily via face to face interactions, sending e-mails, telephonic discussions.
Since the key objective of this study is to establish feasibility of upcoming EZ at Mongla, the survey first
considered only domestic Bangladesh industries to estimate the demand arising for Mongla EZ. The following
graph represents the ownership structure of the participant companies in the survey:
3%
97%
Local companies JV with Forign companies
Figure 47 – Ownership structure of the companies surveyed
Of the 150 participants, 4 companies had JVs with foreign firms, while the remaining were local firms. No
companies outside Bangladesh were surveyed once it was clearly established that the domestic demand itself
exceeded supply at Mongla EZ. The implications of conducting such a country level demand survey is that the
demand estimates are conservative in nature. It would emerge in the subsequent sections that the demand is
much more than supply even under this conservative scenario due to which the need for surveying companies
outside the country was not felt to address the purpose of establishing EZ’s feasibility.
Post this survey, a detailed statistical analysis had been undertaken to assess the objectives mentioned in the
preceding subsection. The following flow charts indicate the approach and methodology adopted:
3.7.1. Survey Sample Overview

Respondents profile:
The participants in the survey belonged to diverse set of industries, as indicated in the figure below. Textiles,
RMG and Leather sector form 39% of the total respondents. The higher number of respondents in Textiles,
RMG and Leather sector are also aligned with the industry breakup in the country with this sector forming
around 43% of the overall number of establishments, as per data from the Survey of Manufacturing Industry
(SMI 2012).
Chemical and
Association/Chamber Petrochemical products Food Processing
1% 5% 10%
Furniture
2%
Textiles, RMG and
Leather Light Engineering
39% 10%
Pharma Multi-Sector
12% 5%
Non-metallic minerals
Shipbuilding 2%
4%
Rubber and Plastics
products Printing and Packing
3% 7%
Figure 48: Sector profile of respondents participating in survey
(Source: PwC survey)
The regional breakup of respondents indicated dominance from Dhaka region, followed by Chittagong,
Khulna and Narayanganj regions. The regional –mix is as indicated in figure below:
4% 3% 1%
6%
Chittagong
Dhaka
Khulna
Narayanganj
86%
Khulna
Figure 49: Region profile of respondents participating in survey

Interest in the proposed site at Mongla
One of the objectives of the survey was to assess the share of the respondents that are interested in Mongla EZ
on an as-is basis (and without any additional incentives).
To this point, 8% of the participants who responded in the affirmative and are the ones who are ready to lease
the land at Mongla on an as – is basis. Such respondents primarily comprised from jute & jute products and
fish processing sectors and one of the principal reasons that may be attributed to this is the existence of
factors of production for these sectors in Khulna (50% of respondents saying yes are in these two sectors).
Further, about 45% of the respondents were ambivalent about Mongla (with “May be” response)
On the other hand, 47% of the respondents indicated their disinterest in Mongla under present conditions. In
other words, respondents belonging to “May be” or “No” category have requested certain incentives for
aligning with Mongla EZ and they might align with Mongla in case their demand are met. Given due
competitiveness of Mongla with regions with Dhaka and Chittagong, this demand is understandable. It may
be noted that BEZA has already started planning and implementing key development works in terms of offsite
infrastructure that would further incentivise tenants to come to Mongla.
Association/Cha Chemical and

mber Petrochemical
1% products
Yes
8% Food 1%
Processing
17%
Textiles, RMG Furniture
and Leather 4%
May be
45% 37%
Light
Engineering
No 8%
47% Shipbuilding Multi-Sector
5% Rubber and Pharma
13% Non-metallic 5%
Plastics Printing and minerals
products Packing 1%
1% 7%
Figure 50: As-Is interest of respondents to invest in Mongla EZ and breakup of the existing sectors of the respondents
answering “Yes” or “maybe”
Further we tried to understand the reasons for respondents for investing in region. We asked respondents to score
the certain probable reasons from scale of 1-10 25. Proximity to Mongla port, low land price compared to regions of
Dhaka and Chittagong, access to raw materials/ local suppliers, availability of semi-skilled labour for labour intensive
industries and proposed connectivity enhancement (Padma river bridge construction, up gradation of Mongla port)
are few reasons that stand out for interests for respondents
25 The most prevalent reason gets higher marks (maximum 10) and vice versa.
16%
14%
13%
% of Total scoring
13%
12%
12%
11%
8%
1%
Reasons for Reasons for Reasons for Reasons for Reasons for Reasons for Reasons for Reasons for Reasons for
interest in site interest in site interest in site interest in site interest in site interest in site interest in site interest in site interest in site
Proximity to - Low Price - Access to - Availability - Access to - Presence of - Proposed - Saturation of - Any other
port for Land raw material / of labor energy backward Connectivity other (rier
local suppliers linkages enhancement industrial connectivity)
base
1 2 3 4 5 6 7 8 9
Figure 51: Reasons that are currently attractive to the industry players
At the same time, it is imperative to also understand, what had been the reasons concerns for Mongla site. The
objective of this question was to understand the infrastructure related interventions that BEZA or the World
Bank may need to undertake for the site to become attractive to majority of the players. Non-availability of gas
and electricity at lower rate, shipping services and lack of backward linkages are few common concerns that
are making the Mongla site relatively under preferred in the present condition in the eyes of majority of the
respondents.
It may however be noted that most of this infrastructure demand pertains to development of basic facilities
like approach road, development of port, development of connecting bridge etc. BEZA with the assistance
from World Bank is already developing the offsite infrastructure including provision for power and water
supply.
100%
17%
80% 15%
% of total scoring
60% 14%
13%
40% 13%
20% 12%
9%
0% 7%
site -Any other (Distance from

site -Non availibility of energy
site -Non availability of labor

Reasons for not interested in
site -Non availibility of sweet



site -Absence of backward
material/local suppliers
site - Non availibility of
site -Delay in proposed

site -Non access to raw
(electricity and gas)
Dhaka/Chittagong)
shipping services
connectivitiy
linkages
water
7 1 5 8 2 6 4 3
Figure 52: Reasons that are leading to lack of interest among industry players

3.7.2. Target Incentives
Further to the analysis undertaken in the section above, we tried to understand the desired incentives (from
the perspective of policy changes) from the respondents who said either “No or May Be” primarily for
investing in region. The objective of this assessment is to provide recommendations for tailored incentives
customized for Mongla EZ. This will facilitate immediate policy push required in order to optimally address
the incentive requirement and maximize industry’s interest in the proposed economic zone.
We asked the respondents about “the incentives that should be given to promote industrial development in
Mongla and Khulna Region”. We captured their incentive requirements under categories of –
 Power (continuous source),

 Fiscal incentives,
 Infrastructure Development,
 Other Incentives
The chart below shows ranking of incentive categories on the basis of response to the survey.
43%
50%
40% 26%
23%
% total Respondents
30%
20%
7%
10%
0%
1 2 3 4
Power Infrastruture Fiscal Incentive Other Incentives
Facility
Ranking
Figure 53 : Ranking of Incentive Categories based on % of total respondents
On analysis of survey results, it has been observed that ‘requirement of power (electricity and gas)’ is the most
important rider to facilitate investment in Mongla EZ. The need of low-cost gas and electricity supply in the
region is evident for growth of industries. Earlier sections highlight the issue of shortage of power and the
need for development of infrastructure, like power plants, in Bangladesh and Mongla region respectively. In
order to develop Bangladesh power sector and encourage establishment of industries, the government has
declared its vision 2021 to provide electricity for all. The gap of demand and supply of power has increased
due to exponential growth in electricity demand by growing number of industries in Bangladesh. To meet this
demand, as per PSMP 2010, the government has identified potential power plant sites based on optimum
power development plan in the country. Further, the industrial policy 2010, announced by the government
provides special incentives to private sector power generation companies (IPP, ISP) according to the private
sector power generation policy of Bangladesh and for using biomass, solar and windmill based power.
Creation of basic infrastructure facilities is absolutely essential for industrial development of any region. As a
result of availability of quality infrastructure, industries get established with less capital investment and can
function without obstacles. Facilities like availability of road-rail connectivity, availability of well-developed
port facilities assist in growth of business and industry. Good road network is vital as it promotes accessibility
of the industrial region. The need for better infrastructure facilities in the Mongla region is well emphasized
in the survey results, with ‘infrastructure facility’ category ranking second and comprising of more than 25 %
of the total respondents.
Under the category of ‘Fiscal Incentives’, a large number of respondents identified various sub-categories such
as Tax Holiday, Provision of concession Loans and low lease rent as critical riders to promote industrial
development in the EZ. In order to achieve targeted investment in the region, it is essential for the
government to provide maximum encouragement to industrial investment in the region by providing such
fiscal incentives.
Similarly, under ‘Other Incentives’, 46% of the respondents highlighted that the economic zone should
develop one stop service solution centers to address multiple services under one roof. Also, the need for focus
on development of social infrastructure like schools, Healthcare centers, and community centers was put
forward.
The chart below shows the category-wise split of responses as given by 150 respondents in the primary survey.
It is seen that some of the sub-categories as highlighted under ‘Infrastructure Facility’, such as better road
connectivity, better developed port facilities etc. have already been addressed by the government of
Bangladesh. The need for better connectivity of Mongla region with the capital city of Dhaka, which is also
financial hub of the country, is crucial for development of industries in Mongla EZ. The Government of
Bangladesh has proposed to construct Padma Bridge at Mawa point to enhance connectivity to Mongla region.
Padma Bride will not only enhance the regional connectivity of Mongla but will also substantially reduce the
distance between Mongla and Dhaka to 170 Km. Thus, addressing to the issue of regional and Dhaka
connectivity.
Fiscal Incentives Power

Any other
4% 4% 3% electriciity
gas
Export Incentives
Provision of concession 26%

48%
Loans
52%
Tax Holiday 63%
Vat and other Tax

Subsidiary
Infrastructure Facility Other Incentive

Accomodation & other facilty
Availability of fresh water for labour class
(free from salinity)
Better communication facilites 5% 3% better developed local
transport facilities
3% 8%
Better connectivity with dhaka 12% 19%
& other regions 12% 0% Developed EZ as one stop
Better developed Port facilities service solution
11%
30% Focus on development of Social
better rail connectivity 15%
Infrastructure (Schools,
Hospitals, Community Service)
better road connectivity 22% Land sale Rights
46%
Improved inland water 14%
connectivity Skilled workforce availabilty
other
Figure 54 : % split of responses for each incentive category
The Padma Bridge is also expected to revive the Mongla port, which is now operating at very low capacity due
to the long travel time required to reach Dhaka and other key locations.
28%
39%
50%
13%
12%
28% 6%
15%
19%
31% 33%
25%
Light Engineering Textile, Leather and RMG Food Processing

Fiscal Incentive Infrastruture Facility Other Incentives Power
Figure 55 : % Split of category for proposed sectors
As per the analysis, proposed sectors of Food Processing, Light Engineering and Textiles & RMG have
emphasized on the need of fiscal incentive (provision of concessional Loans, Tax holidays), continues and
subsidized Gas/ Electricity supply and better infrastructure facilities like road-rail connectivity, improved
inland water connectivity, need for availability of fresh water, developed Port facilities and better
communication facilities etc. are rider for development in the economic zone.
Provision of fiscal incentives like tax holiday for 10 or more years, VAT subsidy and export incentives are
demanded by all the proposed sectors and are hence crucial for attracting industrial development in Mongla
EZ.
Through the above analysis, it can be established that certain policy push are required in order to address the
incentive requirement and maximize investor’s interest in the proposed economic zone.
To summarize, we have highlighted the interventions needed and the current government initiatives to
address the promotion of industrial development.
Power
 In order to make available natural gas as energy source for industrial development, there is a need for
development of gas grid in the Mongla Region. Necessary steps and efforts are needed to ensure the
supply of interrupted power, according to the industrial demand.
 Bangladesh has already taken certain steps to address this issue. As per PSMP 2010, the government
plans to generate 39,000MW electricity by 2030. Also, plans to establish 1320MW Coal based power
plant and first LNG based power plant in Khulna are under progress 26.
 The Industrial Policy 2010, encourages power generation through private investors and use of
unconventional sources of energy.
Infrastructure Facility
 Well connected road and rail network is essential for an all-inclusive development of the Mongla
region. To promote industrialization and to attract investors, the government is now taking efforts to
improve connectivity of Mongla with other regions.
26 Investment Potentials, www. powerdivision.bd

 Proposed projects like Padma Bridge construction, Planned Mongla Airport and Khulna-Mongla
railway line are good initiatives taken by the government of Bangladesh.
 Of all the critical factors for industrialization, water is an essential. Need of availability of fresh water
is crucial for encouragement of industries particularly water intensive industries. It is very important
for the government to further strengthen the water system in the region.
Fiscal Incentives
 In order to achieve targeted investment in the region, it is essential to provide maximum

encouragement to industrial investment in the region. In this regard, the government may take
necessary steps such as provision of concession, subsidies and financial incentives for attracting,
promoting industrial development.
 Financial provisions, Interest free loans, subsidy schemes etc are essential for promotion of industrial
development in the economic zone.
Other Incentives
 Availability of skilled workforce is an important factor in the industrial development of a region.

Promotion of Skill development through establishment of technical and vocational training centers,
Industrial training institutes like SCITI and degree colleges by government is important
 Provision of social infrastructure like hospitals, community centers etc are riders that encourage
industrial development.
3.7.3. Industry identification – From Survey Results

Respondents were asked to rate the potential sectors to be included in Mongla EZ based on the Factors of
Production (and their opinion) in the region on a scale of 1-10 (1 indicates low and 10 indicates high). These
ratings were given for each of the sub-sector within the sectors. In other words, each participant was asked to
assign a probability of likelihood of a particular sector aligning to Mongla EZ on a scale of 1 to 10. Based on
the findings, the derived ranking for the sector was calculated. The derived ranking for the sector is the
maximum for each of the sub-sector ranking given by respondents. For instance, say scoring for Ship Repair
industry, Ship fabrication industry and Ship Equipment Ancillary industry under Shipbuilding Sector is 6, 9, 5
respectively then derived ranking for Shipbuilding sector is 9 (maximum of 6, 9 and 5). In other words, the
derived ranking for the overall sector is the highest probability of occurrence for any of the sub sector under it.
It is imperative to note that majority of the respondents have demanded certain interventions in terms of
physical infrastructure as well as policy based incentives as pre conditions to assign the ranks. The
probabilities calculated in this section should be looked in tandem with the demand for incentives by the
industry.
Finally, in order to shortlist the sectors for Mongla EZ, a sector with probability of occurrence ≥65% has been
considered as a minimum thresh-hold:
Table 14: Heat map on respondents ranking

Respondents (%) Respondents (%) Respondents (%) Weighted average
that ranked < 5 that ranked 5-7 that ranked 8-10 (probability of
occurrence)
Food Processing 7% 23% 70% 81%
Light Engineering 14% 44% 42% 65%
Non-Metallic Minerals
(primarily cement) 19% 23% 58% 71%
Others 0% 100% 0% 55%
Pharma 44% 32% 23% 50%
Ship Building 16% 20% 64% 73%
Textile & RMG 11% 24% 65% 77%
The sectors derived for Mongla EZ based on survey result analysis are as follows:
Food Processing Textile and Leather Light Engineering
Shipbuilding Non-Metallic Minerals

3.8. Final Shortlisting of Industries for Masterplan

This section summarizes all the above discussions to arrive at the final shortlist of the sectors for developing the Master Plan. In doing so, a
comparision of the demand for sectors (drawn from the survey results) and supply parameters in terms of site location, presence of infrastructure
(or lack of it) and inter-compatibility of the sectors has been undertaken. In undertaking such analysis, a significant weightage has been given to
the results of the survey and compatibility of the sector with other sectors. Presence of other enabling parameters (or lack of them w.r.t. the sector
under consideration) pertaining to infrastructure, site location and other site related features have been considered as additional advantage or
disadvantage (to the sector under consideration) while preparing this final shortlist. The following table summarize this analysis:
Table 15 – Summary of the final shortlist of the sectors for the Master plan
Demand Issues (i.e.,

whether there is
Supply Issues (i.e., what the site and its surroundings offers to
interest / demand
investors from different sectors)
from the prospective
unit investors)
Infrastructure Compatibility for
(including social Location and site clustering of units
infrastructure) features  Environment Considerations Accepted /
Sector Response from
 Requirement of water,  Accessibility and Security and regulations Survey27 Rejected
power, effluent treatment  Logistics Requirements  Climatic conditions
 Cumulative demand for
etc.  Transportation issues  Buffer requirement land for a sector
 Social infrastructure and  Soil condition, humidity
 Restrictions due to surrounding  Probability or likelihood of
skilled labor and other climatic
areas an industry coming to
conditions that may impact
 Functional Requirements
a sector Mongla (as per survey
i.e. industries requiring response)
more technological
knowhow, back ward
linkages etc.
 Limited requirement for  Presence of Mongla Port  RMG can be established  High demand expressed
Textiles – water, liquid effluent will facilitate exports as it adjoining other types of from the survey
generation is an export oriented industries and have limited  Cumulative land demand
Apparels / industry pollution or its product is not Accepted
 Relative power for Textile industry as per
RMG, Jute requirement (as compared  Doesn’t need a heavy impacted by pollution from survey (after incorporation
based to other sectors) is low vehicle transportation other industries of probability of
 Dependency on skilled thereby evading the  No specific impact of climatic occurrence) works out to
27 Refer Annexure 9.2 for more details on sub sector specific probabilities of occurrence or likelihood of industries coming to Mongla

whether there is
interest / demand
unit investors)
more technological
knowhow, back ward
linkages etc.
industry labor is limited requirement of dedicated conditions on product of the be around 280 acres
 Does not require associate lane with high lead bearing industry  There is around 80%
social infrastructure roads for transportation  No restrictions expected on probability / likelihood of
creation (housing etc) near  Heavy dependence of industry due to surrounding unit investors from this
the plant imported raw material. At conditions sector choosing Mongla,
 Functional requirement of present, the connectivity of provided the
this sector is limited. Mongla and Khulna via sea incentives/infrastructure
Requirement of more back port and airport is limited. demanded by them are met
ward linkages / However, with o The probability /
infrastructure makes a development of Mongla likelihood for subsectors
sector relatively port and airport at Jessore, including jute and jute
unattractive since Mongla this impediment is based industries and
currently has less industry expected to be removed in RMG industries coming
presence the coming years to Mongla was
 Khulna region already has estimated to be around
presence of Textile, Jute 80% and 60%
and RMG industry respectively
3 3 3 3

whether there is
interest / demand
unit investors)
more technological
knowhow, back ward
linkages etc.
Textile –  Textile processing industry  Micro climatic conditions  It generates high effluent and  Demand for textile
Processing, requires more water and of Mongla are not suitable may not be compatible with industry is high, but
generates higher effluent. for Textile processing other industries probability or likelihood of
yarn, dying Accordingly, this industry industry. For example  Micro climatic conditions textile processing industry
would require higher Cotton yarn cannot be makes this industry in coming to Mongla have
investments in effluent spun successfully under compatible to Mongla been assessed to be less
treatment plants dry conditions and the  Cannot be located in the than 50% (Spinning Mills
 Non backward linkage humidity of the middle of a commercial / 45%, Processing 47%). Rejected
present in Mongla atmosphere must be residential areas due to its
 Limited requirement of considerable, else yarn polluting nature
skill labor breaks during the spinning
process
2 1 1 2
Leather  Limited demand for power,  No site specific constraints  Strong odour and highly  Less than 10% of the
water  Doesn’t requires heavy polluting industry not survey respondent show
 Discharge heavy effluent transportation compatible with food high confidence of leather
and requires suitable processing industry industry coming to Mongla
infrastructure  Cannot be located in the Rejected
 Presence of port and middle of a commercial /
airport has medium level residential areas due to its
impact as the industry may polluting nature
serve export as well as
domestic markets

whether there is
interest / demand
unit investors)
more technological
knowhow, back ward
linkages etc.
2 2 1 1
Food  Medium level demand for  There is a presence of back  Require clean environment  High demand expressed
processing water, power etc. ward linkages as well as and is not compatible with from the survey
 With Food processing presence of existing polluting industries like  Cumulative land demand
being an export oriented industry base in Mongla leather, cement, chemicals, for food processing
industry, presence of region textile processing etc. industry as per survey
Mongla Port and airport  Khulna division has 15%  However, food processing (after incorporation of
will be of high advantage share in overall fish industry has been given probability of occurrence)
 Availability of non-skilled production in Bangladesh preference over cement and works out to be around 113 Accepted
labour in the region  Within Khulna division, other industries as demand for acres
supports the sustainability Bagerhat district this industry (as per survey)  More than 80% likelihood
of this industry in Mongla dominates fish and shrimp was higher than other of this industry coming to
production with share of industries Mongla EZ
26% and 39% respectively
2 3 1 3
Light  Limited requirement for  No adverse impact on  Compatible with other  High demand expressed
Engineering water, liquid effluent micro climatic conditions industries. Limited impact on from the survey
generation of site on the industry its product due to pollution /  Cumulative land demand
Accepted
 Presence of port and  Doesn’t requires heavy hazardous discharge by other for food processing
airport will be of high industries industry as per survey

whether there is
interest / demand
unit investors)
more technological
knowhow, back ward
linkages etc.
advantage to the industry transportation  No restrictions expected on (after incorporation of
to enable exports from the industry due to surrounding probability of occurrence)
EZ conditions works out to be around 113
acres
 More than 80% likelihood
of this industry coming to
Mongla EZ
2 2 3 3
Non Metallic  Cement industry needs to  Cement carriage via road  Highly polluting industry and  Total cumulative land
Minerals create its own social requires heavy vehicle non-compatible with food demand for cement
infrastructure (in terms of transportation. The processing industry that has industry as per survey was
(cement townships for employees of approach road at Mongla is higher demand for land and only 18 acres
industry) the plant). The space not designed to carry heavy higher likelihood of coming to  The aggregate land
limitation at Mongla will axle load for a sustained Mongla demand for cement
limit such infrastructure period of time  The discharge of cement industry when compared to Rejected
 Mongla port may open factories generally consist of the food processing
avenues for exporting Particulate matter, Sulphur industry (113 acres) was
cement to nearby countries dioxide and Nitrogen oxides very less
from Mongla EZ producing continuous visible  Since cement and food
clouds which ultimately settle processing industry are not
on the surroundings as a result compatible, preference to
the whole ecosystem around food processing industry

whether there is
interest / demand
unit investors)
more technological
knowhow, back ward
linkages etc.
the cement factory is subjected (owing to higher interest
to extraordinary stress and shown in the sector by the
abuse. The problem of prospective unit investors
environment with its impact is in the survey) has been
not only on the employees given
working in the plant but also
the community in the
neighborhood of 5-10 km
radius.
2 2 1 1 Rejected
Shipbuilding  Presence of Mongla port  The site doesn’t offer large  Space requirement for ship  Only 10 acres of aggregate
may benefit ship repair area to establish ship building industry and its land demand had been
industry building industry cluster ancillary industries in huge. established from survey
 Lack of established back  Without establishing as a The land demand (as well as results, which was very
ward linkages at Mongla to cluster, economies of scale land area of Mongla EZ) small to establish a Rejected
sustain ship building (on which shipbuilding assessed from the survey for shipbuilding cluster
industry industry thrives) would not this industry did not
be possible established a case for inclusion
of this industry along with
other industries at Mongla EZ

whether there is
interest / demand
unit investors)
more technological
knowhow, back ward
linkages etc.
2 2 1 1
As discussed above, while Textile (RMG, Jute), Light Engineering and Food Processing have been shortlisted; industries including shipbuilding
and cement have not been shortlisted.
3.8.1. Arriving at land area demand at Mongla EZ

As discussed above, most of the respondent had demanded certain incentives or infrastructure development
at Mongla for them to align with the Mongla EZ. Accordingly, respondents were asked to choose a sector to
invest considering all the incentives are provided to industries and bottlenecks as highlighted by them are
addressed. Under this condition, 102 respondents out of 150 reverted in affirmative along with the
area that they would like to lease in Mongla economic zone. The cumulative area for such tenants
worked out to be 806 acres.
However, in order to estimate the land demand for Mongla, probability of each of these players aligning with
Mongla was multiplied with these projections to arrive at the land area allocation of respective potential
sectors in Mongla EZ. Finally, the area of the shortlisted sectors (as per the above analysis undertaken in
section 3.8) has been arrived. The result of this analysis is provided in the table below:
Sectors Total Area as per Area after incorporating the Area for final shortlisted
respondents (Acre) probability of the players sectors
coming to Mongla (Acre)
Food Processing 141 113 113
Others 60 33 -
Pharma 107 53 -
Shipbuilding 10 7 -
Textile 367 280 280
Light 96 63 96
Engineering
Non-metallic 26 18 -
minerals
(cement)
Grand Total 806 568 489
Thus, it may be noted that the demand for land at Mongla EZ is expected to be more than the supply of 205
acres28. The following graph shows the breakup of the land area proposed for Mongla EZ:
Light
Engineerin Food
g Processing
10% 31%
Textile
59%
Figure 56: Land allocation for potential industries for Mongla EZ
28 Please refer Annexure 9.4 for other methodologies adopted to validate the land demand.
3.9. Land area uptake for Mongla EZ

3.9.1. Land uptake projections for Mongla – Base Case
The earlier sections established that the inherent demand for developed land in Mongla is higher than the
supply provided the incentives demanded by prospective unit investors both in terms of infrastructure as well
as policy are met. The land uptake projections will accordingly be dependent on the development of the
support infrastructure and approval of the fiscal and other incentives by BEZA and Govt. of Bangladesh.
In addition to developing supporting offsite infrastructure at Mongla Economic Zone (EZ), BEZA’s Governing
Board has already approved an incentive package for EZs under its regulation. Accordingly, while developing
the base case for land uptake demand, as a first step, an assessment of the incentives and support
infrastructure demanded (as per the survey of prospective unit investors) and incentive supplied has been
undertaken to assess the likelihood of land uptake at Mongla. This comparision is summarized in the
following table:
3.9.1.1. Fiscal/Non Fiscal incentives – Demand vs

Supply
Sl. Incentives demanded No. of Details of Incentive package Availability
No. by the interviewees interviewees as approved in the Governing of
Board’s meeting Incentives
(Yes/ No)
1. Tax Benefits/ Tax 51 For Developers: Income tax Yes

Holiday exemption on income derived
from the business development of
EZ in a block of 10 years in 15
years
For Unit Investors: For Dhaka &
Chittagong Division:
Income Tax Holiday (ITH)-
First 2 years 100%
3rd& 4th year 50%
5th year 25%
For other areas:
Income Tax Holiday (ITH)-
First 3 years 100%, 4th, 5th& 6th
year 50% and 7th year 25%
2. Waiver in cost of 14 For Developers: Exemption of Yes
electricity/ energy VAT on electricity or taxes on
sale, of self generated or
purchased electric power for use
of processing area of EZ (for 10
years)
3. Assistance In availing 16 No such incentive was part of No
cheaper sources of the package
finance
4. Waiver on Tax and VAT 5 For Developers: All purchase Yes

for raw materials excluding petroleum product
Sl. Incentives demanded No. of Details of Incentive package Availability

No. by the interviewees interviewees as approved in the Governing of
Board’s meeting Incentives
(Yes/ No)
from DTA shall be exempted from

VAT, sales tax etc.
For Unit Investors: Exemption of
VAT on all utility services
consumed inside the zone
5. Reduced 2 For Unit Investors: Exemption of Yes

transportation Cost CD for import of vehicles
6. Low lease rent 6 No incentive is present, but the Yes

lease rent itself is expected to be
very cheap in Mongla
7. Waiver from various 1 Several incentives have been Yes

different govt. charges included in the incentive package
such as custom duty; stamp duty;
relaxation on income tax;
repatriation; relaxation on capital
transfer, work permits, re-
investment, royalties etc.
8. Policy push- additional 1 A completely new package has Yes

policy incentives apart been approved by the Governing
from existing EPZ Board- this is totally separate
policy from the EPZ policy
9. One-Stop-Service/ Ease 15 One-stop-service package has Yes

of approval process been approved by the Governing
Board
10. Land Selling Rights 3 Land can only be leased to the No

unit investors. Selling rights won’t
be applicable for the developers
11. Support to grow 1 For Unit Investors: 100% Yes

backward linkage backward linkage raw-materials
industry and accessories to sell for EOI in
DTA (To reduce imports)
12. Extension in tenure of 2 Already land lease tenure has Yes

leasing of land been extended from 30 years to
50 years- it was approved in the
Governing Board’s meeting
It may be noted from the above table that more than 80% of the incentives demanded by the prospective unit
investors have already been met by BEZA’s Governing Board in its meeting held on 18 February 2015.
3.9.1.2. Provision of support Infrastructure –

Demand vs Supply
In addition to the fiscal incentives, the prospective unit investors has also demanded provision of certain
support infrastructure. BEZA is already working on providing certain offsite infrastructure and the following
table compares the infrastructure demanded and supplied by BEZA –
Sl. Infrastructure No. of Details of infrastructure Availability of

No. required by the interviewees facility that will be Infrastructure(Yes/
interviewees developed for Mongla EZ No)
1 Connectivity 38 The proposed EZ site is well Yes

(Road/ Rail/ Air/ connected. It is located 50
Water etc. and meters from the Jessore –
transportation Khulna – Mongla Road.
system) Mongla port is jus 3km from
the proposed site, Dhaka city
379 km an unfinished Rampal
airport 22 km and Jessore
airport 105 km.
2 Full operational 19 The development work Yes

functionality of Mongla port is expected to
Mongla Port; access commence shortly and the it
to Mongla Port and is expected that the port
special priority in would be fully developed and
using the port operational in 5-6 years time
thereby giving the tenants a
huge advantage with the port
in close proximity to the site
3 Availability of 69 BEZA is in the process for Yes

electricity/ power/ selection of an EPC contractor
energy for development of a 33 KV
substation at the site.
4 Availability of gas 63 Gas is a concern and would No

not be available immediately.
5 Social 10 As per our proposed Yes

Infrastructure masterplan for Mongla EZ,
(Township with the non-processing area
proper amenities, includes residential facilities,
educational and rain water harvesting system,
healthcare healthcare facilities and other
facilities) pertinent social infrastructure
to be developed.
6 Availability of 9 BEZA is the process for Yes

sweet water for selection of an EPC contractor
drinking and for development of External
commercial water supply system from
purposes Foyla to the proposed site.
Provisions for summer

storage tank, water supply &

treatment and WTP/ CETP
have already been
incorporated in the financial
model.
7 Facility of WTP and 4 As per our proposed Yes

CETP inside the EZ masterplan for Mongla EZ,
facility for WTP and CETP has
been considered. All these
components are proposed to
be developed in the EZ.
8 Facility of customs 3 N/A No

house
9 Improvement in 4 The Government is putting in Yes

overall al efforts to improve
infrastructure infrastructure in Mongla with
respect to development of
Mongla Port, Construction of
Padma bridge and providing
all necessary off-site
infrastructure to the proposed
Mongla EZ.
10 Dredging of 2 Dredging of Passur river and Yes

adjacent Mongla Mongla-Ghasiakhali canal
River have been proposed
11 Storage/ 2 As per our proposed Yes

Warehouse facility masterplan & our financial
model for Mongla EZ, Central
warehouse/ storage facility
would be developed in the EZ
12 Telecommunication 2 Telecommunication facility Yes

facility would be available in the EZ
and provision for the same
has been considered in the
financial model.
13 Other 2 The construction of Padma Yes

infrastructure bridge is expected to be
(development of complete in 2017/18. Once
Padma Bridge) operational, it would boost
the infrastructure linkage to

the proposed site.
14 Availability of 1 A bridge is being proposed on Yes

skilled labour the other side of the Mongla
river which houses numerous
labour (skilled & unskilled)
Based on the above table, most of the demands pertaining to provision of support infrastructure have already
been met by BEZA or Govt. of Bangladesh.
It therefore appears that most of the investors demands’ have already been accepted and are in the process of
implementation. This increases the likelihood of unit investors to come to Mongla. However, before assessing
the land uptake projections for the base case in Mongla, a process maping for all the activities undertaken by
the Developer post award of contract till commencement of operations is done:
Base Case - Activity mapping and land Supply Scenario

100% land offtake (12 months)
80% land offtake (12

months)
LoA Construction by Developer 50% land offtake (12 months)

( from Jan 2017 to Dec
2019 i.e. 36 months)
Pre qualification license to final license Marketing & promotional activities

(18 months i.e. May 2015 to Dec 2017)
2015 2016 2017 2018 2019 2020 2021 2022 2023
 Developer is expected to get LoA in May 2015
 From LoA to final license, we expect 18 months of time period i.e till Dec 2016
 The Developer will start marketing activities the moment it gets preliminary license i.e. mid of 2015
 The construction is expected to start from 18 months after the LoA i.e. January 2017
 The construction by Developer is expected to continue from the 18th month post LoA to 54th Month
post LoA (total 36 months) i.e. till Dec 2019
 Since marketing of the site by Developer is expected to start by middle of 2015, unit investors are
expected to come on board by 2018
 By middle of 2018, unit investors are also expected to start construction of their factories at EZ
 COD is expected to be start of 2020 i.e. 54 months after LoA
The above discussions may be summarized to assess the Base Case land uptake projections:
 Most of the incentives and support infrasturcuture development demanded by prospective unit
investors have already been accepted and are in the process of implementation
 Govt. of Bangladesh is proactively promoting the industrial development in the nation. The GDP of
the country has grown by 6.1% in fiscal year 2014 (vis-à-vis projections of 5.6% 29). Economic outlook
also appears to be positive with growth in GDP expected to be around 6.5% in 2015 (vis-à-vis earlier
projection of 6.2%). Going forward, Bangladesh is expected to register 7.5%-8% growth rate in the
next five years30.
 Bangladesh is showing continuous improvement in Ease of Doing Business rankings of the World
Bank
 The unit investor will be on board in 2018 and will have 12-18 months to construct the factories in the
EZ
Taking all of the above into consideration, the base case conservatively assumes that at least 50% of the land
at Mongla would be leased out and factories operational in the first year of operations (i.e. year 2020). In the
second year, it has been assumed that 80% of the site will be leased out, while from the third year of
operation, the EZ is expected to operate at its full capacity. The following table summarizes the land uptake
projections in the Base Case:
Table 16: Land Supply Scenarios

Land Supply Scenario Year 202031 2021 2022 2023
Base (%) 50% 80% 100% 100%
Table 17: Land uptake projections (in hectares) for Mongla EZ: Base Case Scenario
Total Land area (hectares) 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Total 24 39 4832 48 48 48 48 48
- Land (Apparel/RMG) 14 22 28 28 28 28 28 28
Construction Period
- Land (Food Processing) 7 11 14 14 14 14 14 14
- Land (Light Engineering) 3 5 6 6 6 6 6 6
3.9.2. Land uptake projections for Mongla – Optimistic

Case
This scenario consider the following positive possibilities in addition to the realistic assumptions of the base
case that may happen to Mongla EZ, thereby further improving the viability of the site:
 In addition to the approved incentives, other incentives or support infrastructure (as demanded by
prospective unit investors) may also be provided by the Govt. of Bangladesh. This may include
29
Source: http://www.adb.org/countries/bangladesh/economy
30
Source: http://www.worldbank.org/en/country/bangladesh/overview
31 The infrastructure development period by developer is of three years from 2017-2019.
32 58.34% of total 203 acres of land allocated for Industrial Use as per the Master Plan
uninterrupted supply of gas, provision of supply of affordable low cost housing for labourers at
Mongla, provision for custom clearance facilities at Mongla EZ to name a few
 Government of Bangladesh may announce further incentives including provision of subsidized
finance for the development of Economic Zones in the country
 The overall economic scenario of Bangladesh may improve and the country achieve double digit
economic growth
Realisation of the above assumptions, would further provide impetus to the growth of industrial activity in the
nation as well as in Mongla. Accordingly, the land uptake projections for the optimistic scenario has been
provided in the table below:

Optimistic (%) 70% 100% 100% 100%
Table 19: Land uptake projections (in hectares) for Mongla EZ: Optimistic Case Scenario
Total 34 48 48 48 48 48 48 48
- Land (Apparel/RMG) 20 29 29 29 29 29 29 29
Construction Period
3.9.3. Land uptake projections for Mongla –

Pessimistic Case
Lastly, it is imperative to understand the conditions that may not be favourable to industrial development at
Mongla. Some of these may include:
 The political uncertainity in the nation be prolonged, which in turn would have an adverse effect on
the overall macro economic conditions of Bangladesh
 Construction and development of Mongla port on PPP basis may get delayed, which in turn may have
ripple effect on the attractiveness of Mongla EZ
 Delay in construction of Padma bridge – A key link for continuous road connectivity between Dhaka
and Mongla
 Dissatisfaction among the PAPs on the rehabilitation assistance may result in delays, which in turn
may result in low land uptake at Mongla EZ
 Failure to deliver a world class investment environment as against the promised infrastructures
facilities (electricity, water supply and transportation) and services may lead to the sub optimal
performance of the EZ
Taking the above into cognizance, a pessimistic scenario for land uptake projections have been assessed and
presented in the tables below:

Pessimistic (%) 30% 60% 80% 100%
34The infrastructure development period by developer is of three years from 2017-2019. The project timelines have been
discussed in detailed in Financial analysis section
Table 21: Land uptake projections (in hectares) for Mongla EZ: Pessimistic Case Scenario
Total 15 29 39 48 48 48 48 48
- Land (Apparel/RMG) 9 17 23 29 29 29 29 29
Construction Period
4. Proposed Master Plan and

offsite infrastructure
4.1. Site Assessment
4.1.1.Introduction
A detailed insight into the site and its analysis is absolutely necessary in order to suggest planning and
developmental framework for the proposed Economic Zone at Mongla, Bagerhat district, Khulna division,
Bangladesh. The site has to be analysed with respect to location parameters, physical parameters and the
existing constraints have to be respected while planning the developmental activities and wherever possible
the constraints have to be converted into opportunities.
With the above objectives a team from Mahindra Consulting Engineers Limited, Chennai, India visited the
site and collected various information and data regarding the physical and location details.
4.2. Bagerhat district – A profile

Bagerhat, the sanctuary of Hazrat Khan Jahan Ali, was formerly a part of Khilafatabad Pargana. It is situated
at the fringe of the Bay of Bengal with the plentiful boundaries of Sundarban. It became a Police Station under
Khulna sub-division of Jessore Zila in 1842. Bagerhat was raised into a sub-division under the same Zila in
1863 with the recommendation of the then Deputy Magistrate poet Bankim Chandra Chattapadhya. Bagerhat
sub-division was transferred to Khulna Zila in 1882 and was upgraded to a separate district in February 23,
1984.
Geographic area and location
Bagerhat is surrounded on the north by the Gopalganj district

and Narail district, on the east by the Pirojpur and Barguna
districts, on the south by the Bay of Bengal and on the west by
Khulna district. It lies between 21º49' and 22º59' north
latitudes and between 89º32' and 89º98' east longitudes. The
total area of the district is 3959.06 sq. km. of which 600.04 sq.
km. is under reserve forest.
Temperature and rainfall
Annual average temperature varies from maximum 24.2°C to

minimum 12.0°C. The annual rainfall is 1947 mm.
Figure 57 - Bagerhat district map
Main rivers
Panguchi, Daratana, Madhumati, Passur, Haringhata, Mongla, Baleswar, Bangra and Goshairkhali are notable
rivers of Bagerhat district.
Administration
Bagerhat sub-division was turned into a district in 1984. The district consists of 9 upazilas, 75 unions, 723
mauzas, 1031 villages, 3 paurashavas, 27 wards and 56 mahallas. The upazilas are Bagerhat Sadar, Chitalmari,
Fakirhat, Kachua, Mollahat, Mongla, Morrelganj, Rampal and Sarankhola.Bagerhat municipality was
established in 1958. It has an area of 7.50 sq. km.
Archaeological heritage and relics
Among the archaeological heritage and relics, Shatgumbad Mosque, Nine-dome Mosque, Sona Mosque, Khan
Jahan's tomb Complex, Seven-domed Mosque, Ten-domed Mosque, One-domed Mosque, Pacha Dighee,
Ghora Dighee, Kodla Math or Ayudha Math, Kuthibari, Durgapur Shiva Math, Shiva Temple are notable.
There are 2775 numbers of Mosque, 375 Eid Gah, 711 Temples and 23 Church in this district.
Educational institutions
The total numbers of educational institutions are Government College 2, Non-government College 38,
Government high school 5, Non-government high school 287, junior school 33, mentally retarded school 1,
Government primary school 603, registered primary school 511, Madrasa 352, Satellite school 14 and
Community school 9.
4.2.1. Agriculture and horticulture

Main crops
Paddy, wheat, jute, sugar cane, potato, banana, onion, garlic etc. are main crops of this district.
Main fruits
Sabeda, mango, jackfruit, banana, papaya etc. are main fruits of this district.
Main export items
Fish (Shrimp), paddy, coconut, betel nut, betel leaf, honey are main export items in this district.
4.2.2. Flora and fauna35

Bagerhat district lies on the south western part of the country and falls under the Gangetic plain with fertile
land is very rich in respect of flora and fauna. More than one third of the district southern part is covered by
thick forest of mangroves, canes creepers and other trees thriving on muddy saline trees which is the most
valuable and beautiful of all the trees in the forest. The district faces flood during the monsoon almost
regularly. Its impact is however very much felt in the flora and fauna of the district.
The eastern boundary of the forest in the district extends upto the boundary line of Bagerhat district while the
western one extends beyond the western boundary line of the district. The southern boundary of the forest is
the Bay of Bengal and the northern boundary is the Sundarban.
35
Source: Some of the content have been verbatim adapted from
www.bbs.gov.bd/webtestapplication/userfiles/Image/.../Satkhira.pdf
The most important of the forest trees is the sundari (Heritiera minor). The colour of this wood is reddish
which is very soothing to the eye. Because of its durability it has a great demand. It can tolerate saline water
but attains full height on the bank of sweet water rivers like ‘Sela’ and ‘Passur (Xylocarpus malucensis)’ and
are available in large quantity. Its timber is very durable and has great demand for posts and planks. The
amur (Amoor cucullata) and dhundhul (Xytocarpus granatum) have a similarity with “pasur” but they are of
inferior quality and as used sometimes for making house posts. small amoor trees are used for making
“hookka” (Local smoking pipes) stems .One of the largest of the sundarban trees is “ bain( Avicennia
officinalis) tree. Generally it attains 60 feet in height with large girth. The wood used for planking and as fuel.
The flowers of the tree are small yellow and sweet smelling and afford a distinctive quality of honey. Other
important trees are garjan (Dipterocarpus turbinatus), goran (Ceriops roxburghiana) and kankra (Brogucra
gyomosniza). There is a great possibility of utilizing them for tanning purposes. Of them only kankara attains
sufficient size and has some value as timber. The gewa (Excecaria agallocha) tree thrives in the most saline
areas near the sea. Its wood is white hard and produces good timber. It is very much suitable for making
match sticks and boxes and paper pulp. The most striking tree is keora (Sonneratia apetala). Deer are
especially fond of its leaves and fruits. They flock under its branches to eat its fruits and browse its leaves off
as high as they can reach producing a uniform adrupt line along the grove where the foliage has been bitten
off. The Singra tree supplies best fire wood. The karanj (Pongamia glabra) tree is large in size grows on high
river banks.
The hental (Rhoenix paludosa) and the golpatta (Nipa fruticans) are found in muddy areas everywhere. The
hental (Rhoenix paludosa) resembles a dwarf date-palm (Phoenix sylvestris) and rafters are made from it. The
golpatta is regarded as one of the most important products and its leaves are used for thatching houses.
Except for the sundarbans the flora of the district is similar to those in the adjoining districts. Innumerable
indigenous weeds grow in the beel area. Several types of palms and bamboo clumps grow almost all the
villages. Mango and Jack fruits supply the commonest timber and are used for making doors, windows, boxes,
etc.
Mammals
Bagerhat district has a rich diversity of land invertebrate mamals, amphibians, birds, reptiles and fresh water
animals, spider, multipedes and innumerable insects. Leeches, earth worm slugs, snails, silk moths and silk
worm are commonly found in the district.
The Sundarban is rich in wild animals. The Royal Bengal Tiger (Panthera Tigris) is famous for its large size,
strength and colourful stripped body is the lord of the Sundarban. The most important of other fauna of the
forest is spotted or chitra deer. Flocks of deer are found in moonlit night grazing eating keora fruit dropped by
monkeys. Monkeys literally rule over the trees. Several kinds of serpents including poisonous cobra, karait,
rajshap and non-poisonous python, dhora, grass snake are seen everywhere creeping in the grass and from
tree to tree and place to place. It is said that there were plenty of rhinoceros in the Sundarban but now they
are hardly seen. Animals which are common all over the district are jackal, wild hog, porcupine civet cat, wild
cat, tree cat, etc.
Carnivorous animals include fox (Vulpes bengalensis), dog, boar (Sus scrofa), pig, etc. domestic cow (Bos
pourus), goat (Catra lircus), sheep, buffalo (Bubalus bubalis) and horses are quite common in the district. Bats
(Rousettus leschenaulti), shrews, squirrels, rats (Bandicota bengalensis), mice, cats and wild cats (Felis chaus)
are also found in the district.
Birds
The district affords a very lucrative place to game birds hunters. At the advent of winter season snipes, ducks,
and geese begin to flock on beel and char areas. Other common birds are crow (Corvus splendens), vulture
(Gyps bengalensis), sparrow (Passer domesticus), cuckoo (Cuclus microplerus), king fisher (Alcedo atthis),
bulbuli (Picnonontus cafer), parrot (Psillacula krameri), tailorbird and lark.
Many kinds of colourful and singing birds are seen in the district. These include the national bird robin
magpie (Copsychus saularis), kokil of cuckoo (Cuculus microplerus) halde pakhi (Oriolus xanthornus),
kingcrow (Alcedo atthis), mayna (Sturnus malabarica) , shalik (Acridotheeres trisis), shama (Copsychus
malabaricus), sparrow (Passer domesticus), several species of pheasants, quails, pigeons (Columba livia) and
doves (Streptohelia suratennis), duck, geese, balihash (Anas crecca), cocks and hens, kingfisher (Alcedob
atthis), lark, swallow, crow (Corvus splendens), crane, pelicans, woodpecker (Picus myrmecophoneus) and
many other varieties of small birds. Raptoral birds including king vulture (Trogos calvus), lanner falcon or baj
(Falco biarmicous), gochila (Circus aeruginosus), Cheel (Milvus migrants), several species of stork. Some
migratory birds like greenleg ghoose (Anser anser), rajhans (Anser iIndicus), pitail (Anas acuta), etc. are also
seen during winter season.
Fish
With large water area the district is well stocked with fish. Some of the commonly available fishes are ruhi or
salmon (Labeo rohita), mrigel (Cirrhinus mrigala), kala boush (Labeo calbasu), katla or carp (Catla catla), etc.
shing (Heteropneustes fossilis) and magur or cat fish (Clarias batrachus) are also found in large quantity in
beels and khals. Many other species of river and fresh water fishes are also found in the district. Of these the
principal varieties are koral/vetki or sea bass (Lates calcarifer), tapashi (Polynemus paradiseus), drain, chital
(Homopterous chital), Ghana, air (Mists air), beggar (Beggaries beggaries), pangs (Pegasus phantasies), boil
or sheet fish (Wall ago Attu), Rita (Mists air), bain or eel (Mastacembelus armas) chapila (Gudusia chapra),
bhagna (Labeo boga), nandail (Labeo nandina) bacha (Eutropichtys vacha), poa (Pama pama), golsa (Mystus
bleekeri), tengra (Mystus vittatus), chanda (Mene muculata), rupchanda (Pompas chinensis), kachki, bele
(Glossgobius giuris), bheda, batashai, ghausa, kakila, foli (Notopterus notoppterus), tatkeni (Crosscheilus
latius), pabda or butter fish (Ompok pabda), chela (Chela Cachius), gangchela, gazar fish (Channa marulius),
koi (Anabus testudineus), kholisha (Calisa fasciata), puti (Barbus punti), malandi, banshpata (Danio devario),
tengra (Mystus vittatus), kakra (Scylla serrata), shrimps and prawn are found in the district. However, some
of these varieties, especially those which inhabit in marshes and tank, are dwindling due to over catching and
other reasons such as use of insecticides and pesticides for crop production, etc.
Exotic fishes like grass carp (Cteopharyngodon idella), silver carp (Hypophthalmicthys molitrix), tilapia
(Oreochromis mossambicus), nilotica (Oreochromis niloticus), etc. have been introduced for commercial
pisciculture in ponds and tanks. Bagerhat district is renowned for its shrimp culture in gher.
Reptiles and amphibians
Crocodiles and sharks swarm in the river beds, butterflies, moth, bees and wasps fly from flowers to flowers
especially in the spring together honey. The reptiles include different species of snakes, lizard (Hemidactylus
prooki) and tortoise (Kachuga tecta). Guinshap (Varanus salvator), python (Python molurus), cobra (Naja
naja) and other varieties of poisonous snakes are found almost all over the district. There are also amphibians
like toad, frogs and tree frogs.
4.2.3. Economic situation

The economy of Bagerhat is predominantly agricultural. Its economy is also dependent on the Sundarban and
Mongla port. According to the Agriculture Census 2008, the total holdings of the district are 339 thousand of
which 68.57% of holdings are farms that produce varieties of crops, namely local and HYV paddy, wheat, jute,
vegetables, spices, pulses, oilseeds, sugarcane and others. Various fruits like mango, banana, Jackfruit guava,
coconut and betel nut etc. are grown. Fish of different varieties abound in the district. Varieties of fishes
caught from rivers, tributary, channels and creeks and even from paddy field during rainy seasons. Besides
crops, livestock and fishery are main source of household income.
4.2.4. Location of the project

The proposed “Mongla Economic Zone” will be on 205 acre (83
hectare) of land. It is located near Mongla EPZ, under Bagerhat
district. Its geographical coordinates are 22° 28' 0" north and
89° 37' 0" east. It is 105 kms from Jessore airport, 397 kms from
Dhaka city and 664 kms from Chittagong port.
It is bounded by Upazila Rampaul in the north, Mongla EPZ on

the south, the Mongla River in the east and the Pashur & Gona
river/Mongla Port Authority on the west.
Mongla EZ stands on the river Mongla. Mongla port is the

second biggest seaport of the country. Mongla municipality was
established in 1991. The area of the town is 17.79 km². Mongla
Thana was established in 1976 and was turned into an Upazila in
1983. It consists of 1 municipality 7 union parishads, 37 mauzas
and 77 villages. There are 11 unions in Mongla Upazila. The
proposed EZ is under Burir Danga union. Figure 58 -Mongla Upazila map
Mongla Upazila – a profile
Demography
The present population of Mongla Port Paurasava is around 60,560 of which 57% is male. Religious affiliation
is Muslim 71%, Hindu 25% and the balance is made up of other religions.
Health and education facilities
There is only one health complex, one hospital (Mongla Port hospital), six family planning centers and three
private hospitals within the Upazila. There are o3 primary schools, 07 secondary schools, 05 colleges and 09
madrasas.
History, culture and tourism
Archaeological heritage and relics are generally of local interest only. None of these will be adversely affected
by the proposed Economic Zone.
Ecological resources
The area immediately around Mongla port is a mix of flooded low lands and cultivated fields used primarily
for the cultivation of paddy. Further south from the proposed Economic Zone, some 10 km begins the
Sundarban, a maze of meandering streams interspersed with mangrove forest. The Sundarban is a vast
ecological resources stretching from the Meghna River west to the Hoogly in India and beyond. Significant
amount of biodiversity can be found in the Sundarban. The immediate project area is a barren land filled with
dredged sand.
Land use
The total cultivable land in Mongla Upazila is 12,566 hectares, nearly all of which is under single cropping
pattern. Total land of this Upazila is 1,461 sq km, of which cultivable land represents only a fraction (11.00 %);
most of the land is found to the south in the flooded forests of the Sundarban.
Industry and agriculture
There is an Export Processing Zone in Mongla that is home to Pace Tobacco industries and recently planned
joint venture plant with ownership by Bangladesh, China and Pakistan to set up a tooth brush and ball pen
industry. In addition there are numerous cottage industries viz ice factory, rice mills, blacksmiths and wood-
working shops. The main agricultural product of this area is paddy.
Infrastructure, transport and communications
Mongla is connected to Khulna, the divisional town and the district headquarters Bagerhat via a two lane
roadway. Mongla is the second largest port in Bangladesh, accepting ships up to 255 m in length. The port’s
main exports include jute, lather, tobacco, frozen fish and shrimp. The major imports include grain, cement
clinker, fertilizer, coal and pulp. The port is connected to Khulna via a rail link and thence to no other parts of
Bangladesh. Wide road is available around 300.00 m from the proposed EZ site.
Climate
It has a tropical climate. The average annual temperature is 26.1º C. The average annual rainfall is 1910 mm.
The warmest month of the year is May with an average temperature of 29.90 º C. The lowest average
temperature of the whole year is in January and it is 19.2 º C. The humidity is 31% and the normal wind speed
varies from 3.70 km/h to 5.00 km/h.
Air quality
The economic zone area at present does not present any concentration of pollutants in the air beyond the
permissible levels.
Surface water
Mongla is located at the confluence of the Mongla River with the Pashur River, which flows south from
Khulna passed Mongla for an additional 70 km before reaching Bay of Bengal. In wet season the amount of
Chloride in the river water is 101 mg/L, whereas the allowable limit (Bangladesh standard) is 150-600 mg/L.
Ground water
Ground water in Mongla is saline. NGOs active in this area report that following the cyclone “AILA” in 2009
as much as 99% of shallow wells in some areas became saline and few fresh water ponds remaining after a
year were typically out-stripped by demand. Now the Chloride level in impounding reservoir has noted as 727
mg/L, where the acceptable limit is 1000 mg/L, in the coastal belt. The Chloride level in the adjacent river
water was noted as 101 mg/L.
For drinking, water is supplied from “Foliar Hat” under Rampal Upazila, about 20 Km from the proposed
Mongla EZ. This water is extracted from a depth of 274.39 m from GL. A twin PVC transmission line of 200
mm carries the water.
Mongla EZ - Location
The proposed “Economic Zone” in Mongla will be developed on 205 acres (83 hectare) of land. It is under
Kamardanga Mouza (JL # 20) in Mongla Upazila, Bagerhat district. The total area is now a barren land. There
is no vegetation, no plantation and no flora/fauna in this area. Through dredging from the adjacent Pashur
River, the site has been raised by almost 1.50 to 2.0 meter. The GL (ground level) is now around 1.50 to 2.0 m
above the highest flood level (HFL). The river Mongla is flowing by the side of the proposed EZ. Another river
Ghona also flows on the other side of the EZ, which has narrowed down to a canal now. The width of this river
is around 10. m. There is almost no current in Ghona River. Wide road is available around 300.00 m from the
site.
There are no environmental issues about the site. The site is devoid of mangroves and corals. The northeast
boundary of Sundarban, National Heritage Center of Bangladesh, is at a distance of 4.7 km in southwest from
the Site. Other than Sundarban, there are no eco sensitive areas within 10 km area. The site is surrounded by a
mix of agricultural lands and industrial facilities. Existing Cement and Refinery industrial cluster is in close
proximity along Jessore-Khulna-Mongla road.
Figure 59 -Eco sensitivity map
Mongla Town is at a distance of 1.7 km in southeast from the site (no road connectivity from N7). Mongla EPZ
is abutting the site. The nearest important places and their distance (aerial) form the site is presented in Table
No. 28.
Table 22: Nearest important places from Mongla EZ
Place Direction from site Distance from site, km

Bagerhat, District Head Quarters NE 26
Khulna, Division Head Quarters N 35
Dhaka, National Capital NE 158
Jessore (Airport) NW 85
Chittagong, Business Capital E 225
Figure 60 - Site photos

4.2.5. Topography
The area is generally flat and poorly drained. Soil
consists of peat and gray floodplain soils. It is
subjected to seasonal flooding. The ground level of the
EZ is around 1.50 to 2.0 m above the HFL (highest
flood level). The ground has been raised by dredged
material (fine sand) from the adjacent Pashur River.
Now the total area is full of fine sand.
Gopalganj-Khulna peat basin occupies a number of

low-lying areas between the Ganges River Floodplain
and the Ganges tidal floodplain. The major two beels
of the area are Baghia Beel and Chanda Beel. Thick
deposits of peat occupy perennially wet basins, but
they are covered by clay around the edges and by
calcareous silty sediments alongside the Ganges
distributaries crossing the area. This is the largest peat
stock basin of Bangladesh. The basins are deeply
flooded by clear rainwater during the monsoon
Figure 61 Physiographic map
Land use / Land cover
Major portion of the proposed site is plain land covered with dredged material. Presently cultivation is being
carried out in some of the areas. The site is free of any habitations.
Soil type
Soil Investigation has been carried out by BEZA through Consultancy Research & Testing Services,
Department of Civil Engineering, Khulna University of Engineering & Technology, Khulna during August
2014 for Boundary wall & Access Bridge and the same is considered for study of geotechnical characteristics.
Six boreholes up to the depth of 50 ft. from the existing ground level were drilled. Based on the information
obtained from subsoil investigation both in the field and laboratory, it is observed that the sub soil dominantly
consists of clay soils all through the depth of the boring. Sample Bore log data is depicted in the following
figures.
Figure 62 - Administrative Building Bore Log

Figure 63 Administrative building – Bore log site plan
Based on the information obtained from sub-soil investigation at the location of administrative building, the
sub-soil predominantly consist of clayey SILT from the existing ground surface to the depth of 60 ft. overlying
on the competent soil predominantly consisting of silty SAND extending to the bottom of the boring, which
should be considered while selecting a suitable type of foundation to support the structure.
In this site, for the construction of low rise building, spread footing may be used applying the proper ground
improvement method. For example, the soil up to about 6 to 12 m depth may be excavated and replaced with
sand having proper compaction. Then, the footing will be constructed on compacted sand bed. If the soil
below the shallow foundation cannot carry the super structural load without failure and with the resulting
settlements being tolerable for that structure, the foundation engineer may decide to place the super structure
on pile foundations that penetrate through the highly compressible soils to deeper and harder strata, located
at 60 ft. from the existing ground level.
Figure 64 Bridge – Bore log

Figure 65 Bridge – Bore log site plan
Based on the information obtained from sub-soil investigation at the location of the proposed bridge both in
the field and laboratory, it may be concluded that the sub-soil consists of predominantly clayey SILTS of soft-
stiff consistency upto the depth of 60 ft. from the existing ground surface overlying on the soil layer consisting
of silty SANDS of medium to dense compactness extending upto the bottom of the borings, which should be
considered while selecting a suitable type of foundation for the construction of bridge on Ghona River.
Figure 66 Boundary wall – Bore log

Figure 67 Boundary wall – Bore log site plan
Based on the information obtained from sub-soil investigation at the location of boundary wall both in the
field and laboratory, it may be concluded that the sub-soil dominantly consists of CLAY soils all through the
depth of the boring, which should be considered while selecting a suitable type of foundation to support the
wall.
4.2.6. Hydrography
Pussur River is the main water communication system in the Region. Mongla Port is located in the eastern
banks of Pussur River. The river is deep and navigable throughout the year for the large marine ships to enter
the Mongla Port from Bay of Bengal from Akram Point. Hydrographic chart of Pussur River is shown in the
following figure:
Figure 68 Hydrographic / Navigation Chart
The water level of the Pussur river rises from January-February to till July-August then recedes up to
December-January. A typical hydrograph of Pussur River at Mongla is given in the following figure
Figure 69 Typical hydrograph of Passur River

As per recorded water level data, the long term maximum high water level at Mongla station is 2.56 m and
minimum is 0.51 m. Presently, vessel of maximum 5 m – 6 m draught can proceed up to port jetty utilizing
tidal advantage.
4.2.7. Meteorological status

The area lies in the South-central climate zone of Bangladesh and shows tropical monsoon climate with three
prominent seasons - Summer/Pre-monsoon (March to May), Rainy/monsoon season (June to October) and
winter season (November to February). The rainy season is hot and humid, and characterized by heavy
rainfall, tropical depression and cyclone. The winter is predominately cool and dry. The summer is hot and
dry interrupted by occasional heavy rainfall.
Gentle north/north-westerly winds with occasional violent thunderstorms called northwester during summer
and southerly wind with occasional cyclonic storm during monsoon are prominent wind characteristics of the
region.
Monthly maximum temperature varies from 23.3 oC to 36.5 oC and the monthly minimum temperature varies
in the range of 12.2 oC to 27.8 oC. While April is the warmest month, January is the coldest month. Monthly
average relative humidity in the area varies seasonally from 70% to 90%. June, July and August are the most
humid months (80 % to 90 %) while during January to March it remains lowest (20% to 30%).
The region is characterized by Southerly winds from the Bay of Bengal during monsoon and North-westerly
winds from Himalaya during winter. Wind speed has been measured at 10 meter height and the mean wind
velocity of Mongla is 1.7 m/s (6.1 km/hr). The yearly mean wind rose shows that wind prevails flowing from
south to north direction in most of the time in a year.
Windrose diagram Wind speed map
Figure 70 –Windrose diagram and Wind speed map
Mongla is located in highly rainfall prone areas and the annual rainfall ranges from 1232 mm to 2786 mm
with an average 1946 mm per annum (Refer next Table). Almost 80% rainfall occurs in monsoon and a
negligible amount in winter.
Table 23: Rainfall at Mongla
Rainfall (in mm) at Mongla
Year Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec. Annual
1991 29 29 20 88 91 419 395 298 323 259 4 2 1957
1992 8 108 0 4 118 174 350 243 170 55 2 0 1232
1993 9 21 167 72 186 424 225 379 243 91 36 0 1853
1994 4 18 40 149 139 344 278 380 123 130 3 0 1608
1995 4 70 11 9 208 304 244 268 302 148 229 0 1797
1996 2 22 24 47 119 453 386 357 133 274 1 0 1818
1997 2 70 123 131 214 233 478 355 591 12 0 14 2223
1998 29 65 149 97 234 229 294 443 553 110 207 0 2410
1999 1 0 0 25 202 262 435 442 479 321 12 0 2179
2000 28 9 15 134 283 309 356 209 327 124 5 0 1799
2001 1 19 6 22 301 539 445 136 181 251 53 0 1954
2002 13 5 32 74 206 983 389 441 492 62 89 0 2786
2003 0 2 175 41 127 351 284 229 188 263 0 28 1688
2004 0 0 7 95 109 293 280 336 506 274 3 0 1903
2005 28 0 93 25 238 342 633 264 391 390 1 1 2406

Rainfall (in mm) at Mongla
Year Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec. Annual
2006 0 0 14 9 243 255 462 318 390 48 6 0 1745
2007 2 71 1 64 57 226 580 262 355 267 101 0 1986
2008 50 36 12 7 146 252 474 217 299 197 0 0 1690
Monthly mean 11.67 30.28 49.39 60.72 178.94 355.11 388.22 309.83 335.89 182.00 41.78 2.50 -
The monthly average sunshine hour in Mongla varies between 4-9 hour/day in a year. The monthly average
evaporation in Mongla varies between 3-5 mm/day.
4.2.8. Seismicity
Mongla area occurs in the Seismic Zone I. Seismically it is in the quiet zone
and the only historic high magnitude earthquake occurred in this zone was
cantered in the Sundarban. The possible maximum earthquake magnitude
in Richter’s scale is 7.0
As per tectonic classification, the area falls under Faridpur trough of

Western platform flank which is adjacent to the hinge line. Tectonically
this area is inactive and no apparent major structure like fault or fold exists
in the region that might be geologically significant. Figure 71 –Seismic zone
4.2.9. Ambient air quality

Monitoring of ambient air quality in the Cement Plants area near Mongla is periodically carried out by the
Department of Environment, Khulna Division. The rural areas of Mongla were also monitored. The maximum
concentration of pollutants monitored is given in the following table with the Air Quality Standards.
Table 24: Ambient air quality
Maximum Pollutant Concentration Range, ug/m3

Location
PM2.5 PM10 SO2 NOx CO
Mongla Rural Area - 140 8 16 -
AQ Standards* 65(24-hly) 150 (24-hly) 365 (24-hly) 100 (Yearly) 10000 (8-hly)
The monitored values (existing baseline status) were found to be well within the Ambient Air Quality Standards
stipulated by DoE.
4.2.10. Noise levels

The area is completely rural and no major point source of noise exists within the vicinity. The monitored
equivalent noise levels (Leq) were found to be <50 dB (A) during day times (6 am to 9 pm) and <40 dB (A)
during night times (9 pm to 6 am) and were found to be well within the Ambient Noise Standards.
Noise Quality Standards (Leq) * for Mixed Zone, dB(A) 60 50
4.2.11. Water environment

The minimum monthly discharge (occurs during February) of the Passur River is 6000 m3/sec where the
highest flow is 22,500 cubic meter per sec during wet season (BWDB, 2005). The approximate range of the tide
observed at Mongla station is between 1.2 m to 3.5 m and the tidal amplitude is around 3.25 m (Data : MPA).
The mean water level (Chart Datum) at Mongla is 0.87 m.
Water quality of the Pussur River at Mongla was being monitored by DoE Laboratory of Khulna Division and
the data for Year 2010 is given in the following table.
Table 25: Water quality of Pussur River at Mongla Port – 2010
Alkalinity
Salinity
Turbid
Temp.
BOD
COD
TDS
DO
TS
EC
CT
SS
T.
Location
Date
pH
NTU
mg/l
mg/l
mg/l
mg/l
mg/l
mg/l
mg/l
mg/l
mg/l
S/c
oC
m
1 7-Jan 27.4 7.74 3010 879 36 68.7 1565 1510 55 5.1 0.8 55 1.6
2 7-Jan 27.1 7.72 3020 878.8 36 68.5 1570 1510 60 5.1 0.8 55 1.6
3 7-Jan 27.8 7.71 3030 879 36 68.8 1565 1510 55 5.1 0.8 55 1.6
1 11-Feb 29.8 7.66 4380 1262 36 182 2390 2180 210 4.7 1 76 2.3
2 11-Feb 29.2 7.63 4380 1268 36 178 2390 2190 200 4.7 1 76 2.3
3 11-Feb 29.1 7.65 4380 1263 36 179 2380 2180 200 4.7 1 76 2.3
1 9-Mar 32.6 7.56 11780 2944.4 38 176 6080 5890 190 4.7 1.2 76 6.7
2 9-Mar 32.6 7.57 11780 2945.2 38 178 6080 5890 190 4.7 1.2 76 6.7
3 9-Mar 32.1 7.55 11780 2946.4 38 177 6090 5890 200 4.7 1.2 76 6.7
1 17-Apr 32.6 7.59 25300 8273 36 185.6 12950 12700 250 4.6 0.7 136 15.5
2 17-Apr 32.6 7.59 25300 8273 36 186.2 12950 12700 250 4.6 0.7 138 15.5
3 17-Apr 32.6 7.59 25300 8273 36 184.8 12950 12700 250 4.6 0.7 136 15.5
1 5-May 32.6 7.59 29200 9480 36 198.6 14900 14600 300 4.5 1.2 177 17.6
2 5-May 32.9 7.54 29200 9470 36 198.6 14900 14600 300 4.4 1.2 177 17.6
3 5-May 33.2 7.57 29200 9470 36 199.6 14900 14600 300 4.5 1.2 177 17.6
1 13-Jun 31.6 7.69 18000 5820 36 112.6 9200 9000 200 4.7 1.1 97 10.8
2 13-Jun 31.6 7.69 18000 5800 36 113.2 9200 9000 200 4.7 1.1 97 10.8
3 13-Jun 31.6 7.69 18000 5810 36 112.4 9200 9000 200 4.7 1.1 97 10.8
1 1-Jul 31.6 7.69 440 32.6 36 76.6 285 220 65 5.2 0.8 26 -
2 1-Jul 31.6 7.69 440 32.6 36 76.6 285 220 65 5.2 0.8 26 -
3 1-Jul 31.6 7.69 440 32.6 36 76.6 285 220 65 5.2 0.8 26 -
1 5-Aug 31.6 7.69 275 16.6 36 68.6 192 137 55 5.3 0.7 22 -
2 5-Aug 31.6 7.69 275 16.6 36 68.6 192 137 55 5.3 0.7 22 -
3 5-Aug 31.6 7.69 275 16.6 36 68.6 192 137 55 5.3 0.7 22 -
1 8-Sep 31.6 7.74 270 15.6 36 65.6 180 135 45 5.5 0.7 22 -
2 8-Sep 31.6 7.76 270 15.6 36 65.6 180 135 45 5.5 0.7 22 -
3 8-Sep 31.6 7.74 270 15.6 36 65.6 180 135 45 5.5 0.7 22 -
1 12-Oct 30.6 7.79 290 26.6 36 62.6 192 145 47 5.6 0.7 22 -
2 12-Oct 30.6 7.78 290 26.6 36 62.6 192 145 47 5.6 0.7 22 -
3 12-Oct 30.6 7.78 290 25.6 36 62.6 192 145 47 5.6 0.7 22 -
1 5-Nov 24.6 7.79 340 38.6 36 56.6 210 170 40 5.6 0.7 22 -
2 5-Nov 26.6 7.79 340 38.6 36 56.6 210 170 40 5.6 0.7 22 -
3 5-Nov 25.6 7.79 340 38.6 36 56.6 210 170 40 5.6 0.7 22 -
1 12-Dec 21.5 7.72 520 62.6 36 72.6 320 260 60 5.1 0.9 25 0.4
2 12-Dec 20.9 7.71 520 62.6 36 73.6 320 260 60 5.1 0.9 25 0.4
3 12-Dec 21.1 7.72 520 62.6 36 71.6 320 260 60 5.1 0.9 25 0.4
Location 1 - Port side river sample, Location 2 - Middle of the river & Location 3 - Opposite of Mongla Port
(during high tide periods).
Deep ground water aquifer is the main source of domestic water supply in this area as the shallow aquifer shows
salinity, which is also subject to salinity intrusion from river and sea. The depth to the fresh ground water table
in the project area ranges from 700 ft. (213.36 meter) to 900 ft. (274.32 meter) (Date : DPHE, Rampal). The
ground water quality of Mongla (from available bore well data) is given in the following table:
Table 26: Ground water quality
Sl. No. Parameters Units Sample from Sample from Sample from Standard
BH 7 BH 8 BH 9
1 pH 8.10 (20.50C) 8.09 (20.60C) 8.11 (20.70C) 6.5 – 8.5
2 Total hardness ppm 89.62 62.72 98.56 200 – 500
3 Chloride ppm 34.34 23.31 36.20 150 – 600
4 Sulphate ppm 41.5 28.16 43.75 400
5 Iron ppm 0.132 Trace Trace 0.3 – 1.0
6 Arsenic ppm 0.005 0.002 0.002 0.05
4.2.12. Infrastructure
Power
Bangladesh has small reserves of oil and coal, but potentially

very large natural gas resources. Commercial energy
consumption is around 75% natural gas, with the remainder
almost entirely oil (plus limited amounts of hydropower and
coal). Presently about 60% of the total population has access to
electricity including renewable energy. Per capita power
generation of 292 Kwh through 8537 MW installed capacity.
Power Grid Company of Bangladesh Ltd. (PGCB) is responsible

for operation, maintenance and development of transmission
system all over the country. Presently power generated in
various power plants in Bangladesh is transmitted to the
national grid through 230 kV and 132 kV transmission lines.
Electricity distribution system is controlled by national grid.

Total electric power, generated from the power plants is first
supplied to the national grid then to the whole country through Figure 72 –Power grid network
national grid. The Padma-Jamuna-Meghna River divides
power distribution system into two zones, East and West. The East contains nearly all of the country’s electric
generating capacity, while the West, with almost no natural resources, must import power from the East.
Presently there are no feeder lines available near by the proposed site. Separate dedicated 33KV line to be
planned from the nearest substation. Mongla 132/33 KV substation is available within 3 km from the proposed
Mongla EZ. The available surplus capacity is to be confirmed by the respective authority.
Water
Presently Mongla EPZ is served by a dedicated water supply network from Rampal. Groundwater source at
Mongla is of saline in nature. It is proposed to provide a dedicated water supply network along with pumping
stations at Rampal.
4.2.13. SWOT Analysis

Strength
 The proposed land for Mongla EZ is located strategically

 The shape of land is almost rectangular
 Topography variation is very minimal
 Located in the vicinity of industrial clusters (cement, refineries, and aqua-culture)
 The proposed land is free from encumbrance and constraints
 No vegetation on site
 Proximity to Jessore-Khulna-Mongla Road
 There is no habitations within the site and hence no resettlement required
Weakness
Presently the access to the proposed site is only through Mongla EPZ and there is no direct road
access to the site
 The Jessore-Khulna-Mongla Road is poor condition and needs a major upgrade
 The Chittagong port is far from Mongla EZ.
 High water table since the site is surrounded by rivers
 Upgradation of Jessore-Khulna-Mongla road is necessary to cater the additional traffic
 No direct access road to this site
 Dedicated power line and new substation to be planned
 Ground water is saline.
 Water transmission network to be planned from Rampal
 There is no availability of gas in the nearby vicinity
Opportunities
 The Mongla port is located within 200 meters.

 Close proximity to Rail line
 Availability of Skilled and unskilled labours in close proximity
 Proximity to existing substation at Mongla
Threats
 Surrounded by Mongla River, Ghona River and Pussur River which necessitates for filling to
mitigate the flooding.
 Presence of Mongla EPZ will affect the uptake opportunities
4.2.14. Site assessment – compliance matrix

For the assessment of suitability of land for the proposed Economic zone, a structured approach has been
adopted. The key parameters for each critical success factor influencing the selection and suitability of land are
identified and each parameter has been assigned a weightage for conducting a rationale evaluation to finalize
the land for the development. The critical success factors influencing the land selection criteria are:
 Status
 Connectivity
 Physical features
 Infrastructure availability
 Environment and social considerations
 Business considerations
The site evaluation matrix with details on the critical success factors, evaluation parameters and corresponding
weightage is shown in the following table.
Table 27: Compliance matrix
CSF
S. Critical Success Weight
Weight Parameters to evaluate the CSF Score
No. Factor (CSF) age (%)
(%)
1 Status 30% Land identification 5% 5%
Tenure 5% 5%
Land acquisition 5% 5%
Land price 15% 12%
2 Connectivity 25% Resource availability with specific 5% 3%
reference to target industries
Nearest rail head and its distance from 5% 2%
the identified site
Distance from nearest National 5% 4%
expressway / state highway
Nearest airport and its distance from 2% 0.5%
the identified site
Nearest sea port and its distance from 5% 5%
the identified site
Nearest urban settlement and its 3% 3%
distance from the identified site
3 Physical features 20% Size & shape 5% 5%
Topography 5% 4%
Soil conditions 5% 2%
Accessibility 5% 2%
4 Infrastructure 10% Industrial power & network 5% 4%
availability Water for industrial use 4% 2%
Sewerage disposal & storm water 1% 0

disposal point
5 Environment and 13% Environment regulations 5% 4%
social Building regulations 4% 3%
considerations Surrounding areas 4% 2%
6 Business 2% Presence of competing facilities 1% 0
considerations Supporting business environment 1% 1%
Total 100% 73.50%
As can be seen from the above, the identified site qualifies for undertaking the proposed development activity
by scoring a decent score of 73.5%.
4.3. Zone Definition
4.3.1. Need for Zone Demarcation

Further to the completion of land identification exercise, it would be imperative to prepare an indicative
‘thematic’ map showing the areas and features which could influence the development of Economic Zone. This
map would also render support in terms of providing details on the connectivity issues and infrastructure
linkages vital for the sustained operation of the proposed development activities planned in the EZ.
The method of planning the physical layout of the EZ is fundamental to sustainability. This would entail
proliferation of land use practices that create and maintain efficient infrastructure, well – planned
neighbourhoods and preservation of natural systems. Hence the need for demarcation of EZ assumes greater
significance.
Existing land uses become one of the most important considerations in deciding future land use requirements.
Reviewing and evaluating the land use within the influence zone is one of the most important tasks in
determining the physical plan and ultimately the characteristics of the development and quality of facilities
proposed within the core area. Land use options must be carefully analysed to insure new uses are supportive
and complementary to the existing land use patterns in the area
The relationship between uses such as agricultural, industrial, residential, commercial, institutional,
educational and recreational, and the expanse and intensity of each use, directly impacts the characteristics of
the proposed development.
4.3.2. Methodology
The methodology adopted for demarcation of physical boundary of EZ and its surrounding area is detailed
below:
o GIS data of the influence area up to 30 km radius of the identified site was collected from the following
sources:
 Shuttle radar topographic mission data for contour delineation

 Landsat 7 global imagery mosaic (natural colour, pan - sharpened) and interpretation with
Google earth
o The collected GIS data was studied in detail to generate information on the existing land use pattern of
the influence area covering the following features:
 Administrative boundaries
 Major cities, towns/villages
 Settlements in the influence zone
 Industries
 National Highway, major roads and minor roads, railway lines, airport, sea port etc.
 General topography
 Hydrology - rivers, streams and water bodies
 Land use – agriculture, wet lands, barren, savanna land etc
 Mixed vegetation, scattered shrubs
 Forest area
 Areas with striking features such as hills/cliffs (greater than 100m)
 Institutes
 Location of power source (substation)

 Location of water source
4.3.3. Influence area Key features

Figure 98 shows existing key features in the project influence area.
Figure 73 –Influence zone key features
4.3.4. Land use

This part of the study focuses in depth on the detailed land use of the area adjoining EZ (30 km radius). Study
of land use in the adjoining areas includes Water body, streams, Forests, Agriculture and Aquaculture land and
settlements.
4.3.5. Transportation network

Based on the GIS data, transport pattern was studied to identify national highway, major and minor roads
traversing the influence area. This information was used in preparing spider diagram depicting network of
motorable roads of lengths for 200 km for assessing the cost of transportation and transaction cost of raw
materials to the occupant unit of the EZ. In addition, information on existing railway lines, airport, major
settlements, and infrastructure linkages is also provided. Further the data was utilized as a guiding tool for
proposing the transportation network to support the proposed development. Figure 99 depicts the road
network of motorable roads.
Figure 74 – Transportation network and spider diagram – 30 km radius
4.3.6. Topography
In order to understand the topography of the area with respect to the constraints and opportunities presented
by the site, a contour map has been prepared at 1m interval and presented as Figure 100. The map will enable
the planning process to have an assessment of the high and low contours of the site in terms of ridges, hilly
areas and streams for designing the infrastructure systems and positioning of the components.
Figure 75 – Contour map at 1m interval

4.4. Master Plan
4.4.1. Planning Principles

The aim is to develop Food processing, Apparel and Readymade garments and Light engineering sectors in the
proposed EZ along with excellent state-of-the art infrastructure facilities and professional management to
attract and support investments in industrial sectors.
Hence, EZ in the form of prepared land is proposed with general and specialized infrastructure facilities. It
focuses on development of large, medium and small scale industries, as also trading and services. All facilities
required for target industries are planned for in this EZ. Thus, the proposed EZ will function as an integrated
package having the required facilities and service activities with sufficient provision for future growth and
expansion.
Given the industrial base and the concept of EZ for taking cluster advantage, the proposed project will further
strengthen Khulna District’s position in the industrial sectors map of Bangladesh and will contribute to the
economy. A careful planning exercise has been done to position the project taking into account the geographic,
demographic, raw material resources, industrial, economic and social characteristics of region and it is in this
context master planning of the project assumes significance.
The purpose is to create a thriving place where industrialists in the targeted sectors, entrepreneurs, venture
capitalists, investment bankers can work, live, learn and play. It is important to develop the master plan to
accommodate both the user industries area requirements and requirements of the various identified
development components of the proposed EZ.
In order to implement this uniquely conceived EZ into a fully integrated functionally best facility and to
promote a new 'industrial cluster image in Bangladesh, as well as to develop confidence for foreign and local
investors to undertake the development of the project and subsequent operation of their businesses, certain
planning objectives / principles are envisioned as depicted in Figure 101.
Propose a set of planning standards to be adopted
Designate broad land use distribution of the whole site
Evolve land use mix – industrial plots for the identified sectors, social amenities, general
infrastructure, specialized & specific infrastructure, road, open & green space etc.
Position the zone to accommodate various types of target industries and to ensure compatibility
Provide an integrated infrastructure system network to support the development
Develop requirements of various public utilities and evolve phasing of the project
Compliance to various planning norms & guidelines of Bangladesh government
Figure 76 –Planning principles and objectives

4.4.2. Planning Concept

The planning concepts for the proposed EZ are as depicted in the Figure 102. The EZ shall be a self-contained
region with a salubrious surrounding and is envisaged to be developed as “Sustainable-holistic-smart
intelligent-eco-Economic zone.
Create excellent brand

Create a vibrant
image in the master Promote variety and
integrated industrial
planning to attract diversified inbuilt
region with an
major corporate & MNC environment through
inclusive growth
communities for flexible mix of uses
concept
conducting business
A place for achieving:

•Work - live - learn - play
Create a dynamic, Enhance physical
•Dynamic, vibrant &
vibrant and bustling connectivity to
sustainable community
investment region to adjoining districts &
•Industry – institution
attract investors states
interaction and
networking
Create a holistic package

Design shall be based by integrating with multi
Create green
upon modern formatted development
environment
planning concepts with excellent
infrastructure facilities
Establish world class

The guiding principle for
work environment
the design is to create a
targeting essentially
conducive place for
the domestic and
attracting reputed
foreign target
domestic and foreign
companies at an
companies/institutions /
affordable cost
research centres
structure
Figure 77 –EZ planning concepts

4.4.3. Economic Zone Planning Consideration

The planning for the proposed EZ is based on the broad objective of establishing a world class business
environment targeted essentially at high growth manufacturing and processing industrial & related
infrastructure sectors.
Each zone within the EZ shall be planned to be dedicated to the specific sub sector and would be a self-sufficient
unit in terms of facilities, ability to attract investors and revenue generation.
From the planning point of view, the EZ is a package of number of land uses. The processing activities are prime
activities and the efficiency of production is enhanced by a number of other activity zones. These include post-
harvest activities, linking infrastructures, marketing infrastructure, R & D services, community facilities and
green spaces.
Social and commercial amenities are also planned to provide convenience to visitors as well as to the working
population within the EZ. The project is planned to be housed in a lush green environment and accordingly,
landscaping and greenery are planned.
While planning the EZ, the following vital issues were addressed along with strategies for successful
implementation and sustained operation of EZ:
 Land use and layout: The whole area is suitably divided into a number of identified activity centres of
different sizes. The layout is developed with complete understanding of the phasing program. Integration
of the financial aspects with physical planning aspects is the most important factor for success in
implementation.
 Constraints and core offering of the site: As enumerated in Site analysis chapter, all the site-specific
constraints are fully respected and mitigation measures are fully taken into consideration while developing
the master plan. Similarly, the planning fully leverages the core and supplementary offering of the site.
 Services and amenities: The master plan takes into account planning for services and amenities.
 Addressing shortage of housing for the workforce: Provision is made for sustainable integrated
township with multi-format development enabling a strong work live play concept.
 Lack of enforcement / control on land use and growth of unapproved housing / layouts:
Well-conceived EZ implementation framework shall be suggested to address these issues.
 Non uniform distribution / concentration of industrial growth pockets: A structured industrial

zoning in terms of raw material, effluent generations, pollution level category, end product distribution
etc. is done and accordingly sub zones in EZ are suggested.
 Shortage of skilled/ trained manpower: The EZ shall house training centres, skill development
centres, educational and employability improvement centres.
 Conservation of ground water & surface water resources: Sustainable infrastructure planning,
incorporation of eco-friendly concepts and environment sustainability, water conservation schemes,
environmental infrastructure, recycling and reuse options etc. are incorporated in the EZ development
program.
 Transportation: The master plan looks at the transport linkages. As the EZ will have regional, national
as well as international linkages for freight movement, it generates lot of traffic. A well-developed logistic
hub for both raw material and finished product is planned to cater to the transport systems.
 Poor quality of roads & unplanned road junctions leading to traffic congestions: EZ
development plan identifies the constraints and appropriate road network including the approach roads,
road congestion removal by the provision of grade separators and hinterland connectivity, augmentation /
widening of existing roads are being suggested.
 Environmental management: Various aspects such as adherence to pollution control norms &
standards control over goods, storage and handling of industrial waste, common treatment, etc. are given
paramount importance while planning.
4.4.4. Zones Spotting

The whole area is divided into various zones. The zoning design is done in order to have a smooth pedestrian
circulation by simplifying the movement patterns and allow the inter-zone movement. Parking is planned at
strategic locations catering to the visitor’s vehicles.
Following site parameters are considered while positioning the zones.

 Boundary shape
 Physical site features
 Area availability
 Environmental considerations
 Micro climatic conditions
 Compatibility issues
 Surrounding areas
 Accessibility
 Transportation issues
 Visibility
4.4.5. Zoning, product mix and facility configuration

A well-balanced land use is perceived with a judicial mix of business, commercial, social and residential zones
as illustrated in the Figure 103 & 10.4.
Multi facility
Institutional complex,
zone amenities,
utilities
Logistics Residential
zone zone
Greenery
Industrial Economic
and
zone Zone
walkways
Figure 78 – Zoning, product mix and facility configuration
Industrial zone
•Anchor units, ancillary units of Food processing, Apparel and RMG and Light engineering sectors, QA / QC
labs, R & D centre, value addition centres, etc.
Logistics zone
• Loading and unloading yards, transportation hubs, cargo handling centers, raw material collection
• and storage halls, finished goods storage, etc.,
Institutional and amenities zone

•Play school for toddlers, crèche, knowledge cell, marketing intelligence, retail, poly clinic,
recreational areas, parks, play grounds, administrative buildings, etc.
Multi facility complex,

utilities
•ETP, STP, WTP, SWM, sewer network, communication network, street lighting, wastewater
network, electrical substation, etc.,
Residential zone
•Multi formatted housing, guest houses, etc.
Greenery and walkways

•Green belt along the boundary, lawns and parks, tree plantation along the proposed roads, internal
walkways etc.,
(Source: MACE analysis)
Figure 79 – Description of EZ zones, product mix and facility configuration
The summary of considerations for master planning is depicted in Figure 105.
•Master Planning
1 – Objectives,
Guiding Factors Layout planning
2 •Land use pattern

Components of zones
based on concept and
•EZ–Product Mix functional requirement
3 configuration
•EZ– Zone area
Infrastructure requirement,
4 need demarcation
assessments
•External
5 infrastructure Utilization of natural
site opportunities
•General
Infrastructure
6 and support
facilities Facilities and amenities
planning
7 •Green Concept

Figure 80 – Master planning considerations
4.4.6. Economic Zone land use pattern

The land use pattern of the EZ is determined considering the land requirement for various processing units,
logistics requirements, research, capacity development, skill development, residential facilities, schools and
various social amenities etc.
Table No. 34 provides the land use pattern for the proposed EZ. Figure 106, 107 and 108 provides the land use
pattern for the overall EZ.
Table 28: Land use pattern for the proposed EZ
Saleable area Non saleable area

Land use pattern in Acres In %
Acres In % Acres In %
Processing area
Industrial area
Food processing 37.05 18.06% 37.05 18.06%
Apparel /RMG 70.27 34.26% 70.27 34.26%
Light engineering 12.34 6.02% 12.34 6.02%
Total industrial area 119.66 58.34%
Specialized infrastructure
Warehouse 2.32 1.13% 2.32 1.13%
Truck lay bay 3.78 1.84% 3.78 1.84%
Q.A & Q.C lab 2.82 1.37% 2.82 1.37%
R&D facility 3.15 1.54% 3.15 1.54%
Training center 2.57 1.25% 2.57 1.25%
Total specialized infrastructure 14.64 7.14%
Public amenities 3.79 1.85% 1.89 0.92% 1.89 0.92%
Utility 4.96 2.42% 2.48 1.21% 2.48 1.21%
Road 26.77 13.05% 26.77 13.05%
Green & open space 24.10 11.75% 24.10 11.75%
Total processing area 193.91 94.54%
Non processing area
Entrance plaza 1.53 0.75% 1.53 0.75%
Admin block 2.38 1.16% 2.38 1.16%
Guest house 0.79 0.39% 0.79 0.39%
Investors club 1.11 0.54% 1.11 0.54%
Crèche 0.44 0.21% 0.44 0.21%
Residential 1.35 0.66% 1.35 0.66%
Retail 0.29 0.14% 0.29 0.14%
Place of worship 0.39 0.19% 0.39 0.19%
Road 0.89 0.44% 0.89 0.44%
Green & open space 2.02 0.99% 2.02 0.99%
Total non-processing area 11.19 5.46%
Grand Total area 205.10 100.00% 142.21 69.34% 62.89 30.66%

Non processing
Green & open area
5.46% Food processing
space 18.06%
11.75%
Road
13.05%
Apparel /RMG
34.26%
Utility
2.42%
Public amenities
1.85%
specialised
infrastructure Light engineering
7.14% 6.02%
Figure 81 – Land use pattern – EZ
Green & open

space
Road 12.43%
13.80% Food processing
19.11%
Utility
2.56%
Public amenities
1.95%
Training center
1.32%
R&D facility
1.63% Apparel /RMG
Q.A & Q.C lab
1.45% 36.24%
Truck laybay Warehouse Light engineering

1.95% 1.19% 6.36%
Figure 82 – Land use pattern – processing area
Entrance plaza
Green & open space 13.67%
18.09%
Road
7.99%
Admin block
21.24%
Place of worship
3.46%
Retail
2.57%
Guest house
7.08%
Residential
12.07% Creche Investors club
3.91% 9.93%
Figure 83 – Land use pattern – Non processing area
Based on the above land use pattern 69.34% of land area accounts for saleable area and remaining 30.66% of
land area accounts for non-saleable area. Out of 69.34% total saleable area, 58.34% and 7.14% accounts for
industrial use for targeted sector and specialised infrastructure respectively. 3.86% of total saleable land area is
earmarked for public amenities, utility, residential and retail area.
Minimum of 10 % green space required as per international planning norms in practice is being earmarked at
strategic locations in the master plan. Private Green within the industrial plots is not included in the
computation of overall green area of EZ. The greenery will be concentrated at the boundary of zones and at
pocket parks.
4.4.6.1. Industrial Land

From the proposed land use distribution it can be seen that industrial usage is the predominant land use.
Besides offering pleasant environment for people to work, the development will offer a variety of prepared land
plots complete with infrastructure for clients to build their own factories. Industrial land will be marketed as
prepared land sites complete with infrastructure.
The Parcellation of plots is done depending upon the types of industries to be accommodated. Occupant units
can merge or sub-divide the prepared land into appropriate sizes to meet their own requirements. Conversely,
the larger plots can be subdivided by introducing some minor roads if the demand is for small plots. Prominent
sites which normally command a slightly higher land premium are reserved for industrial brand names and
multinational companies (MNCs) who desire these prime locations for enhancement of their corporate image
and are ready to pay a premium price for the same. Apart from general infrastructure, specialised
infrastructure required for a particular zone is also envisaged.
A variety of small and large plots are provided to meet the varied needs of the industrialists.
4.4.7. Sustainability Initiatives

The development of the EZ is driven on strong foundation of sustainability concepts and these needs were built
right in the conceptualization stage itself. The sustainable elements conceived in the concept plan include use
of eco-friendly materials, recyclable material, avoidance of toxic chemicals, usage of environmental friendly
products, waste minimization technologies, scientific treatment of waste and energy recovery possibilities to
reduce power consumption etc. as shown in Figure 110.
Rain water
harvesting
Zero
Energy discharge
efficiency
Implementatio
n of
sustainability
Waste ideas Waste
minimizati
recycling
on
Scientific
manageme 3-R
nt of waste concepts
disposal
Figure 84 – Sustainability initiatives
4.4.8. Master Plan Components

Detailed master planning is done cluster wise covering the following components:
 Micro level zoning

 Land use plan
o Detailing the locations and sizes of various land uses
 Land parcel plan
o Showing the subdivision of industrial land
 Phasing
 Utilities mapping
 Greenery and open space plan
 Road category
The master plan of EZ is given in Figure 111.

Figure 85 – Master plan of EZ
4.5. Infrastructure and Facilities
4.5.1. Coverage Area and Objectives

The industrial, environmental, physical & social infrastructure objectives of EZ are described in Figure below
• Integrated development of EZ with backward and forward linkages and other allied infrastructure
• Establishing specialised infrastructure in the production zones
• Establishing industrial and manufacturing zones with compatible township and other social infrastructure development
Industrial • Development of logistics
infrastructure • Development of knowledge hubs, education hubs, research hubs
• Development of municipal solid waste collection, transport and treatment facilities

• Development of industrial waste management system - hazardous & non hazardous, collection, transport and landfill
• Water infrastructure - source development treatment and recycling
Environmenta • Development of wastewater treatment and recycling
l • Sustainable environmental management plan of the region
infrastructure
• Development of transportation infrastructure in an integrated manner

Physical and • Residential, commercial, institutional, social for a holistic industrial investment and business environment
social
infrastructure
Figure 86 – EZ infrastructure objectives
The infrastructure is the key requirement for sustainable operation of the EZ. Infrastructure requirements are
categorized as follows:
1) Infrastructure within EZ
2) Specialized infrastructure
3) External connectivity and offsite infrastructure for EZ.
All the necessary infrastructure facilities for the development are designed to create an ideal ambience and best
environment.
4.5.2. Detailing of Economic Zone Infrastructure

Figure 113 elaborately detail the infrastructure planned within EZ.
Components Detailing of utilities, infrastructure within EZ
o 65% of the site is already filled with dredged sand up to 1.8 m from the
natural ground level and remaining area filling is considered in the offsite
infrastructure.
 Site grading
o The existing topography of the site is generally sloping with minor
undulations, gently sloping towards the east direction with variation of
about +6 m to +4 m
o A compound wall all along the EZ boundary to a height of 2.1 m above NGL
is proposed to be constructed and provided with 0.9 m height barbed wire
 Boundary wall
fencing on top.
o The total length of the compound wall is estimated to be 4000 m.
o Arterial, primary & secondary roads are planned to give access to the
industries within EZ apart from catering to residential and commercial
 Roads – General zones and shall be looped with inter connecting roads
considerations o In order to maximize lead values and minimize land taken by major and
minor roads, a proper hierarchy of roads is proposed to ensure smooth
traffic movement inside EZ
o Different categories of roads are proposed for the internal road
 Roads – categories transportation network
o The details are given in Table No. 35.
o Routes and paths are provided for easy movement of visitors with sufficient
care so that no transport system comes in the way of pedestrians.
o Aesthetically designed walkways are provided along with lush green
environment on either side of road.
 Roads – pedestrian o Pedestrian walkways are provided for all categories of roads.
walkways o All services for drains, sewers, water, power and telecom are contained
within the road right of way.
o Necessary signage, street name boards, zone guiding maps and visitors
guidance map etc. are planned to be positioned at necessary locations, such
as intersections and at various strategic locations in each zone.
o No access is planned to be allowed near the road junctions and it is

recommended that ingress / egress points will be with a set back at least 30
m from the road junction
o In the proposed EZ, flexible pavement structure is recommended for the
following reasons:
 Ease of rehabilitation in consideration for anticipated long-term
settlement.
 Lower reinstatement cost to accommodate future laying of utility
services
o The typical composition of flexible pavement structure is detailed in Table
No. 36 considering California Bearing Ratio (CBR) value of 2% and 10
Million Standard Axles (MSA)
 Roads - pavement o Wherever necessary, the unsuitable soil at sub grade/below sub grade level
structure shall be replaced with suitable materials as per standard specifications. The
sub grade soil shall have CBR value of 2%. If the CBR value of the sub
grade is less than 5%, a capping layer of 150 mm thickness of material with
a minimum CBR of 5% shall be provided in addition to the sub-base.
o A single layer of dense bituminous base course (DBM) and bituminous-
wearing course should be delayed in the initial construction and could
instead be laid 12 months later or in the subsequent road development
program. This would minimize reinstatement costs during subsequent
underground services lying, road crossings, connections and settlement in
the filled areas.
o Based on the topography of the EZ, the drainage pattern has been decided.
 Surface drainage –
o In order to prevent the storm water entering from adjacent areas to the
general
development area, a cut-off drain all along the periphery of the site is
considerations
considered and connected to existing river / discharge points.
o The peak runoff and discharge capacities are computed based on the
following design parameters.
 The peak runoff is planned to be computed based on rational formula:-
Q = C * I * A / 360
Where, Q = Quantity of runoff, m3/s
C = Coefficient of runoff
I = Intensity of rainfall, mm/hr
A = Catchment area, hectare
Peak runoff
 Considering the nature of soil/ surface, the coefficient of runoff
adopted in the drainage computation are given below:
0.9 - for built-up area
0.5 - for road and other paved area
0.2 - for greenery and open areas
 Maximum annual rainfall intensity of 1947 mm for Mongla for the year
1991 to 2008 is considered for storm drain design.
 The sizing of the drains are designed based on the discharge capacity of
Qc to cater adequately the estimated peak runoff using Manning's
sizing
formula: -
Qc = (1/n)* A * R 2/3 * S½ (m3/sec)

Where
A = Area of cross-section of drain (m²)
R = Hydraulic mean radius (m)
S = Hydraulic gradient
n = roughness coefficient
 The drainage system is planned to cater for the entire EZ through
gravity flow.
 Drains are proposed to be provided on both sides of the roads.
 Open trapezoidal drain is considered for the surface run off collection
due to easy maintenance for the primary road. Stone pitching is
 Surface drainage – considered for the side walls and PCC for the base.
design & scheme  Covered rectangular brick masonry drain is considered for the
remaining areas for optimization of area under drainage.
 RCC box / pipe culverts of suitable sizes are considered for road
crossings.
 Rainwater harvesting structures are envisaged all along the drain at
every 30 m interval.
 Water demand o The water demand estimation norms considered for arriving the water
demand is depicted in Table No. 37.
o Water losses occur in the distribution and transmission network. The
percentage of loss depends on the pipe material, jointing system, etc. As
this is a complete loss, it is attempted to keep these losses below 10% of the
total demand.
 Water losses o Potable water has been considered to be used for processing, bathing and
washing clothes, cooking, drinking and washing vessels.
o Non potable water has been considered to be used for gardening, cleaning,
cooling and toilet flushing.
o The water consumption pattern assumed is given in Table No. 38.
o Fire demand in litres per minute has been calculated based on the following
formula:
QFD = 4000 x (P)0.5 x (1-0.01 x (P)0.5)
Where P = Population in thousands per hectare
 Fire protection QFD = 1006.90 lpm
demand - non potable = 60.41 cum/hr
o Considering two hours fire demand requirement, the total quantity of water
required for fire protection is 120.83 cum.
o Demand for firefighting has not been considered under daily demand as
one time storage of 120.83 cum i.e. 2 hours of fire demand will be created
and maintained.
o Based on the computation and analysis, the total average water demand is
 Average water
estimated and presented in Table No. 39.
demand
o The water demand estimation for different components in the processing
and non-processing area is depicted in Table No. 40.
 Water storage o Based on the above estimates, the following infrastructure for the EZ is
proposed.
o Underground storage tank
 The total storage capacity of the underground storage tank based on 24
hrs. Storage requirement is proposed is shown in Table No. 41.
 Totally there will be 4 underground storage tanks for storing portable
and non-portable water including fire demand for processing and non-
processing area respectively.
o Elevated level service reservoir (ELSR)
 The total storage capacity of the overhead storage tank based on 2 hrs.
Storage requirement is shown in Table No. 42
 Totally there will be 4 ELSR for storing portable and non-portable
water including fire demand for processing and non-processing area
respectively.
 As per standard norms, the tail end should have a minimum residual
pressure of 7.0 m. To meet the norms, the staging height of ELSR shall
be fixed accordingly by the project implementation company.
o Water pumping station for potable and non-potable water is required for
 Water pumping pumping from the underground storage sump to respective ELSR.
station o The water supply scheme including distribution is planned based on the
peak flow, minimum residual pressure and pipe material.
o It is proposed to provide separate water distribution network for potable
and non-potable supply.
o The design criteria for the design of water supply network are given below.
 Demand computed based on the analysis.
 Working hours per day - 24
 Pipe material
 For pumping main - DI (K9)
 For distribution up to 200 mm dia - HDPE (PE 100)
 Water distribution
 For distribution above 200 mm dia - DI (K7)
network
 Pipe roughness coefficient - 140 for DI and - 150 for HDPE
 Formula used for friction loss - Hazen Williams
 Minimum residual pressure at all tapping points - 7.0 m
 ELSR staging height - as per design requirement
o The proposed pipe size and pumping capacity are given in Table No.43
and Table No. 44.
o Proposed pump capacity for pumping the water from underground sump to
ELSR is given in Table No. 45.
o The sewerage system is planned to cater for the anticipated peak discharge
requirements and to treat the waste to the required discharge standards.
o The estimation of the sewage shall vary depending upon the land use
 Sewage quantity
distribution.
estimation
o The domestic sewage to be generated has been assumed to be 80% of the
domestic water consumption in addition to an infiltration of 10%.
o Based on the general wastewater generation pattern, the quantity of
wastewater generated in domestic premises is presented in Table No. 46.
o Wastewater generated from toilets is considered as sewage and wastewater

generated from bath / shower, laundry, hand basin and kitchen is
considered as sullage (grey water).
o The wastewater generation pattern is depicted in Table No. 47.
o The estimation of average daily sewage and sullage generation is detailed in
Table No. 48.
o Treated sewage water available @ 90% = 2018.47 cum/day
o Non potable water demand = 355.71 cum/day
o Balance treated sewage water to be discharged as non-potable water =
1662.76 cum/day
o Following design criteria is proposed for sewerage, treated effluent
collection system
 Demand computed based on the analysis.
 Working hours per day - 24
 Pipe material - NP2 RCC for all areas except road crossing and NP3
RCC for road crossing
 Pipe roughness coefficient - 0.011
 Peak flow factor - 3
 Formula used to calculate friction loss - Manning’s
 Infiltration - 10%
 Self-cleansing velocity - 0.6 m/s
 Minimum cover - 1 m
 Manhole spacing – 30 m up to pipe size 900 mm
o It is presumed that each industry will treat their effluent into sewage
standards prior to discharge into the sewerage network.
o It is proposed to collect treated effluent, sewage & sullage through a single
collection network which is planned based on the above design criteria.
Sewerage network shall be established by the project implementation
company considering the topography of the site.
o The network is divided into trunk main and sub mains according to the
natural topography and other site constraints. Minimum pipe size of 150
mm is considered for sewerage network.
o Proposed pipe size of sewerage network is provided in Table No. 49.
o In general, the quality of domestic sewage generation shall be as per Table
No. 50.
o However, this is based on the condition that occupant units treat industrial
trade effluent to required level of pre-treatment before discharging to
 Quality of sewage
common system
o The design and treatment scheme has been worked out based on this
assumption of input quality. It is proposed to treat both sewage & sullage in
a single treatment system.
 Sewage treatment o Sewage treatment is the process of removing contaminants from
plant (STP) wastewater, comprising of storm run-off, domestic sewage and primary
considerations treated effluent. It includes physical, chemical and biological processes to
remove various contaminants.

o Various sewerage treatment systems considered for selection of treatment
system for EZ and are given in Table No. 51.
o Factors considered for selection of appropriate treatment system:
 Reliability
 Vector nuisance
 Area availability
 Power requirement
 Capital cost
 Operation & maintenance cost
o The above process technologies are analyzed in terms of the performance
and both capital and operating cost. Based on the above analysis
Sequencing Batch Reactor (SBR) system is proposed
o This system has been widely used for municipal and industrial wastewater
treatment applications to meet specific discharge requirements.
o SBR technology advantages/benefits
 Consistent high-quality, low nutrient level effluent
 Sewage treatment  Tolerates wide swings in flow and organic loading
plant technology  No clarifier required
selection  Better control over filamentous growth and settling problems
 Nutrient removal without chemicals - nitrification and de-
nitrification, phosphate removal
 The system can also work with sewage in flow of 20 to 30 percentage
of designed capacity due to presence of variable frequency drive (VFD)
o SBR system is a fill and draw activated sludge system. SBR process uses
high-efficiency oxygen transfer aeration equipment to satisfy the high-rate
oxygen consumption requirement at the beginning of the "fill" and
"aeration" cycles. SBR is efficient in carbonaceous pollutant removal, and is
easily modified to satisfy nutrient removal of nitrogen (N) and
phosphorous (P). Because the fill, aeration, settlement and draw take place
in the same reaction tank, SBR tank itself would serve as the clarifier. Refer
Figure 114 for process flow diagram.
o 2 numbers of sewage treatment plant of capacity 1.95 MLD & 0.29 MLD for
processing area and non-processing area respectively are proposed.
o SWM is one of the most essential services for maintaining the quality of life
in EZ and for ensuring better standards of health and sanitation.
o If properly collected at source, SWM would reduce a number of
downstream problems related to transportation and disposal of the same.
 Solid waste Solid waste (SW) generated in EZ can be broadly categorized as under:
management (SWM)  Industrial non-hazardous waste
 Industrial hazardous waste
 Domestic wastes: kitchen and wood waste, plastic, paper, floor
sweepings, etc.
 Road sweeping & sanitary waste: human waste, etc.
 Garden & agriculture waste, leaves, branches, plants etc.

 Roads/building construction waste: earth, asphalt, concrete, brick,
plaster, wood, glass, stones etc.
 E-Waste: Computer systems, peripheral equipment, mobile phone
sets, TVs, audio sets and also household appliances
 Hospital and biomedical waste
o The role of integrated SWM is to reduce the quantity of SW disposed of to
land by recovering materials and energy from SW as depicted in Figure
115.
o The generation rates of industries, logistics, commercial & residential areas
vary to such an extent that exact quantification of SW generation is not
feasible.
o However, an attempt has been made to quantify the municipal solid waste
(MSW) that may be generated from various zones of EZ.
 Industries – 370 Kg / hectare / day
 Utilities – 100 gms /per person / day
 Residential area – 400 gms / person / day has been considered
 Road – 10 kg / hectare / day is considered as street sweeping.
 Greenery – 30 kg / hectare / day is considered.
 Commercial – 125 gms / per person / day is considered
o Based on the above, MSW quantification has been carried out and depicted
in Table No. 52.
o Total estimated MSW quantity – 21.14 TPD
o Source segregation should be made mandatory and due care has to be
taken while planning the collection, transportation of waste within the site
area. Users will be required to segregate their waste in the following
categories and put in colour coded bins.
 Industrial non-hazardous waste
 Industrial hazardous waste
 Bio-degradable waste
 Non-biodegradable waste
 E-waste like parts of computer, floppies, monitor, cartridges, ribbons
etc.
 Construction debris, street sweepings etc.
 Hospital and biomedical waste
o From the above only bio-degradable waste can be treated in the SW
treatment facility
o The rate of MSW generation in the initial stages will be less than the
estimated quantity and hence during the initial stage, the MSW generation
rate can be considered as 50% of the estimated quantity.
o The entire MSW is planned to be collected and treated in the composting
plant within EZ and the rejects shall be disposed to suitable landfill outside
the EZ.
o Suitable area has been earmarked for development of composting plant
within EZ to handle the MSW generated.

o The system parameters are as follows:
 Transmission line - 33 kV
 Number of phases - 3
 System frequency - 50 Hz
 Consumer supply voltage 33 kV /11kV/415/240 volt
o As peak demand may vary for each facility in EZ, a diversity factor, which
relates peak demand to rated load demand or calculated demand, is utilized
in computation of maximum demand.
o A simultaneous factor of 40 - 70% is normally considered.
o Power losses generally occur in the distribution network depending upon
the type of conductors and equipment installed. As this is a complete loss
to the system, it is generally kept below 10% of the total load.
o Estimated power demand is depicted in Table No. 53.
 Power supply &
o Total estimated power demand is 19.80 MVA.
distribution
o Distribution substation is proposed in a strategic location. Individual
facilitation and all power reticulation are to be carried out at 11 kV.
o The advantage with reticulation at 11 kV is that it is the standard voltage
and therefore electrical reticulation equipment for 11 kV systems would be
readily available including spares.
o Distribution network is the main backbone of the reticulation system. It is
most essential that the network must deliver uninterrupted power, in right
quantity & quality to individual facilities continuously.
o Power can be distributed by a network of overhead lines or underground
cables.
o An overhead distribution system is adopted for much more flexible for
extension and for connection of new consumers and less expensive than an
underground cable system.
o Street lighting has been conceived in 2 different forms.
 Street lights for the road network
 Solar street lighting
o All the road and streets are provided with street lighting not only to assist
 Street lighting
pedestrians and traffic, but also to increase safety and security in the area.
It is recommended that all lighting should be by high-pressure sodium
lanterns mounted on power poles or on streetlight columns. For major
roads the average illumination should be about 20 lux.
o All telecommunication services are expected to be provided through the
concerned MDAs and other private operators.
 Telecommunication o Value added telecom services are covered in infrastructure and internal
communications for the users are not covered under the general
infrastructure.
o This includes works associated with the landscaping within the EZ covering
 Landscaping
tree strips along the boundary, roads, public greenery etc.
 Specialized o It is also envisaged to provide the specialized infrastructure within EZ
infrastructure catering to the specific requirements of the occupant units. This would
include
 R&D hub
 Innovation centre and knowledge hub
 Ware houses
 Training centre
 QA & QC lab
 Administrative building etc.
 Environmental o The aspects of environmental sustainability considered while carrying out
sustainability the designing activities are enunciated in the following Figure 116.
Figure 87 – Detailing of EZ infrastructure
Table 29: Hierarchy of roads
Length (m)
Road Carriage
Non
Category width way width Number of lanes Processing
processing Total
(m) (m) area
area
Arterial road 24 5.5 + 5.5 2 lanes two way (with 2.0 1139 1139
m centre median)
Primary road 18 3.75 + 3.75 Single lane two way (with 2717 2717
1.20 m centre median)
Secondary road-1 15 3.75 + 3.75 Two lanes 2139 2139
Local street 9 2.75 + 2.75 Multiple lane 402 402
Total 5995 402 6397
Source: MACE analysis
Table 30: Composition of flexible pavement structure
Layer Composition details

Wearing course Bituminous concrete of 40 mm thick laid with mechanical spreaders
Binding coat A tack coat of 0.25 kg / sq. m. of 60/70 grade bitumen
Binder course Dense bituminous macadam (DBM) 100 mm thick in 2 layers, laid with mechanical
spreaders
Binding coat A prime and tack coat of 1.5 kg / sq. m of 60/70 grade bitumen
Base course Wet mix macadam (WMM) 250 mm thick in 2 layers
Sub-base 460 mm thick granular sub base in 3 layers to a soaked CBR of min. 30%
Sub-grade Min. soaked CBR value of 2%
Table 31: Water demand estimation norms
Reference – published standards, guidelines and best

Description
industry norms
Food processing 70 cum / ha / day - process water demand
Apparel, RMG & light engineering 36 cum / ha / day - process water demand
Warehouse 45 litres per capita - offices

Utilities 45 litres per capita
Amenities (processing) 36 cum / ha / day
Road 1.8 cum / ha / day
Green 1.8 cum / ha / day
Non processing area
Description Reference – published standards, guidelines and best industry norms
Residential 135 litres per capita
Commercial 15 litres per capita
Utilities 45 litres per capita
Schools 45 litres per capita
Road 1.8 cum / ha / day
Green 1.8 cum / ha / day
Source: MACE analysis, published standards, guidelines and best industry norms
Table 32: Water consumption pattern
For areas with bathing facilities

Potable water 70%
Non potable water 30%
For areas without bathing facilities
Potable water 45%
Non potable water 55%
Table 33: Water demand
Non
Processing
S.no. Description processing Total Unit
area
area
1 Total average demand 2945 359 3304 cum/day
2 Total potable water demand 2713 235 2948 cum/day
3 Total non-potable water demand 232 124 356 cum/day
4 Fire demand 114 7 121 Cum
Table 34: Estimation of average daily water demand
Population
Proposed Process Domestic Loss @ Non-
Sl. No Description Acres Density/Sft/ Population Total Potable
FSI water Water 10Percentage Potable
person
Processing area
1 Food processing 37.05 1.00 800 2016 1049.93 90.72 114.07 1254.72 1209.81 44.91
2 Apparel /RMG 70.27 1.00 800 3825 1024.21 172.13 119.63 1315.96 1230.76 85.20
3 Light engineering 12.34 1.00 800 672 179.84 30.24 21.01 231.08 216.12 14.97
4 1.00 800
5 Warehouse 2.32 1.00 800 126 5.67 0.57 6.24 3.43 2.81
Truck lay bay 3.78 1.00 800 206 9.27 0.93 10.20 5.61 4.59
Q.A & Q.C lab 2.82 1.00 800 153 6.89 0.69 7.57 4.17 3.41
6 R&D facility 3.15 1.00 800 172 7.74 0.77 8.51 4.68 3.83
Training center 2.57 1.00 800 140 6.30 0.63 6.93 3.81 3.12
7 Public amenities 3.79 1.00 55.19 5.52 60.71 33.39 27.32
8 Utility 4.96 1.00 40.00 1.80 0.18 1.98 1.09 0.89
9 Road 26.77 1.00 19.51 1.95 21.46 21.46
10 Green & open space 24.10 1.00 17.56 1.76 19.32 19.32
Total processing area 193.91 7350.00 2253.97 423.01 267.70 2944.68 2712.86 231.82
Non processing area
11 Commercial - Entrance plaza, 4.19 2.00 150.00 3009 45.14 4.51 49.65 27.31 22.34
admin block & Retail
12 Residential, Guest house & 3.26 1.50 200.00 1751 236.39 23.64 260.02 182.02 78.01
investors club
13 School 0.44 476 21.42 2.14 23.56 12.96 10.60
14 Places of worship 0.39 476 21.42 2.14 23.56 12.96 10.60
15 Road 0.89 0.65 0.07 0.72 0.72
16 Greenery and open space 2.02 1.48 0.15 1.62 1.62
Total non-processing area 11.19 5712.00 326.49 32.65 359.14 235.24 123.89
Total 205.10 13062.00 2253.97 749.49 300.35 3303.82 2948.11 355.71
Table 35: Underground sump storage capacity
S. no. Description Processing area Non processing area Unit

1 Potable water 2713 235 cum
2 Non potable water including 346 130 cum
fire demand
Total 3059 365 cum
Table 36: Overhead tank storage capacity
S. no. Description Processing area Non processing area Unit

1 Potable water 226 20 cum
2 Non potable water 19 10 cum
Total 245 30 cum
Table 37: Pipe sizing for processing area
Length in m
Pipe size in mm
Potable water Non potable water
110 5426 10851
140 1628
160 1085
200 1085
250 1085
300 543
Total 10851 10851
Table 38: Pipe sizing for non-processing area
Length in m
Pipe size in mm
Potable water Non potable water
40 402
50 241
63 80 402
90 40 281
110 40 120
Total 803 803
Table 39: Pump capacity
Description Processing Non Unit

area processing
area
Potable Capacity 0.06 0.01 cum/sec
water Number of pumps 2 W+1S 2 W+1S
Power requirement of each pump 15.00 1.00 Kw
Non Capacity 0.01 0.003 cum/sec
potable Number of pumps 2 W+1S 2 W+1S
water Power requirement of each pump 1.00 1.00 Kw
Table 40: Waste water generation pattern
Description Percentage
Bath / shower & laundry 55.97%
Hand basin, kitchen 12.29%
Toilet 31.74%
Table 41: Sewage and sullage generation pattern
For areas without bathing and washing facility

Sewage = 72.09%
Grey water = 27.91%
Gardening = 19.53%
Cleaning = 8.37%
For areas with bathing and washing facility
Sewage = 31.74%
Grey water = 68.26%
Gardening = 47.78%
Cleaning = 20.48%
Table 42: Sewage and sullage generation estimation
Sl. No Land use pattern Total Water demand Effluent Sewage Sullage Total effluent, Infiltration Total
area generation generation generation sewage and @10% sewage
Acres Process Domestic Potable Non- in cum /day In cum In cum sullage quantity
water Water Potable /day /day generation
Processing area
1 Food processing 37.05 1049.93 90.72 1209.81 44.91 524.97 32.37 135.13 692.47 125.471 817.94
2 Apparel /RMG 70.27 1024.21 172.13 1230.76 85.20 512.10 61.42 180.15 753.68 131.60 885.28
3 Light engineering 12.34 179.84 30.24 216.12 14.97 89.92 10.79 31.64 132.35 23.11 155.46
4 Warehouse 2.32 5.67 3.43 2.81
5 Truck lay bay 3.78 9.27 5.61 4.59
Q.A & Q.C lab 2.82 6.89 4.17 3.41 - 2.46 3.98 6.44 0.76 7.19
6 R&D facility 3.15 7.74 4.68 3.83
Training center 2.57 6.30 3.81 3.12 - 2.25 3.64 5.89 0.69 6.58
7 Public amenities 3.79 55.19 33.39 27.32 - 19.69 31.90 51.59 6.07 57.66
8 Utility 4.96 1.80 1.09 0.89
9 Road 26.77 19.51 21.46
10 Green & open space 24.10 17.56 19.32 - 13.93 3.96 17.88 1.93 19.81
Total processing area 193.91 2181.36 423.01 2632.99 231.82 1090.68 142.91 384.68 1618.27 281.64 1899.92
Non processing area
11 Commercial - Entrance plaza, 4.19 45.14 27.31 22.34 - 16.11 26.09 42.19 4.96 47.16
admin block & Retail
12 Residential, Guest house & 3.26 236.39 182.02 78.01 - 24.76 149.90 174.66 26.00 200.67
investors club
13 School 0.44 21.42 12.96 10.60 - 7.64 12.38 20.02 2.36 22.38
14 Places of worship 0.39 21.42 12.96 10.60 - 7.64 12.38 20.02 2.36 22.38
15 Road 0.89 0.65 0.72 - - 0.07 0.07
16 Greenery and open space 2.02 1.48 1.62 - - 0.16 0.16
Total non-processing area 11.19 326.49 235.24 123.89 56.15 200.75 256.90 35.91 292.81
Total 205.10 2253.97 749.49 2948.11 355.71 1126.99 199.06 591.15 1917.20 325.54 2242.74
Table 43: Pipe size- sewerage network
Pipe size in Processing area Non processing

mm length in m area length in m
150 4197 322
200 1199 80
300 600
400
Total 5996 402
Table 44: Sewage quality
S. no. Parameters Unit Concentration

1 PH - 5.5 – 9.0
2 Suspended solids Mg/l 300– 600
3 Biochemical oxygen demand Mg/l 250 – 350
4 Chemical oxygen demand mg /l 400 – 600
5 Oil & grease mg /l <20
Table 45: STP- process and components
S.
Process Units required Accessories
no.
1 Activated sludge – Aeration tank & secondary Surface aerators or membrane
extended aeration clarifier diffuser system for oxygen supply
2 Aerated lagoon Earthen bund basins Fixed or floating aerators for oxygen
supply
3 Up-flow Anaerobic Sludge Reactor with liquid, solid & gas Gas collector, burner and influent
Blanket (UASB) separation facilities distribution system
4 Trickling filters Circular tanks with media, under Rotary distributor for influent and re-
drain & secondary clarifier circulation pumps
5 Rotating Biological Trough with PVC/plastic discs, Drive mechanism for rotating the
Contactors (RBC) secondary clarifier discs
6 Fluidized aerobic bio Reactor tank with poly propylene Blowers for supply of oxygen through
reactor media and diffusers followed by membrane diffusers
secondary clarifier
7 Sequencing Batch Reactor It uses deep RCC basins, and very Diffusers, blowers and aeration grid,
(SBR) efficient oxygen transfer which provides highest aeration and
equipment’s (diffused aeration oxygen transfer efficiency. Decanter
mechanism) assembly in Stainless steel equipped
with variable frequency drive to
automatically control rate of
decanting based on input feed
condition
8 Membrane Bio Reactor Aeration tanks followed by Diffusers, blowers to supply oxygen,
(MBR) balancing tank and membrane bio air compressors for backwashing,
reactor chemical dosing for pre-treatment.

Figure 88 – STP process flow diagram (SBR technology)

Figure 89 – Waste reduction by integrated SWM
Table 46: Estimation of MSW generation
Land use pattern Acres Population MSW Unit Kg/day

generation
Processing area
Food processing 37.05 370.5 kg/ha/day 5557.13
Apparel /RMG 70.27 370.5 kg/ha/day 10540.79
Light engineering 12.34 370.5 kg/ha/day 1850.82
Warehouse 2.32 370.5 kg/ha/day 347.53
Truck lay bay 3.78 370.5 kg/ha/day 567.33
Q.A & Q.C lab 2.82 100 kg/ha/day 114.08
R&D facility 3.15 100 kg/ha/day 127.66
Training center 2.57 100 kg/ha/day 103.90
Public amenities 3.79 100 kg/ha/day 153.30
Utility 4.96 100 kg/ha/day 200.71
Road 26.77 10.12 kg/ha/day 109.69
Green & open space 24.10 30.36 kg/ha/day 296.26
Total processing area 193.91 19969.21
Non processing area
Commercial 4.19 3009 125 gm/capita/day 376.13
Residential 3.26 1751 400 gm/capita/day 700.40
School 0.44 476 100 gm/capita/day 47.60
Places of worship 0.39 476 100 kg/ha/day 15.66
Road 0.89 10.12 kg/ha/day 3.66
Greenery and open space 2.02 30.36 kg/ha/day 24.89
Total non-processing area 11.19 5712 1168.33
Total 205.10 5712 21137.55
Table 47: Estimation of power demand
Land use pattern Total area Load in Plot Simultaneously Loss Load in
hectares KVA/Ha area factor factor kVA
&
KVA/Sqm
of BUA
Processing area
Industrial area
Food processing 15.00 300.00 50% 70% 1.10 4675.64
Apparel /RMG 28.45 250.00 50% 70% 1.10 7773.44
Light engineering 5.00 350.00 50% 70% 1.10 1749.57
Warehouse 2.32 239.20 40% 50% 1.10 454.44
Truck lay bay 1.53 239.20 30% 50% 1.10 275.62
Q.A & Q.C lab 1.14 239.20 40% 50% 1.10 223.76
R&D facility 1.28 239.20 50% 50% 1.10 271.01
Training center 1.04 239.20 40% 50% 1.10 54.68
Public amenities 1.53 478.40 30% 50% 1.10 121.01
Utility 2.01 478.40 20% 40% 1.10 84.50
Road 10.84 239.20 10% 40% 1.10 114.06
Green & open space 9.76 119.60 10% 40% 1.10 51.34
Total processing area 78.50 15.85

Non processing area
Commercial 1.70 0.18 60% 70% 1.10 2815.10
(*), (**)
Residential 1.32 0.14 60% 60% 1.10 1123.50
(*), (**)
Polyclinic (*) 0.14 40% 40% 1.10
School 0.18 179.40 30% 40% 1.10 4.20
Places of worship 0.16 119.60 30% 40% 1.10 2.47
Utilities 478.40 20% 40% 1.10
Road 0.36 239.20 10% 40% 1.10 3.81
Greenery and open space 0.82 119.60 10% 40% 1.10 4.31
Total non-processing area 4.53 3.95
Total 83.04 19.80
(*) FSI – commercial - 2.00 (**) Sq.m. – commercial - 33964.79

FSI – residential - 1.50 Sq.m. – residential - 19768.11
FSI – polyclinic - 1.00
• Minimum usage
• Potable and non potable supply
Water • Rain water harvesting
• Treated sewage used as non potable water

Sewage • Minimum discharge
• Minimum usage
• Solar /conventional street lights
Power • Loss reduction
• Improvement of power factor
• Minimum 10% of the total area

• Adequate circulation and green belt corridors which include pedestrian walkways, approach roads for activity zones as
Greenery well as service corridors, green belt, plantation schemes, path ways, public gardens
• Green building concept

Energy • Natural lighting during day time
efficient
• Utilisation of local construction materials

• Increasing local employment
Others • Switch to recycled paper & e-procurement
Figure 90 – Environmental Sustainability

4.5.3. Detailing of Offsite Infrastructure

For sustained business operation of EZ, it is pertinent that off-site infrastructure and EZ connectivity to the
proposed sectors are adequately addressed. The study areas covered are depicted in the Figure 117 & Figure 118.
Site grading
Access road to EZ
Bridge to cross Ghona river
Power supply to EZ
Water supply to EZ
Boundary wall
Administrative building
Figure 91 – Offsite infrastructure and connectivity to EZ
Figure 92 – Offsite infrastructure details

4.5.3.1. Site Grading

Already 65% of site is filled with dredged sand upto 1.8 m height. Remaining area of about 70 acres filling upto
1.8 m height from NGL is proposed to be developed through separate contractor. The detailing and tender for
the same has been prepared and bid process is in progress.
4.5.3.2. Access Road and Bridge to Economic Zone

It is planned to widen and augment the existing approach road from Mongla port road to proposed EZ for a
length of 350 m and 36m length 15m wide bridge to cross the Ghona river in order to provide easy access to the
proposed EZ. The detailing and tender for the same has been prepared and bid process is in progress. The
alignment of the proposed road and its cross section is depicted in Figure 119.
Figure 93 – Details of access road and Bridge

4.5.3.3. Power Supply to Economic Zone
It is planned to build a new 33 kV dedicated power transmission line from Mongla substation to EZ site for
catering to the needs of industries occupying the EZ along with 33/11 KV substation with in EZ. The detailing
and tender for the same has been prepared and bid process is in progress. The alignment of the proposed power
transmission line and the typical details of substation are depicted in Figure 120.
Figure 94 – Details of external power supply system

4.5.3.4. Water Supply to Economic Zone
It is planned to build three new bore wells cum pumping stations at village Foyla to draw the ground water
along with pumping main length of 22km to the proposed EZ. It is also planned to construct an underground
service reservoir to store the water within EZ. The detailing and tender for the same has been prepared and bid
process is in progress. The details of water supply system are depicted in Figure 121.
Figure 95 – Details of external water supply system
4.5.3.5. Boundary Wall

It is planned to construct a boundary wall as indicated earlier for a length of 4000 m. The detailing and tender
for the same has been prepared and bid process is in progress. The details of boundary wall are depicted in
Figure 122.
Figure 96 – Details of boundary wall
4.5.3.6. Administration Building

It is planned to construct an administrative building consisting of 1680 sqm of built-up area, G+ 2 structures
within the EZ. The detailing and tender for the same has been prepared and bid process is in progress. The
details of proposed administrative building are depicted in Figure 123 and 124.
Figure 97 – 3D Perspective view of administrative building

Figure 98 – Details of Administrative building

5. Social Impact Assessment

5.1. Assessment of Social Impacts
5.1.1. Objective of Social Impact Assessment (SIA) Study
The commissioning of EZ is not expected to have significant adverse impact on the social life of the local people.
Though, SIA is not mandatory as the impact is expected tobe minimal, the team has carried out a SIA study to
capture any present or future impact of EZ development in the region. Accordingly it has analysed the
magnitude of social impact of the various EZ activities on the local community during construction, operation
and commissioning phases. Further, appropriate mitigation measures have been proposed for any significant
social effects/risks that may arise from the commissioning of the EZ. This assessment has been done based on
(i) Household survey of the PAPs, (ii) Secondary information available through a wide range of resources and
(iii)various discussions & consultations undertaken with the government officials, elected representatives and
local communities.
The specific objectives of the study were:
 Identification of the socio-economic characteristics and the possible impacts of EZ on the PAPs;
 Identification of the existing socio economic conditions of the area where the EZ is to be established
and to analyse the possible social impact;
 Conduct public consultations with relevant stakeholders taking into consideration gender related
aspects;
 Verify compliance with GoB’s Regulations and Policies and World Bank’s Social Safeguard Policies
for Resettlement and Rehabilitation’; and
 Preparation of an Abbreviated Resettlement Action Plan(ARAP) for the PAPs based on the SIA;
5.1.2. Study Methodology and Approach

The SIA report and ARAP have been prepared to fulfil the Social Safeguard Policies of Government of
Bangladesh (GoB) and the World Bank. While this has been guided by the rules of these two entities, the SIA
study is based largely on discussions and consultations with the concerned government officials at Burirdanga
Union Parishad (UP), Mongla Port Pourashava, Mongla UNO Office and the stakeholders of the proposed EZ
area (such as the PAPs, local communities, boat associations etc.) Desk research and literature review
supplement the findings of the consultative mechanisms on the aspects highlighted above. The overall approach
and methodology adopted for SIA is depicted below:
ARAP
Preparation
Data
Consultations Analysis &
Assessment
Data
Collection
Field visit
Figure 99: Methodology and Approach for SIA study

5.1.3. Socio economic conditions of the people and the project areas
The primary study area for SIA consists of Burirdanga Union Parishad (UP), where the EZ is located. However,
keeping in view the direct/indirect impact of EZ on the nearby areas, the study area has been extended to
Mongla Port Pourashava, which is the nearest urban centre.
The total population in Burirdanga UP is 12,097, which is 0.81% of the total district population while the
corresponding population figure in Mongla Port Pourashava is 39,837 or 2.7% of the total district population.
Population density per sq. km is low in Burirdanga UP (428 persons per sq. km.), while it is high in Mongla
Port Pourashava (2,050 persons per sq. km.). The 2011 Census data revealed a negative growth rate in
Burirdanga UP and Mongla Port Pourashava when compared to 2001 census data. In Burirdanga UP, the
growth rate is -10.1%, while in Mongla it is -29.79 %.
The majority of the population in Burirdanga UP is constituted of Hindu (55.3 %), followed by Muslim (43.4 %),
Christian (1.2 %) and Buddhist (0.006 %). In Mongla, Muslim population is the majority (88.57 %) followed by
Hindu (7.03 %), Christian (4.35 %) and Buddhist (0.4 %). The floating population in Mongla Port Pourashava is
3.96 % of the total households while there is no floating population in Burirdanga UP. There are no indigenous
people (tribal or ethnic minority) within these areas.
In Burirdanga UP and Mongla Port Pourashava, majority of the population belongs to the employable age
group, which could be beneficial for fuelling the economic growth of the local area.
A review of the housing pattern shows that 85% people in Burirdanga UP and 56.9 % people in Mongla Port
Pourashava have kutcha houses which indicates their low social and economic status. The kutcha houses are
vulnerable and increase the risk to life in the event of climatic hazards such as floods or cyclones.
The female literacy rate (62.3%) in Mongla Port Pourashava is almost equal to male literacy rate (65.5%), while
the difference in Burirdanga UP is high (Male literacy: 72.8 % and female literacy: 58.7 % ). The higher literacy
rate indicates that the employable resources are available in the region- and this is an important aspect for
development of the EZ.
Non agriculture sector is the major source of employment providing employment to around 46% of the
population (23% as day laborers and remaining 23% as self employed). Agricultural sector on the other hand
accounts for 35% employment, while 11% comes from service sector.
Others,
8.00%
Services, 11%
Non Agriculture,
46%
Agriculture, 35%
Figure 100 – Source of employment

The working age population in Bagerhat district is 1.11 million (around 75% of the total population). Of this,
males and females roughly have equal share. However, if one considers the economically active population (i.e.
the population that is actually working), the ratio is highly skewed towards male population. Of the
economically active population, around 70% comprise of males. Further, at an overall level, the work force
participation (w.r.t. the working age population) is also observed to be low, at 57%, as compared to the national
level statistics of 59%. The work force participation of males is 80% vis-à-vis female participation (w.r.t. female
population) at 34%.
Thus, the commissioning of EZ could be act as a facilitator to reduce the gap in economically active population
and Work Force Participation to a great extent.
On the infrastructure front, in terms of basic services, scarcity of safe drinking water is an acute problem, with
tap water available to only 24.4% population in Burirdanga UP and 23.1% population in Mongla Port
Paurashavas. Percentage of population using tube well is almost close to that using tap water. Majority of the
population (75.5 % in Burirdanga UP & 76.5 % in Mongla Port Paurashavas) use other sources for drinking
water such as ponds.
Transport is a major problem in the project area. Public transport is almost non-existent in Burirdanga UP &
Mongla Port Paurashavas. Rickshaws, vans, easy bikes and auto-rickshaws are used for local transport. There is
no road access to the Mongla main city from the EZ area and people depend on boat services. Planning and
implementation of public transport system will be a major challenge for Burirdanga UP & Mongla Port
Paurashavas when the EZ is operational.
5.1.4. Potential social impacts

Potential Negative Impacts Potential Positive impacts Mitigation measures
 The livelihoods of the eight  The commissioning of Mongla  To rehabilitate the 8 small
leaseholders having small EZ will directly improve the business units as per the rules
business /dwelling units on the local economy of the area of GoB and WB
proposed approach road will be which in turn will increase the  Need to develop a long term
affected and relocation is purchasing power of the local development plan for the area
required for these affected population. to improve the quality of basic
people  Around 65.2% of the amenities for the increasing
 Possibility of demographic employable population in population in the coming years
changes due to significant Burirdanga UP and Mongla  Equal employment
migration Port Pourashava will have opportunities should be given
 The unskilled local community access to better employment to women, especially those
may feel unhappy if preferential opportunities during the who are now unemployed or
treatment is given to the people construction and are working in the service
outside Burirdanga UP and commissioning phases of sector as daily wage workers
Mongla Porashava for skilled Mongla EZ  Measures should be taken to
jobs.  Enhanced employability for prohibit child labour in the EZ
 There will be an increase in the the women in the area as per the National Child
demand for temporary  The in- migration of labour Labour Elimination Policy
accommodation, housing and will also boost the tourism 2010 of Ministry of Labour
basic services including sector in Mongla area where and employment
sanitation, health and Sunderban is a major  Care should be taken to
emergency services in attraction promote women advancement
Burirdanga UP and Mongla Port and to ensure that women are
Pourashava areas. not confined to low-skill, low-
 Increased population inflow may paid and low-prospect jobs.
occur in Mongla city as the The EZ enterprises should
Potential Negative Impacts Potential Positive impacts Mitigation measures
workers and employees will tend undertake special efforts to

to settle in the city due to the ensure that women workers
availability of infrastructure are not discriminated against
facilities. equal wages for work of equal
 The high rate of poverty in the value.
area may lead to the child labour
deployment
 The absence of gender inclusive
policies and procedures may
lead the women to take up
unskilled and low skilled jobs.
5.1.5. Institutional, Legal and Policy Framework

The relevant policies and legislations of GoB and WB that address the resettlement of affected people are:
a. The Acquisition and Requisition of Immovable Property Ordinance 1982 and subsequent
amendments in 1994, 1995 , 2004 and 2011, GoB : The owners affected by the acquisition will be
eligible to receive compensation for the following:
i. Land permanently acquired (including standing crops, trees, houses); and
ii. Any other impact and damages caused by such acquisition.
In accordance with the Ordinance, the DC of the concerned district is the sole authority to acquire land if it
appears to him that the property is needed for a public purpose or the public interest. However, the Ordinance
has made provisions for people to object to the decision. Compensation payments must be made before the
authorities take possession of the property, and the payments should be made within a period of one year from
the date of the decision of acquisition. The 1982 Ordinance, however, does not cover the Project
Affected Persons (PAPs), such as informal settlers/squatters, persons without titles or
ownership records. Further, the compensation paid does not consider the market or replacement cost of the
property acquired.
b. Safeguard Policies of the World Bank(WB)

The Social Safeguard Policy of the WB on resettlement of PAPs is under OP 4.12- Requirements for Involuntary
Resettlement. The policy states that all occupants of an area who need to be displaced are eligible for assistance
that permits them to replace lost assets, recover their living standards and incomes to a level at least as per the
pre-project state. This is irrespective of whether they are formal occupants (those with land titles) or otherwise.
The policy does not cover occupants who would come to occupy after the “cut of date”. This means that the
Bank policy (OP 4.12) does not cover those who would later come to a land or an area around the project area in
order to take advantage of compensatory assistances being offered to those have been living/using the place, up
to the period of PAP census/survey.
The eligibility criteria set for the displaced persons to be entitled for compensation for loss of land or other
assets taken for project purposes are:
I. Those who have formal legal rights to land or other assets (including customary and traditional
rights recognized under the law of the country): and
II. Those who do not have formal legal rights to land or other assets at the time of Census but have a
claim to such legal rights, provided that such claims are recognized by the laws of the country or
are recognized through a process identified in the resettlement plan. The absence of legal title to
land or other assets is not, in itself, a bar to compensation for lost assets or other resettlement
assistance. Displaced persons in these two groups are also entitled to compensation for loss of
other assets such as structures and crops, and to other resettlement assistance.
III. The third group of displaced persons are those who have no recognizable legal right or claim to the
land they are occupying and hence are not entitled to compensation for loss of land under this
policy. However they are entitled to resettlement assistance in lieu of compensation for land, as
necessary, to achieve the objectives set out in this policy, if they occupy the project area prior to a
cut-off date established by the Borrower and acceptable to the Bank. All such displaced persons
are entitled to compensation for loss of assets other than land, in particular, structures and crops.
Gaps between Acquisition and Requisition of Immovable Property Ordinance 1982 and OP 4.12-
Requirements for Involuntary Resettlement, the World Bank
The major gaps identified in the two polices are outlined below:
i. The Ordinance does not cover PAPs without titles or ownership record, such as informal
settler/squatters, occupiers, and informal tenants and lease-holders (without document) and does not
ensure replacement value of the property acquired.
ii. Under the ordinance, a person who appears in the land administration records as an owner or who has
legal title is eligible for compensation. However, all affected parties, including squatters and illegal
occupants are eligible for compensation under OP 4.12.
iii. The Ordinance has provisions for the compensation for lands and fixed assets, but there is no provision
to assess loss of income and the livelihood of PAPs, and no mitigation measures to regain income and
livelihood.
iv. Under the Ordinance, the compensation is calculated based on market values of the land over the
previous 12 months; meanwhile the OP4.12 has made provisions to calculate the compensation at
replacement cost at current market price.
The World Bank Policy will apply where there are gaps between Acquisition and Requisition of Immovable
Property Ordinance 1982 and subsequent amendments in 1994, 1995, 2004 and 2011 and the World Bank
Policy (OP 4.12), on compensation of PAPs.
5.2. Abbreviated Resettlement Action Plan (ARAP)

5.2.1. Project Affected People
The PAPs of Mongla EZ comprise of eight families having small business/dwelling units in a temporary
(movable) structure on the side of the approach road to EZ. The approach road and the nearby areas belong to
Mongla Port Authority. The Port Authority has given permission to these families to use the land on lease (by
paying an annual rent of BDT. 4.05/sq. gauge to the authority) for business purpose with a clause to vacate
these families by giving one month’s notice. The widening of the approach road from 20 ft. to 50 ft. has
triggered the need for the relocation of these small business units.
Though, the land has been given to the eight small business /dwelling units on lease to run small businesses,
the family members are also staying in the allotted areas. Out of the total eight temporary houses, seven houses
are occupied and the remaining one is vacant. Three families are engaged in log selling and three are employed
in service sector. The remaining two houses are rented out by the lessee to a motor repairing person or unit and
a tailoring shop. The tenant of the tailoring shop has vacated the house and presently the house is vacant. The
total population of 53 people comprises of 25 male, 20 females and eight children.
5.2.2. Options for Rehabilitation od PAPs

Two options have been considered for the rehabilitation of the PAPs. Option 1 suggested that the business
/dwelling units of the PAPs may be moved 30 feet backwards from their current location . The PAPs will be
given financial assistance to shifting their movable business units from the existing location. However,
moving backward of the eight business/dwelling units to 30 feet will result in the displacement
of farmers who have been cultivating the land behind the eight business/dwelling units. Option 2
is to shift the business /dwelling units to the vacant land available on the right side of the approach road, near
the market, which also belongs to the Port Authority. Shifting of eight business/dwelling units to this land does
not involve any further displacement of farmers or houses. Hence, it is recommended that BEZA may
adopt this option to reduce the complications of further displacements. Hence, it is recommended
that BEZA may adopt this option to reduce the complications of further displacements. The land required for
the relocation of PAPs has been estimated around 0.1 acre.
5.2.3. Valuation procedure

The valuation for dismantling and construction of the eight business/dwelling units has been calculated based
on the following aspects:
i. Dismantling: Labour cost of two laborers (one main worker and one helper) for dismantling the
business/dwelling units. It was estimated that 5 days shall be required for dismantling an area of more
than 500 sq.ft and 4 days shall be required for an area of less than 500 sq.ft36.
ii. Reconstruction:
a. Cost for roof of thatched houses: Cost of material (gol pata) per Sq.ft. : BDT 56.25 per sq. ft.
b. Cost for wall: Cost of material (bamboo sheet)) per Sq.ft: BDT 15 per sq. ft.
c. Cost for cement floor: As per PwD rates, and
d. Cost of labour: As per item(i) above
5.2.4. Budget for the Implementation of ARAP

A provisional budget estimate has been prepared for the resettlement of the eight PAPs. This includes the cost
for dismantling the business/dwelling units and the cost for reconstructing the units. The total estimated
budget for resettlement is BDT. 0.392 M. The break up of budget estimation is given in the table below.
Table 48: Break up of Budget Estimation
Area of the Cost for Cost for rebuilding (In BDT-Million) Grant Total
business dismantling cost(BDT-
units(Sq.ft.) the house( In Million)
BDT-Million)
Labor cost Labor Cost of Cost for Cost for Total for
cost Roofing floor(B wall rebuildin
(BDT) (BDT/sq. DT)** (BDT) g (BDT)
)
4448 0.072 0.072 0.124 0.045 0.078 0.319 0.392*
*Rounded off to 0.392
The cost estimated for the resettlement of PAPs is based on the actual market price and this includes the cost
for relocating the business units only. Since, the relocation site suggested is very near to the existing dwelling
units (approximately 60 ft. from the existing units) and PAPs can continue their livelihood activities till the
completion of the construction of new business units, support for livelihood assistance has not been suggested
in the ARAP.
Please refer Annexure 9.5 for detailed breakup of this cost.
36
The labour cost is estimated at BDT 1000.00 for 2 labourers (BDT 600.00 for main worker and BDT 400.00 for helper).
Total cost is estimated based on the total number of days required * BDT.1000.
5.2.5. Grievances Redressal Mechanism
The grievance mechanism suggested for the relocation of PAPs in Mongla EZ is as follows:
i. Grievance Mechanism at Local Level: At the local level, a group will be formed comprising of the
Chairman, Burirdanga UP; a representative from PAPs and a representative from BEZA,(preferably, the
Social Development Officer). If the PAPs have concerns about the relocation arrangements, the
aggrieved person will initially address his/her case to this group.
ii. Grievance Redressal Committee (GRC) at BEZA Level: If the grievance is not resolved at the local
level, the PAPs can escalate their grievance to the Grievance Redressal Committee (GRC) to be set up by
BEZA to deal with the grievances. The GRC may comprise of one representative from the concerned UPs,
one representative from the concerned DC Office, two representatives from World Bank and three
members from BEZA.
5.2.6. Monitoring of ARAP
The responsibility of monitoring of the implementation of ARAP will be of BEZA. The objectives of internal
monitoring will be (i) to verify that the valuation of assets lost or damaged, and the provision of compensation,
resettlement and other rehabilitation entitlements, has been carried out in accordance with the resettlement
policies provided by the GoB and , WB Policies and guidelines; (ii) to oversee that the ARAP is implemented as
designed and approved; (iii) to verify that funds for implementation of the RAP are provided for by the project
authorities in a timely manner and in amounts sufficient for their purposes, and that such funds are utilized in
accordance with the provisions of the ARAP.
Monitoring of the resettlement process will be undertaken by BEZA before the construction phase and will
continue till all the PAPs are resettled completely. This includes the serving of notices in a timely manner to
PAPs, to allow the business /dwelling units to vacate the place with a cut- off date prior to initiating
construction, reconstruction of business/dwelling units in the rehabilitation site and release of funds to the
PAPs.Implementation of the ARAP will be regularly supervised and monitored by the Social/Resettlement
Specialist of BEZA..
Based on such monitoring, the Resettlement Specialist will prepare the monthly progress report and will submit
it for the approval of the Project Director & the Executive Chairman, BEZA. The Project Director will forward
the approved monthly progress report to World Bank for their concurrence and approval.
6. Environment Assessment
This section highlights the expected impacts during the construction and operation phase of the Mongla EZ.
The impacts are as enumerated below.
Table 49: Environmental impact during Construction and Operational phase

During construction phase During operation phase
Ambient air quality: Air quality in the vicinity Air quality: During operational phase of the
of the project area is likely to be adversely project, the visiting vehicles would cause
affected, though temporarily, due to dust and emissions of SPM, SO2 and NOx thereby
exhaust gases generated by earth moving affecting air quality.
machinery and transport vehicles. Also other
operations like excavation, dredging, trenching
and back filling etc. would cause dust to be blown
around. The main sources of emission will be due
to the transportation, movement and operation of
construction equipment at site and fugitive dusts
from handling of cement, sand and stone chips,
etc.
Noise level: Noise will be produced during Noise level: Visiting vehicles may result in
construction phase on account of building activity increased noise levels
such as loading, unloading, erection and filling,
concreting, piling, drilling etc., vehicular traffic
plying in and out of the complex, use of
construction machinery and equipment such as
compressors and pumps.
Surface water quality: During construction, Water quality: Domestic wastewater if not
loose soils may find its way into runoff, thus treated properly can cause several health and
increasing suspended silt load in the runoff safety impacts including spread of disease
temporarily which in turn may increase the contamination of land/crops and drinking water.
suspended solids content of the nearby water The uncontrolled disposal of sewage and other
sources. Construction water generated from liquid wastes arising out of domestic and
construction personnel may affect the quality of industrial sources constitutes main causes of
surface water. water pollution.
Biological environment: The increase in Biological environment: The implementation
traffic and air pollution will have moderately of the project will not have any major adverse
adverse effect on the nearby floral composition. effect on the existing eco system and the
The project does not envisage any reserved forest proposed development of green belt, solid waste
land acquisition. However, an indirect impact on management facility, water treatment facility will
the Sunderbans needs to be studied and enhance the positive impacts on the biological
mitigation measures undertaken. environment. However, indirect impacts on the
Sunderbans shall be studied and mitigation
measures provided.
Impact due to solid waste : Construction Solid waste: Improper management of waste
activities leads to generation of sand, gravel, can become a health and environmental hazard to
concrete, stone, bricks, wood, metal, glass, the occupants and the surrounding areas.
polythene sheets, plastic, paper etc. as waste.
Various operations during the construction
activities lead to the varied compositions in the
total solid waste stream and affect the site.
During construction phase During operation phase

Construction camp: Lack of proper
infrastructure facilities, such as housing, water
supply and sanitation facilities may generate
substandard living conditions and health hazards.
Legislative Framework
Regulatory requirements towards protection and conservation of environment and natural resources have been
devised by GOB and the WB. These are enumerated below.
GoB Environmental Policy, Regulations, and Guidelines

National Environmental Policy, The policy sets out the basic framework for environmental action
1992 together with a set of broad sectoral guidelines to ensure
environmental sustainability during development.
National Environment The NEMAP has been developed with the objectives to: (i) identify
Management Action Plan, 1995 key environmental issues affecting Bangladesh, (ii) identify actions
to halt or reduce the rate of environmental degradation, (iii)
improve management of the natural environment, (iv) conserve
and protect habitats and bio-diversity, (v) to promote sustainable
development and (vi) improve the quality of life.
Environment Conservation Act, This Act authorizes the DoE to undertake any activity to conserve
1995 and enhance the quality of environment and to control, prevent
and mitigate pollution.
Environment Conservation The Environment Conservation Rules provide standards and
Rules, 1997 guidelines for : (i) Categorization of industries and development
projects on the basis of actual and anticipated pollution load, (ii)
Requirements for undertaking Initial Environmental Examination
(IEE) and Environmental Impact Assessment (EIA), as well as
formulating an Environmental Management Plan (EMP) according
to categories of industries/development projects/activities, (iii)
Procedure for obtaining environmental clearance and (iv)
Environmental quality standards for air, surface water,
groundwater, drinking water, industrial effluents, emissions, noise
and vehicular exhausts.
The EIA Guidelines for Industry, The EIA Guideline is a handbook for procedures for preparing the
1997 EIA and for reviewing them for the benefit of the development
partners, EIA Consultants, reviewers, and academics.
Relevant Other National Polices : National Legal Instruments : (i) Environment Court Act, 2000 and
subsequent amendments (ii) Environment Court Act, 2000
(iii)The National Water Policy, 1999 (iv) Protection, restoration
and enhancement of water resources, (v) Protection of water
quality, including strengthening regulations concerning
agrochemicals and industrial effluent, (vi) Sanitation and potable
water, (vii) Fish and fisheries and Participation of local
communities in all water sector development, (viii) The Brick
Burning (Control) Act, 1989, The Brick Burning (Control)
Amendment Act, 1992 and 2001 Ministry of Environment and
Forest, (ix) Control of brick burning (x) Water Supply and
Sanitation Act, 1996 Ministry of Local Government, Rural
GoB Environmental Policy, Regulations, and Guidelines

Development and Cooperatives, (xi) Management and Control of
water supply and sanitation in urban areas, (xii) Bangladesh
Labour Law, 2006 Ministry of Labour, (xiii) National Land use
Policy, 2001 Ministry of Land,
Environmental Health and Safety The Environmental Health and Safety (EHS) Guidelines of IFC are
Guidelines safeguard guidelines for environment, health and safety for
development of industrial projects. They contain performance
levels and measures that are considered to be achievable in new
facilities at reasonable costs using existing technologies.
World Bank Safeguard Policies

Environmental Assessment: The World Bank requires an Environmental Assessment (EA) for all
projects proposed for Bank financing to ensure that these projects are
environmentally sound and sustainable. The policy also requires that
the EA should be made available to the public by disclosure at public
libraries or other places accessible to project-affected groups, including
a Summary EA in the local language
Natural Habitats There are no designated conservation areas or nature reserves in the
project area. This policy indicates the requirements for conserving the
natural habitat.
Physical and Cultural The policy requires a proper management plan for unexpected chance
Resources finds during implementation of the project.
Involuntary Resettlement This policy aims to minimize resettlement while offering adequate
compensation or settlement alternatives in conformity with World Bank
policies and Bangladesh law.
Indigenous People This policy aims to ensure that indigenous or tribal peoples are not
adversely affected and are given opportunities to benefit from World
Bank financed projects in a culturally appropriate way.
Environmental Health and The EHS Guidelines contain performance levels and measures for
Safety (EHS) Guidelines development of projects that are considered to be achievable in new
facilities at reasonable costs by existing technology.
Environmental monitoring program
An environmental monitoring program shall be implemented to monitor the micrometeorological conditions,

ambient air quality, noise level measurements, water quality, soil and sediment quality.
Environmental management plan
The project entails various impacts on the study area, some negative and some positive. Various impacts
identified during the construction and operation phases will be addressed through suitable monitoring and
mitigation measures including the development of disaster management plan. In addition, an environmental
monitoring program will also be implemented to monitor the realization of the environmental management
plan to ensure minimization and mitigation of the adverse impacts.
Costs associated with Environment Management Plan (EMP)
There is capital as well as operating costs associated with the implementation of the EMP, that needs to be
borne by the Developer.
The main components of the Capital expenditure are: solid and hazardous waste management, installation of
water & waste water facilities, technical support, development of green belt, safety and health check-up camps
etc. The total capex for EMP is 184.6 BDT million. The details of the same has been provided in the financial
viability chapter.
Similarly, the total operational expenditure for the EMP is 16.28 BDT million, which is considered to be phased
out equally in the first five years of operation. The same has been included in the financial viability analysis.
7. Financial Viability Analysis
7.1. Financial Analysis
The new EZ regime is Government of Bangladesh’s effort at harnessing private sector participation of local
firms and foreign direct investments for developing infrastructure—power generation, bridges, economic zones-
in a partnership mode to a greater extent.
The Economic Zone Act 2010 provides the legal coverage for attracting and leveraging private investment
towards development of zones as zone developers and operators, along with the provision for tailored
infrastructure services; such as private provision for power, effluent treatment, etc. on a Public-Private
Partnership (PPP) basis.
It is therefore assumed in the study that economic zones will have a large degree of private sector participation.
This also gets validated from the ground survey conducted where the private sector has shown interest in
partnering in the development of Mongla Economic Zone with 102 participants out of 150 indicating their
willingness to align with Mongla EZ, provided their demand for certain incentives are met. Accordingly, this
section analyses the financial viability of Mongla EZ, based on net financial benefits under different degrees of
involvement/participation of private sector and level of cash flows accruing to investors/developers.
The analysis is based on the land uptake demand assessment exercise undertaken for absorption of industrial
land, as set out in the section 3.9 of this report. Assumptions on the project timeline, construction cost,
operation and maintenance (O&M) costs and capital structure are presented in later sections. The model
developed proceeds to analyze revenues generating sources and consequently IRR & NPV to the developer.
Further, this section attempts to assess the lease rentals and upfront payment that BEZA may realistically
expect from the Developer. Later parts of this chapter undertake sensitivity analysis for various critical
parameters and assumptions to assess the volatility of the results of the Base Case.
In the financial analysis, while estimating the IRR, the terminal value of cash flow is not being considered.
7.2. Methodology
This financial assessment has been undertaken from the point of view of the potential Developer. In other
words, this exercise intends to assess the financial viability of Mongla site to the Developer.
Financial assessment along with the financial viability of the project will largely depend upon pricing, land
uptake at Mongla EZ and other timing scenarios that will influence the overall profitability of the project. To
have a robust model in place an exhaustive input sheet has been developed which broadly indicates all the
assumptions. Further with help of these matrices/assumptions the model calculates projected revenue streams,
capital and O&M costs. The model enables the testing of a number of parameters for their probable impacts on
the finances of Mongla EZ. Some of these parameters include payments that the developer would be willing to
make to BEZA and in this aspect; this section also attempts to assess the returns to BEZA by developing Mongla
EZ on PPP basis.
The primary outputs of the model are estimates of Equity Internal Rate of Return (IRR) and Project Internal
Rate of Return (IRR) to the Developer under different scenarios.
The broad level assumptions considered while developing this model are –
 BEZA will carry out bid process for Mongla EZ and award the project to the successful bidder at the end
of bid transaction process.
 A Development Agreement will be signed between Authority and successful developer for concession
period of 30 years.
 BEZA will be responsible for all the regulations relating to the development of the EZ and will also
finance all offsite infrastructure development.
 The Developer will be responsible for financing, land approvals and development, on-site infrastructure
development and O&M.
 Financing for land purchase and land development including on-site development will be handled by
the Private developer.
 The SPV formed by the private developer will be financed by developer’s own equity and loans from
commercial lenders.
 BEZA will have an agreement with the private developer that will impose conditions on criteria for plot
tenants or owners, guidelines for on-site infrastructure and common facilities.
 The developer will market the plot to industrial units.
 The private developer will enter into long term agreement with the industrial units. These industrial
units will be the end users/tenants at the plots in economic zone.
 The private developer will charge lease rentals as well as development fees from the tenant to generate
revenue. In addition to rentals, EZ Service fee will be charged by developer as per industry practice.
 Other sources to the developer from economic zone includes:
o Power and Water tariffs from tenants (supplied at subsidized rate)
o Revenue from Public Transport in economic zone
o Water Treatment and Effluent Treatment charges from industries
The overall structure is as presented in figure as below:
Private Loan-Govt. debt &

investor commercial loan
Equity Loan
Regulation Long-term
BEZA SPV (Private Industrial
Developer) Lease hold transfer
Units
1. Upfront payment
payments
2.Annual lease rent Rentals for utility
services
Land approvals, Financing, On-site

development, Operation & Management
Figure 101: Private Economic Zone Model
The financial viability of the Mongla Economic Zone is assessed through based on below estimations:
1. Costs of public lands
2. Capital Costs of acquiring the EZ inclusive of Relocation and Compensation Costs
3. Capital Costs of developing/constructing the zone
4. O&M costs of operating and maintaining the zone
5. Revenues accruing to the zone owner/operator
Finally, it has been assumed37 that the Developer will expect at-least an EIRR of 20% or above for this site to
be a financial viable proposition. Accordingly, the variable decision parameters surrounding Developer’s
willingness to pay to BEZA (upfront fees, annual lease rental etc.) has been decided keeping the above
mentioned EIRR criterion in perspective.
The following section delves in greater detail regarding the key assumptions used in this financial assessment:
7.3. Assumptions:
In light of the master plan; development cost estimate, demand projections and certain non-financial
assumptions are made in this feasibility study. As Bangladesh Economic Zones Authority (BEZA) will be
responsible for development of all off-site infrastructure facilities, hence its cost has not been covered in the
model. This includes all roads to be widened and utility connections to the border of the economic zone. The
land acquisition processes and the resettlement and rehabilitation (R & R) activities will be carried out by the
Authority-BEZA and the same will be completed by the end of 2015 so that the complete land is under
possession of the developer by the beginning of 2016.
Overview of key characteristics of the proposed land for Mongla EZ is provided in the table below:
Heads Units Value

Total Area acres 205
Total Area (ha) 83
Total processing area (ha) 78
Area Already Sold (ha) 0
Total Unsold Area (ha) 83
Total Developable Area (ha) 83
Land Utilization (%)

- Processing area in EZ % 94.54%
- Open & Green Spaces % 12.74%
- Internal Infrastructure (Roads, Admin. Block, Entrance Plaza, worship place etc.) % 15.79%
- Industrial Use % 58.34%
- Utilities & Public Amenities % 4.26%
- Specialized Infrastructure (Truck lay bay, warehouse, QA/QC Lab, R&D facility etc.) % 7.14%
- Residential Area % 0.66%
- Commercial activity (Retail space, Guest house, Investors club) % 1.07%
- Total Saleable Area (%) % 67.21%
- Total Saleable Area (ha) 56
Source: Inputs from MACE
7.3.1. Construction Phasing
The demand assessment for Mongla Economic Zone indicates a much higher demand compared to the land
area availability in proposed EZ as illustrated in earlier sections. Hence the infrastructure development in the
37 This is based on several interactions with BEZA and PPP office officials
zone is proposed to be carried out in single phase spread over 36 months38. The model considers construction
to start once all the project approvals and clearances are taken by the developer. The project timelines for
proposed Mongla Economic Zone (EZ) are assumed as per the average time required for Bangladesh
infrastructure projects as per historic trends and are shown in table below:
Table 50: Project timelines for Mongla EZ
Project Timelines
Project Development initiation by BEZA 1-Sep-14
EOI/RFQ /RFP months 6
Letter of Award / Development Agreement months 3
Financial Closure months 6
Approvals months 6
Construction Start Date 1-Jan-17
Construction period (months) months 36
Construction End Date 31-Dec-19
Date of Commencement of Commercial Operations 1-Jan-20
Source: PwC Assessment
The project construction has been assumed to start in year 2016-17 and to be completed by the year 2019-20
respectively after the project development initiation by BEZA.
7.3.2. Land uptake rate
In line with the best practices prevailing in economic zone development, it has been assumed that for Mongla
Economic Zone developer will construct the basic shell infrastructure- public amenities, utilities and roads. This
developed land in the Economic Zone will be provided on long-term lease to the industrial tenants. It has also
been considered that during the construction period, developer will carry out marketing of the plot
simultaneously to the industries. Once all infrastructure development is complete, services installed and the EZ
is fully ready for operation, the industrial tenants will start moving in their respective plots. Three scenarios
have been created for the land fill rate:

Pessimistic (%) 30% 60% 80% 100%
Base (%) 50% 80% 100%
Optimistic (%) 70% 100%
The listing out of land area demand industry wise for next 10 years based on the land supply under base case
scenario is as shown in table below:
Total Land area (acres) 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
38 However the sensitivity of model w.r.t. variation in construction period is carried at later stage.
Total 24 39 48 48 48 48 48 48
- Land (Apparel/RMG) 14 22 28 28 28 28 28 28
Construction Period
7.3.3. Revenue sources to developer
Developer will earn revenues through leasing and related activities. This includes- Development charges,
annual land lease rent, EZ Service Fees, Power tariff, Water tariff, sewerage and effluent treatment charges and
transportation services in Economic Zone.
In order to arrive at annual land lease rent that the developer may charge from tenants, prevailing rentals of
Mongla EPZ and other seven EPZ’s under BEPZA were analysed.
Table 52: BEPZA operated EPZ plot tariffs
EPZ Tariff39 Tariff40

(US$ /sq.mt./year) (BT /sq.ft./year)
1 Chittagong, Dhaka, Comilla, Karnaphuli & Adamjee 2.2 13.7
2 Ishwardi, Uttara and Mongla 1.25 9.3
Source: Inputs from MACE/ IIFC and PwC Analysis
For this assessment, the base case assumes that the Developer would be able to charge the lease rent prevailing
at five of the existing EPZs i.e. BDT 13/sq.ft/annum from the tenants.
Further, it has been assumed that the Developer would charge 10% of the land price as Development charge
from the tenants.
The annual escalation for lease rent is considered as 7.7%. This is based on World Bank data for Bangladesh
economy from 2005-13 that gives average inflation rate at 7.7%. It may however be noted that the land rent for
EPZs under BEPZA increased several times; 2001, 2007 and 2011 respectively in Bangladesh. The escalation
rate was in the range of 10%-25%. Accordingly, this assumption has been on the conservative side.
Other revenue streams to the developer include utility tariffs on water and power. The model is built on the
assumption that Power and Water will be supplied by the Authority to the Developer at subsidized rate. These
rates are taken as per prevailing rates in BEPZA regulated EPZ’s. Developer will be responsible for operation
and maintenance of these utilities and in turn sell to the industrial tenants with 10% surcharge as Service Fees.
Water treatment and Effluent treatment will also be charged by developer as per prevailing rates. Sewerage and
Effluent volumes for the treatment as % of water intake are considered at 60% and 20% respectively.
Table 53: Tariffs charged by developer from tenants
Power Water Water treatment Effluent treatment

(BT / Unit) (BT / '000 L) (BT per '000 litres) (BT per '000 litres)
8.25 27.21 50 30
39
for average 2000 m2 plot size
40 USD to BDT conversion= 80
7.3.4. Cost assumptions
7.3.4.1. Capex
Capital costs are based on the market value of the land which includes the cost of the public portion of land,
costs of on-site infrastructure for the zone, including earthworks, roads, institutional buildings, utilities, water
supply system and waste water treatment plant in line with the master plan. The capital cost is divided as
follows:
Project Cost Units Cost % of Total Hard

Cost
Land Cost BT Million/# 49.8 2.97%
Roads Culverts & Drainage BT Million/# 277.0 16.53%
Decentralized water supply Treatment & BT Million/# 163.8 9.78%
Distribution
Electrical Street Lighting & fire fighting BT Million/# 56.5 3.37%
Telecom & Communication systems BT Million/# 39.7 2.37%
Buildings - Industrial/Business BT Million/# 532.8 31.80%
Buildings - Commercial BT Million/# 135.2 8.07%
Buildings - Residential BT Million/# 228.9 13.66%
Buildings - MEP BT Million/# 2.7 0.16%
Sustainable infrastructure elements, RWH, BT Million/# 4.5 0.27%
summer storage tank & greenery
Capital expenditure for Environmental 184.6 11.02%
Management Plan (EMP)
Total Hard Cost BT Million/# 1675.46
Interest during construction BT Million/# 236.1
Total Project Cost BT Million/# 1,911.6
Source: Inputs from MACE and PwC Analysis
7.3.4.2. Opex
In addition to this capital cost, Operation and Maintenance (O& M) costs during the operational phase of the
project is presented below:
Total Operation Cost Unit Cost

- Road works including drain culvert BT Million/# 5.54
- Sewerage network including STP BT Million/# 8.56
- Water supply including WTP BT Million/# 4.1
- Electrical works including transformer & street lighting BT Million/# 1.13
- Buildings - Admin & Social Amenities BT Million/# 0
- Sustainable infrastructure elements, greenery, RWH, energy saving devices etc. BT Million/# 0.09
Total BT Million/# 19.42
Total Maintenance Cost
- Road works including drain culvert BT Million/# 13.85
- Sewerage network including STP BT Million/# 4.28

- Water supply including WTP BT Million/# 3.28
- Electrical works including transformer & street lighting BT Million/# 2.82
- Buildings - Admin & Social Amenities BT Million/# 44.97
- Sustainable infrastructure elements, greenery, RWH, energy saving devices etc. BT Million/# 0.09
Total BT Million/# 69.29
- Marketing Cost (% of sales) % 2.00%
- Misc. Expenses BT Million/# 5
In addition to the above, the following table represents the salary and other expenses that the Developer has to
incur:
Designation Number of Approx. salary BDT per Per annum

persons month cost
CEO 1 300,000.00 3600000
General Managers-Finance & Marketing 2 250,000.00 6000000
General Manager - Technical 2 250,000.00 6000000
Manager -Finance Administration & Legal 5 200,000.00 12000000
Manager -Technical 5 200,000.00 12000000
Manager - Marketing 5 200,000.00 12000000
Assistant Manager -Finance & Administration, 5 125,000.00 7500000
Legal
Assistant Manager -Technical 5 125,000.00 7500000
Assistant Manager - Marketing 5 125,000.00 7500000
Engineers & Supervisors 5 50,000.00 3000000
Support Staff 5 25,000.00 1500000
Security Staff 20 25,000.00 6000000
Total (in Million BDT p.a.) 84.6
In the financial model, capital expenditure related to environmental management plan (EMP) is taken into
consideration. The main components of the same are: solid and hazardous waste management, installation of
water & waste water facilities, technical support, development of green belt, safety and health check-up camps
etc. The total capex for EMP is 184.6 BDT million.
Also, maintenance cost associated with the environmental management plan (EMP) is included in the model.
Total operational expenditure for the EMP is 16.28 BDT million, which is considered to be phased out equally in
the first five years of operation.
Further, it has been assumed that the cost associated with the social impact assessment and corresponding
ARAP would be borne by Govt. of Bangladesh/BEZA. The model accordingly do not take this cost (BDT 0.392
million as capex or opex) into consideration while calculating the IRR.
The cost elements constitute of both; infrastructure development and Operation & Maintenance cost in
processing area as well as non-processing area. The processing area consists of industrial buildings41,
specialized infrastructure- warehouse, truck bays, Public amenities and utilities. The non-processing area has
41The industry sector split in processing area is as mentioned in section 3.8. The break –up is i) Apparel /RMG-59%, ii)
Food processing-31%, iii) Light engineering-10%
residential buildings, retail, guest houses, worship places and open spaces. The detailed land use pattern based
on the master planning undertaken is indicated in the table below:
Table 54: Land use pattern as per detailed Master Planning
in Saleable area Non saleable area

Land use pattern In Sq.mt. In %
Acres Acres % Acres %
1. Processing Area
1.1. Industrial sector
Food processing 1,49,925 37.04 18.06% 37.04 18.06%
Apparel /RMG 2,84,378 70.27 34.26% 70.27 34.26%
Light engineering 49,933 12.34 6.02% 12.34 6.02%
Total industrial area 4,84,236 119.66 58.34%
1.2. Specialized infrastructure
Warehouse 9,376.1 2.32 1.13% 2.32 1.13%
Truck lay-bay 15,306 3.78 1.84% 3.78 1.84%
Q.A & Q.C lab 11,403 2.82 1.37% 2.82 1.37%
R&D facility 12,761 3.15 1.54% 3.15 1.54%
Training centre 10,386 2.57 1.25% 2.57 1.25%
Total specialized 59,232 14.64 7.14%
infrastructure
Public amenities 15,323 3.79 1.85% 1.89 0.92% 1.89 0.92%
Utility 20,062 4.96 2.42% 2.48 1.21% 2.48 1.21%
Road 1,08,327 26.77 13.05% 26.77 13.05%
Green & open space 97,526 24.1 11.75% 24.1 11.75%
Total processing area 7,84,705 193.9 94.54%
2. Non processing area
Entrance plaza 6,193 1.53 0.75% 1.53 0.75%
Admin block 9,619 2.38 1.16% 2.38 1.16%
Guest house 3,207 0.79 0.39% 0.79 0.39%
Investors club 4,498 1.11 0.54% 1.11 0.54%
Creche 1,771 0.44 0.21% 0.44 0.21%
Residential 5,468 1.35 0.66% 1.35 0.66%
Retail 1,163 0.29 0.14% 0.29 0.14%
Place of worship 1,565 0.39 0.19% 0.39 0.19%
Road 3,618 0.89 0.44% 0.89 0.44%
Green & open space 8,193 2.02 0.99% 2.02 0.99%
Total non-processing area 45,295 11.19 5.46%
Grand Total area 830,000 205.1 100.00% 142.2 69.34% 62.9 30.66%
7.3.4.3. Usage Norms:
The water and power requirement for each of the industries are based on the best possible industry norms in
Bangladesh. These in turn were also benchmarked with the water and power consumption in relation to the
industrial developments in India.
The Survey of Manufacturing Industry (SMI) 2012 data provided information on number of industrial units
across each industry sector. Employment (per unit of land) and employment generated per sector has been
derived based upon this data.
A summary of usages norms included as part of our financial analysis have been indicated in table below:
Table 55: Industry-wise usage norms
Sectors Power Requirement (MW) Water Requirement Employment

(KLD) per hectare
(no.)
Textile 0.25 46.24 278
Food Processing 0.28 83.62 67
Light Engineering 0.32 46.24 167
Source: SMI Data 2012 and PwC Analysis
7.4. Capital Structuring
The development of Mongla EZ will be financed by equity as well as debt component for which a Debt equity
ratio of 70:30 has been assumed. The debt component includes commercial loan (50%) and Government debt
(20%).
The assumptions for the commercial loan are aligned with the borrowing terms of Commercial Banks lending
for investment in Bangladesh. The overall tenure of the loan has been assumed to be 11 years including 1 year
moratorium of post COD. The interest rate has been assumed to be 12% per annum. A ballooning repayment of
Principal has also been assumed:
Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Y11
0.00% 0.00% 0.00% 0.00% 5.00% 10.00% 12.00% 14.00% 20.00% 20.00% 19.00%
Further, Government debt of 20% from Bangladesh Bank is assumed to have borrowing terms as prevalent with
banks existing norms that provide repayment period of 20 years at interest rate of 10.50% (considering BDT
loan). The moratorium period for this loan has been assumed to be one year after the commercial operation
date (COD).
The snapshots of borrowing terms are as indicated in the table below:
Table 56: Financial assumptions in the model
Equity 30%
Debt 70%
- Commercial Loan 50%
- Government Debt 20%
Interest rate for Commercial Loan 12%
Interest rate for Government Debt 10.50%
Repayment period for Commercial Loan (years) 7
Repayment period for Government Debt (years) 10
Escalation
- Annual escalation for land rent 7.7%
- Annual escalation for land price 7.7%
PPP Investor will have to pay income taxes on ‘Income from Business or Profession’ as per the Income Tax
Ordinance, 1984. The ordinance allows deductions from total income or revenue for cash and non-cash
expenses (i.e. depreciation and amortization), to arrive at Net Income before Tax (NIBT). The applicable
corporate tax rate is then applied to NIBT to derive income tax to be paid. As per Finance Act 2009 (anuchched
Kha), Income Tax rate for the companies, which are not publicly traded, is 27.5%. This rate has been used in the
financial model for calculating the income tax payable to National Board of Revenue, Bangladesh.
According to the incentive package approved in the BEZA’s Governing Board meeting on 18 Feb 2015, economic
zone developer shall have tax exemption for 10 years from COD, 70% tax exemption for 11th year and 30% tax
exemption for 12th year. The same is incorporated in the model as fiscal benefit due to tax holiday.
7.5. Upfront payment and lease rental to be paid by the Developer

to BEZA
The land cost will be incurred by the developer immediately upon signing of the Development Agreement, in
the form of an upfront payment to be paid by the developer to the Authority. As discussed above, assuming the
Developer would expect EIRR of at least 20%, the upfront payment has been estimated to be around BDT 50
million (around 6% of the existing land price at Mongla). Further, the annual lease rent expected to be paid by
Developer has been estimated to be BDT 5.5 per sq ft. per annum. While estimating this, the price level for
saleable lease of serviced industrial land has been considered for analysing the current rates in the region, while
the Mongla EZ is being planned and constructed.
7.6. Returns from Project
The project returns under all the three scenarios- Pessimistic, Base and Optimistic are as indicated in the table
below42:
Table 57: Project returns
Project Equity Average Minimum

IRR IRR DSCR DSCR
Pessimistic 14.2% 19.1% 3.08 0.97

case
Base case 14.7% 20.2% 3.11 1.11
Optimistic case 14.8% 20.5% 3.12 1.11
In base case scenario, project IRR of 14.7% is attainable with returns to developer (equity IRR) of 20.2%. Under
Pessimistic and Optimistic scenarios, the Project IRR is expected to be in the range of 14.2% (Pessimistic) to
14.8% (Optimistic). The Equity IRR is expected to be in the range of 19% (Pessimistic) and 20.5% (Optimistic).
Mongla Economic Zone’s ability to repay its debt servicing obligations under each scenario is best shown by
debt service coverage ratio (DSCR). Under base case scenario, the average DSCR is 3.11 while the minimum
DSCR is 1.11. This indicates that Mongla Economic Zone have an ability to repay its debt under the base
scenario. Typically, a bank would feel comfortable lending to a developer whose debt service coverage ratio
42
While the cost associated with the Environemnt Management Plan has been considered in the IRR calculations, the cost
associated with Social Impact Assessment and corresponding ARAP has been assumed to be borne by Govt. of Bangladesh
and BEZA. The same has accordingly not being considered in the IRR calculations
(DSCR) remains above 1 throughout debt repayment period. It may however be noted that the min DSCR in the
pessimistic scenario may go below 1 thereby making the project unattractive to lenders.
Cash flows available for debt servicing (CFADS) Interest obligations Debt Principal repayment
600.0
BT million
400.0
200.0
-
2019
2033
2034
2035
2031
2018
2022
2032
2020
2029
2030
2023
2024
2026
2025
2021
2027
2028
Figure 102 - Debt Servicing in Base Case
The Revenue, EBIDTA, PAT and Project clash flows and cash flows to shareholders under base case scenario are
as indicated below:
1,800.0
1,600.0
1,400.0
BT million
1,200.0
1,000.0
800.0
600.0
400.0
200.0
-
2018
2032
2019
2030
2023
2033
2034
2035
2021
2027
2031
2022
2028
2020
2024
2026
2029
2025
Revenue EBIDTA PAT
Figure 103: revenues, EBIDTA and PAT under base case scenario
600.0
400.0
200.0
BT million
-
2019
2033
2034
2035
2031
2018
2022
2032
2020
2026
2029
2030
2023
2024
2025
2021
2027
2028
(200.0)
(400.0)
(600.0)
(800.0)
Project Cash flows Cash flows to Equity holders
Figure 104: Cash flows under base case scenario

7.7. Results of Simulation of Different Scenarios and Sensitivity to

Capital Costs and Prices
The purpose of doing a simulation of different scenarios and sensitivity to is to identify the factors critical for
the viability of success of the Economic Zone.
7.7.1. Sensitivity analysis for varying Upfront Premium and annual land
lease payment that the developer has to pay to BEZA
Upfront payment and annual land lease payment are the most critical components in the financial feasibility
assessment. Both of these will be the bid parameters that would be quoted by the bidder. At present upfront
payment for land has been considered as 6% of total land cost and annual land lease payment at the rate BDT
5.5 per sq. ft. per annum. The sensitivity analysis of upfront premium (as % of total land cost) and annual land
lease payment for the base case scenario indicated that EIRR is more sensitive to the variation in annual lease
rentals as compared to the variation in upfront premium.
Table 58: Sensitivity analysis for varying Upfront Premium and annual land lease payment
Land lease payment (BT per sq. ft. per annum)
10.0 11.5 13.0 14.5 16.0 17.5 19.0

Upfront Premium (%
2.5% 17.54% 18.79% 20.01% 21.21% 22.40% 23.56% 24.72%

of land cost)
5.0% 17.61% 18.86% 20.08% 21.29% 22.48% 23.65% 24.80%

7.5% 17.68 18.93% 20.16% 21.37% 22.56% 23.73% 24.89%
10.0% %
17.75% 19.01% 20.24% 21.45% 22.64% 23.81% 24.97%
12.5% 17.83% 19.08% 20.31% 21.53% 22.72% 23.90% 25.06%
15.0% 17.90 19.15% 20.39% 21.61% 22.80 23.98% 25.15%
% %
7.7.2. Sensitivity analysis for construction cost
Separately the sensitivity w.r.t. project hard cost component was undertaken. It is seen that under base case
scenario, for every 5% change in construction cost as in base scenario (C) the EIRR on an average changes by
2.9%.
37.72%
29.70%
23.91%
19.89%
17.41% 16.11% 16.11% 17.35%
C - 10% C - 5% C C + 5% C + 10% C + 15% C + 20% C + 25%
Figure 105: Sensitivity analysis for construction cost
7.7.3. Sensitivity analysis for other parameters
This section undertakes the sensitivity analysis on other critical parameters that could have effect on the EIRR.
The parameters with their respective conservative and bullish views that have been analysed for sensitivity are
as follows:
Table 59: Sensitivity analysis parameters for evaluation
Pessimistic Base Optimistic

Construction period (months) 48 36 12
Annual Escalation rate 7.7% 7.7% 15%
Cost Price (Power) 5 7.5 10
Cost Price (Water) 22 24.74 28
EZ Service Fees (BT/ sq. ft./ 8 8 12
year)
Equity 40% 30% 20%
Commercial Loan 50% 50% 20%
Financial institution loan 20% 20% 50%
The sensitivity of above mentioned parameters were analysed under each of the three scenarios.
Base case scenario
Figure 106: sensitivity of parameters w.r.t. EIRR under Base case scenario
Pessimistic case scenario
Figure 107: sensitivity of parameters w.r.t. EIRR under pessimistic case scenario
Optimistic case scenario
Figure 108: sensitivity of parameters w.r.t. EIRR under Optimistic case scenario
The following are the key observations of the sensitivity analysis undertaken in the above section:
 The development will be more sensitive to change in the annual escalation rate for lease rental
 The power tariff as charged by developer is also crucial as it impacts the EIRR considerably. Hence
the subsidised power rate as provided by Authority for EZ development will be critical
 Reduction in equity and increase in debt (financial institutional loan) also have considerable
impact on EIRR
 EZ Service Fees which is in addition to annual rentals charged by developer, water tariffs and
construction period are having negligible or no impact on project financials
8.Economic Internal Rate of

Return (EIRR)
8.1. Background
The objective of this analysis is to quantify the impact of the development of the proposed Mongla Economic
Zone (EZ) on the economy of Bangladesh. Financial analysis (or Financial IRR) estimates the return accruing to
the project operating entity (EZ developer), whereas EIRR estimates the return on the investment to the
national economy. Economic analysis is essential to develop a rationale for the public sector (the Government
of Bangladesh) to intervene in the investment and support the development of the proposed economic zone and
illustrate the measure of the economic benefits due to the intervention.
8.2. EIRR Framework

EIRR is a holistic approach which takes into consideration the following stakeholders (directly/ indirectly)
associated with the project:
 The project financers (whose return was calculated as the financial internal rate of return),
 The employment (both direct and indirect employment) generated because of the project,
 The suppliers and customers of the project,
 Competitors of the project,
 Residents who are being affected by the implementation of the project and
 Others
Determination of EIRR is directly aligned with the objectives of the multilateral agencies i.e. alleviation of
poverty, employment generation and overall development of the country.
A two-stage process has been adopted for the calculation of EIRR43.
EIRR= Private Returns+ Cost Gains
Where, Private Returns= Actual Revenues- Actual Costs
Cost Gains= Actual Cost- Opportunity Cost
All taxes and subsidies have been excluded for computation of EIRR
Economic analysis requires quantification of various costs and benefits converted to ‘economic equivalent’
terms. EIRR also requires identification of ‘externalities’ and valuation of inputs and outputs at their true
economic prices, or the ‘opportunity costs’.
Financial analysis only looks at the project from the perspective of the implementing agency. Financial analysis
is only concerned with line items that entail monetary outlays. Economic analysis on the other hand looks at
cost and associated benefits to the economy. In economic analysis, a resource must be priced at its opportunity
cost (its value in the best possible use), even if it is obtained free since use of the resource is a cost to the
economy. Economic analysis measures both the positive and negative impact of the project.
The economic cost reflects the degree to which the consumption elsewhere in the ecosystem is sacrificed due to
the diversion of the resources required for the project. Whereas, the economic benefit portrays the extent to
which the project contributes to the increasing value of consumption available to the society.
Some important aspects to be considered while undertaking economic analysis are:
 Economic analysis is considered at constant prices in local currency terms. Thus, in case of accounting for
economic costs and benefits, all costs and benefits must be measured in ‘real’ terms. In such analysis, all
the costs and benefits are considered at the commencement year i.e. 2017 and an escalation factor has
been applied on the costs and the associated benefits.
43Benjamin Esty, Frank Lysy, & Carrie Ferman, “An Economic Framework for Assessing Development Impact”, Harvard
Business School Case 9-202-052, February 7, 2003.
 For undertaking the economic analysis, financial costs are to be converted to their economic cost
equivalents. By and large the financial components are capex (capital investment in land, construction cost
etc.) and opex (operational expenditure).
 Items like taxes, duties and subsidies included in the financial cost are excluded as these are market
distortions.
 Debt service costs (interest during construction) are not included as economic cost in the analysis as the
same doesn’t require usage of resources.
 Social costs such as Resettlement and rehabilitation are included in the economic cost calculation
8.3. Assumptions
The Economic IRR for the project has been calculated considering economic costs and benefits generating
out of the project over a period of 20 years. The assumptions adopted for computation of economic IRR are
based on the assumptions as depicted in our financial analysis. Base case was used for calculating the EIRR
for the project. In addition to the above, the following assumptions were considered for arriving at the EIRR:
 Cost of land: The financial cost of the land was converted to its economic cost. The existing cost of the land
is based on the government rates in Bangladesh. However, rates of some industrial land parcels in the
Khulna/ Mongla region were gathered to benchmark the prevailing land rate in the region. It was observed
that the market price of the land tends to be twice the recorded government rate in Bangladesh. Hence, to
convert the land cost to economic cost, a multiplication factor (market conversion rate) of 2.0 has been
applied to the cost of land.
 Social costs: The social cost of site development is calculated as BDT 0.392 million. Social cost for the
project is the cost associated with the Resettlement and Rehabilitation of the squatters currently residing
at the project site.
 Environmental costs: Costs related to Environment have been also included in the model. Costs
associated with technical support, development of green belt, solid and hazardous waste management,
waste and waste water, construction safety etc. have been included as part of capital expenditure. In the
operational expenditure section, maintenance costs for heads like operation of CETP/ STP/ waste
facilities, establishment & training and monitoring of performance indicators have been considered.
 Capital Expenditure (Capex): The capex incurred for various components of the project is obtained from
the financial model. This has further been segregated into three components:
a) Material – 50% of total capex
b) Equipment – 30% of total capex
c) Labor – 20% of total capex
 Operating Expenditure (Opex): We have assumed that 100% Opex will generate on account of the
materials and the consumables but not on account of the equipment. The operating cost for personnel is
calculated separately in the financial model.
 Land lease expenses: Land lease expense is not included in the economic analysis since economic value of
land has already been considered in the Capex calculations.
 Import of Equipment: We have assumed that 75% of the equipment and machinery used for the project
would be imported. This is based on the standard practice and market benchmark of similar industries in
Bangladesh.
 Capex and Opex have been converted to economic equivalents/ market costs using the following
assumptions:
o Shadow Exchange Rate Factor (SERF) of 1.03 was considered. The basis is that BDT is
overvalued by about 3%44.
SERF is the ratio of economic price of foreign currency to its market price. Alternatively, it is
the ratio of the shadow to the official exchange rate. For economic analysis using the domestic
price numeraire, the SERF is applied to all outputs and inputs, including labor and land that
have been valued at border price equivalent values, with project effects measured at domestic
market price values left unadjusted.
44 Research journal published by BIDS analysts Drs. Hossain and Ahmed (2009)
o Shadow Wage Rate Factor (SWRF) of 1.00 for skilled labor and 0.75 for unskilled labor was
assumed.45 Further it was considered that the project will have a mix of 75% skilled labor and
25% unskilled labor. Hence, SWRF of 0.94 has been arrived.
SWRF is the ratio of the shadow wage rate of a unit of a certain type of labor, measured in the
appropriate numeraire, and the project wage for the same category of labor. Alternatively, the
ratio of the economic and the SWRF can be used to convert the financial cost of labor into its
economic cost.
These figures are in conformity with the information provided by Bangladesh Planning
Commission and ADB economic analysis reports for Bangladesh. These were applied to
tradable inputs and labor component to get domestic equivalents. It may be noted that since
SERF is applied on the costs, factors such as the import duty is considered to be adjusted in the
SERF and hence import duty has not been considered separately.
 VAT rate (for both capex and opex) has been considered as 15% according to the prevailing rate for
Bangladesh.
 Estimation of indirect and induced employment generation (due to generation of downstream industries)
is based on Employment Multiplier Coefficient of 0.7. The coefficient was extracted from Background
Paper for World Development Report 2013 “Structural Transformation and Employment Creation”46. The
indirect employment generation coefficient for several developing countries (size and geography similar to
Bangladesh) was considered to arrive at this figure.
 Tax Treatment: Since tax, subsidies and incentives are distortionary in nature; their impact needs to be
nullified by making necessary adjustments.
8.4. Approach and Methodology

The economic analysis for proposed Mongla EZ was undertaken in three major steps:
a) Step 1: In this step, the total economic cost for the project was calculated. All the direct costs associated
with the project development were enlisted and broken down into the three factors of production viz.
capital (material and equipment), land and labor. The pertinent financial costs were converted to the
economic costs. All the assumptions mentioned in section 1.2 were taken into consideration for the
conversion.
b) Step 2: The financial benefits from the proposed Mongla EZ project was calculated and converted to
economic terms to capture the economic benefits which (directly/indirectly) impact the economy of
Bangladesh. In this step, the cumulative economic benefit accrued from this project was computed.
c) Step 3: Economic return for the project tenure of 20 years was calculated by deducting the economic cost
from the total economic benefit. IRR was calculated considering the base case. The total employment
(direct and indirect) to be generated from the proposed EZ project was calculated both in number and in
economic term.
The approach & methodology adopted has been illustrated in the following diagram:
45 Similar assumption was taken for ADB-Khulna water supply project

46 Background Paper for World Development Report 2013 “Structural Transformation and Employment Creation” by Christian Kingombe
and Dirk Willem te Velde, Overseas Development Institute
Stage 1: Conversion of financial costs to Stage 2: Finding out the factors of production
economic costs (from capex and opex) and the pertaining economic costs
Stage 4: Calculation of the direct and

indirect benefits of the project and Stage 3: Calculation of total economic cost
converting to economic values
Stage 6: Calculation of EIRR and economic

Stage 5: Calculation of total economic
value of total employment (direct and
benefits
indirect) generated
Figure 109: Framework for Economic IRR calculation
8.5. Illustration of Calculations

The EIRR calculation has broadly two parts viz. calculation of economic cost and calculation of economic
benefits.
Calculation of Factors of Production for Capex: For calculation of economic cost, the capital expenditure and
the operational expenditure was taken into consideration. From the capex, land cost and interest paid during
construction were subtracted to arrive at the total cost for the private developer. Further this was split into the
three factors of production viz. capital (material and equipment), labour and land (calculated separately). The
cost associated with the three factors of production was calculated based on the split weightage assigned to each
of the three factors.
The economic cost for material and equipment to be used for the project was calculated based on the domestic
procurement of equipment for industries. The value derived further eliminated the VAT component associated
with the domestic equipment.
For the labour, SWRF and Income Multiplier were used to find out the impact on economy due to the respective
factor of production.
Economic Conversion of Land Rate: A market rate conversion factor was applied on the land rate to convert the
financial cost of the land to the economic cost of the land.
Calculation of Factors of Production for Opex: In the operational expenditure section, cost of labour was
calculated separately. In the O&M stage, no cost of equipment will be applicable; thus only the cost of raw
material/ consumables will prevail. Land lease cost wasn’t considered in the Opex and tax components (such as
VAT) were eliminated in the calculation to zero out the effect of taxation.
Social cost: The cost associated with the Resettlement and Rehabilitation (R&R) activities was computed
separately while undertaking the Social Impact Assessment (SIA) and Abbreviated Resettlement Action Plan
(ARAP) study for proposed Mongla EZ.
Cost incurred due to Environmental Management Plan (EMP) has also been considered in the model. Various
items such as solid & hazardous waste management, installation of water & waste water facilities, development
of green belt, technical support, environmental monitoring etc. are considered in the capital expenditure. All
the operation & maintenance costs related to CETP/ STP/ waste facilities operation, establishment & training
cost etc. have been taken as the operational expenditure.
Calculation of Total Economic Cost: The following components were added to arrive at the total economic cost
of the project:
a) Material (Capex)
b) Equipment (Capex)
c) Labour (Capex)
d) Land Cost at market rate (Capex)
e) Social Cost (R&R cost)
f) Material (Opex)
g) Labour (Opex)
Calculation of Total Economic Benefit: For calculating the total economic benefit, all the revenue generating
activities of the project were considered from the revenue calculation of the financial model. Further, all the
components were summed up to arrive at the total economic benefit generating from the project.
The lease rental that the private developer would be paying to the government has an impact on the economy
and it was included in the calculation. The revenue sources as enlisted in the financial model were considered
for calculation of economic benefit. The revenue sources are as mentioned below:
a) Land for manufacturing (upfront payment and rental)
b) Land for specialized infrastructure (upfront payment and rental)
c) Land for residential (upfront payment and rental)
d) Land for commercial (upfront payment and rental)
Economic Return and EIRR: Economic Return is calculated by deducting the Total Economic Cost from the
Total Economic Benefits.
BDT million has been used as the unit in the model. The following table depicts the Economic Return for the
project.
Year Economic Return Year Economic Return

(BDT million) (BDT million)
664.39
2017 (379.70) 2027
815.70
2018 (563.94) 2028
978.67
2019 (563.94) 2029
1154.18
2020 (328.05) 2030
1343.21
2021 (45.48) 2031
1546.80
2022 51.41 2032
1766.06
2023 155.53 2033
2002.21
2024 267.66 2034
2256.53
2025 393.44 2035
2530.44
2026 523.89 2036
Internal Rate of Return (IRR) was computed for the project tenure of 20 years.
In addition to the above, the total employment (direct and indirect) number generated from the project was
also calculated. Total economic value of the employment generated was calculated from the employment figure
by applying the SWRF.
8.6. Results and Discussions

Base case Economic Internal Rate of Return (EIRR) has been calculated as 19.06%, which indicates that the
project is economically providing fair return throughout the tenure of the project and thus it’s economically
viable. The project will generate a Net Present Value (NPV) of 1491.22 BDT million (calculated considering a
discount rate of 12%).
A sensitivity analysis has also been carried out by varying the discount rate from 8% to 18%. The results are
tabulated below:
Table 60: Sensitivity on economic rate of return by varying discount rate
Discount
8% 9% 10% 11% 12% 13% 14% 15% 16% 17% 18%
Rate
NPV
(BDT 3,433.15 2,825.44 2,308.27 1,867.46 1,491.22 1,169.65 894.51 658.84 456.81 283.50 134.76
million)
Net Economic Benefit
2,200.00
1,700.00
1,200.00
700.00
200.00
(300.00)
(800.00)
Figure 110: Economic Return over the tenure of the project
The above figure depicts that post 2021 (5th year from the Commercial Operations Date), the Economic Return
of the project arrives in the positive range and gradually increases over the tenure of the project.
The development of proposed Mongla EZ will generate employment (both direct and indirect) of 0.27 million
over the project span of 20 years. The economic value of employment generated from the proposed Mongla EZ
has been calculated as 67.22 US$ million.
9.Annexure
9.1. Review of site and infrastructure enablers
Mongla economic zone at Khulna Division of Bangladesh is one of the four pilot projects identified for
development under the PSDSP. The site for the Mongla economic zone lies in Bagerhat district with identified
land parcel of 205 acres for development. The proposed site lies at a distance of 40 km from Khulna city and
230 km from the capital city of Dhaka. The nearest airport presently is Jessore airport at a distance of 105 km.
Khan Jahan Ali Airport is a planned airport in Mongla. An Export Processing Zone (EPZ), with an area of 460-
ha, is located adjacent to the port.
EZ Site
Mongla Port
Pussur River
Mongla River
Figure 111: Mongla EZ Site

Figure 112: Proposed site and approach - Mongla Economic Zone
The proposed site for Mongla economic zone shares close proximity (within 200 meters) with Mongla port,
providing strategic advantage in terms of accessibility to various international markets for trade. Mongla also
enjoys the advantage of being along the banks of an inland river, especially since inland water transport is a
major mode of transportation in the country, covering 50% of freight traffic in Bangladesh.
9.1.1. Road Connectivity

Mongla is currently connected to nearby districts through a number of Zila and Upazila roads. Bagerhat-
Rampal-Mongla Road (34 km) and Morelganj (CARE Bazar) -Mongla Road (26km) are some of the key roads.
Mongla is connected to Khulna city via a two lane roadway. The 40 km road along the river to the north is in
good condition, except for the last portion of it at the entrance to the port, which requires resurfacing. About 10
km north of the port, this road intersect with a road toward the proposed Padma Bridge through Mawa. The
road to the Bridge is almost new and in a very good condition. Moreover, National Highway, N7, connects
Daulatdia Ferry Terminal (Dhaka) to the Port of Mongla.
However, transportation between Central Bangladesh and Mongla is challenging because of ferry crossing. This
is one of the key bottlenecks leading to insufficient use of Mongla Port by central Bangladesh as the ferry
services gets routinely disrupted by low water or heavy fog. Lesser priority of economic goods for ferry
transportation as compared to passenger services also results in delays.
With the construction of bridges on Jamuna and at Pakshi, road link to North Bangladesh has been established.
However, there is no bridge connection on the south western side. Currently, there are three main road routes,
which can be used for transport between Dhaka and Mongla. The commonly used route is through Mawa or
Paturia ferry crossing, while it is possible also to use Jamuna Bridge but the distance and time taken is much
longer as compared to ferry crossing.
As a part of the Bangladesh Southwest Road Network Development Project, Government plans to construct the
Padma Bridge. Following the opening of the new bridge the road distance between Dhaka and Mongla will be
reduced to 189 km, 74 km shorter than the present 264 km distance between Dhaka and Chittagong – and the
road will be much less congested.
The three routes for road transportation from Dhaka region to Mongla are presented in the figure below:
Figure 113: Road connectivity for Mongla
9.1.2. Rail Connectivity

Currently, there is no direct rail connectivity between major trade centers and Mongla Port. Even the rail
connectivity in south western and north Bangladesh is only up to Khulna. Recently, Government of Bangladesh
has undertaken the Khulna-Mongla railway project line. It is expected that this rail connectivity project will
provide smooth movement of economic goods within south western and north Bangladesh.
The government has also taken up the project for constructing a multipurpose bridge (including rail line) over
the River Padma. The Padma railway link project is proposed to have connectivity up to Bhanga under Phase I
and this link will be extended to Jessore in Phase II. This link will provide rail access to Mongla Port.
9.1.3. Waterways
Water transport has been a traditionally important part of the overall transport system within Bangladesh.
Transportation of freight and passengers to and from southern and south western part of the country takes
place via inland waterways. However, siltation and shrinkage of the navigable network in dry season has been a
major challenge in harnessing the full potential of inland water transport industry in Bangladesh.
Commodities in and out of Mongla, due to poor inland road connections, are handled by inland water transport
but are limited to the Khulna region. While there was a regular established inland waterway route from Mongla
to Dhaka until 2010, the route stands disrupted as of now due to siltation in the MG canal (length - 30km.
depth at low tide - 1 meter). Currently, a detour is used by vessels via Sundarban Bogi canal. However,
restrictions imposed by the forest department on account of possible environmental damage to the Sundarban
are a major hindrance for this route.
The inland waterway distance between Mongla to Dhaka and between Mongla to Chittagong is very close:
 Dhaka - Chittagong : 307 km

 Dhaka - Mongla: 304 km
Connecting Mongla port to central region of Bangladesh through waterways therefore will need a regular
arrangement for dredging and maintenance of the canal.
At present, no container is transported through waterways and only bulk economic goods get transported
through ships. However, an inland river container terminal is close to completion at Pangaon, Narayanganj,
and the knitwear and fabrics hub near Dhaka. After the terminal becomes operational, the country’s river route
will be open for container transport.
Mongla’s connection to outside world beyond Bangladesh is through the Mongla port, a river port located 131
km upstream from Bay of Bengal on the river Pussur at its confluence with Mongla River.
The figure below presents a schematic depiction of Mongla’s location and access channel relative to the Bay of
Bengal.
Figure 114: Mongla's location and access
With respect to power infrastructure, Mongla EZ shares the advantage of proximity to existing power lines in
the area. However, in order to fulfil the additional industrial requirements certain upgrading may be required
in terms of setting of new substation to provide power to the site.
Other necessary infrastructure such as wastewater treatment plant, drainage system are absent in the area. The
Economic zone site does not have mobile telecom connectivity although fixed line connectivity is present.
In the background of the above, it therefore needs to be underlined that the Mongla Economic Zone site is in
need of infrastructure up-gradation and enhancement. Connectivity, Salinity and flooding are major issues
facing the region and appropriate infrastructure development is needed for promoting the Economic Zone site.
Mongla Port
National Highways Upazila Road Kachcha Union Road Kachcha

Upazila Road Pucca Union Road Pucca
Figure 115: Mongla Upzila map showing road and water connectivity
9.2. Survey results for shortlisted sub sectors

Within these sectors the sub-sectors were further short-listed based on the probability of occurrence. Sub-
sectors with probability of occurrence > 50% have been short-listed.
Table 61: Sub-sectors shortlisted

respondents respondents Weighted average
respondents (%) (%) ranking 5- (%) ranking 8- (probability of
ranking <5 7 10 occurrences)
Food Processing
Aquaculture Feed Plants 17% 56% 27% 62%
Dairy products 27% 48% 25% 55%
Fish Processing 8% 24% 69% 80%
Meat Processing 26% 53% 21% 56%
Light Engineering
Electronics 45% 43% 12% 47%
IT and Hardware 60% 26% 14% 44%
Light Engineering (bicycles) 19% 35% 46% 65%
Light Engineering (others) 25% 50% 25% 57%
Textile and Leather
Dyeing & processing industry 54% 30% 16% 45%
Jute based industries 8% 30% 61% 77%
Knitted fabrics 45% 37% 18% 50%
Leather industry 48% 43% 9% 45%
Spinning mills 52% 33% 15% 47%
Textile and RMG 28% 43% 29% 58%
Weaving Mills 38% 48% 14% 53%
9.3. Suitability of final shortlisted sectors from Global and

national perspective
As seen in the methodology and analysis presented in earlier sections, the Potential Sectors are identified that
will form the processing area for the Economic development. This section deals with assessment for each sector
based on global industry trend, Bangladesh position, Khulna’s location strength and survey analysis.
9.3.1. Detailed analysis of the sector
9.3.1.1. Food Processing- Overview

The global Food Processing industry was estimated to be USD 3,200 billion in the year 201047. For developing
economies, the contribution of Food Processing sector to GDP is lowest for Japan at less than 3% and highest
for China at around 25%. In Bangladesh, the sector contributed to 2.04% of GDP in 2010-1148.
Across all regions, the major sub-sectors on the basis of demand are Meat Processing, Poultry, Processing and
Preservation of Fruits & Vegetables and Sugar products. These sub-sectors contribute to more than 70% of the
demand of Food Processing sector globally. The regions that contributed more than 60% of global retail sales of
processed foods are United States and European Union. However consumption of developing countries is
higher for food items produced directly (~58% share). This consumption is expected to increase to over 70% by
2050. Food processing industries in developing countries are growing on account of increasing share of middle-
income group and their spending pattern in these countries. For instance, Share (percent) of Middle Class in
Asia Pacific that stood at 28% in 2009 is estimated to rise to 66% in 203049. Food processing exports have
increased from USD 552 billion in 2003 to USD 1,457 billion in 2013 at CAGR of 10.2%. This growth is second
highest; after fuel and mining products. Bangladesh contributed only 0.1% to the global exports in 2013 which
is far below when compared to share of other countries.
12.5%
9.9%9.9%
9.5%
3.9% 4.1%
3.5%
3.0% 3.1%
2.6% 2.6%
2.1% 2.0% 2.0%
1.2% 1.3%
0.8% 0.5% 0.5% 0.6%
0.1% 0.1% 0.1% 0.1%
USA UK China Hongkong India Bangladesh
2001 2006 2011 2013
Figure 116: Country wise Contribution to Global Exports in Food Industry
Source: WTO
47Gyan Research and Analytics Pvt. Ltd, 2012

48Global Agricultural Information Network (GAIN); includes Beverage Industry
49 OECD development center Working Paper on “The Emerging Middle Class In Developing Countries”
Bangladesh: The Food-processing industry in Bangladesh mostly thrives on serving the domestic demand.
Demand for processed foods arises primarily from Bangladesh’s growing middle class population. The total
output of Food-processing industry in Bangladesh in 2012 was 6049.54 Billion Taka. Contribution of the
industry to GDP has remained constant at 2% over the years.
Table 62: Food Processing Contribution in GDP
Fiscal Year50 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

(July/June)
1,262 1,345 1,535 1,847 1,891 2,120 2,252
Food Manufacturing,
Million, in USD
2.09 2.17 2.25 2.32 2.12 2.12 2.04
Contribution to GDP
(%)
The major food processing industry categories present in Bangladesh are: Fish Processing, Grain mill products,
starches & starch products, prepared animal feeds and Manufacture of vegetable and animal oils and fats
Meat Processing ,
Fish Processing,
0.1%
8.1% Processing of fruit
Prepared animal
& Vegs., 0.3%
feeds, 5.3%
Other food Mfg of veg. &

products, 20.5% animal oils & fats,
26.8%
Grain mill Dairy products,

products & starch 0.5%
products, 38.4%
Figure 117: Food processing sub-sector output Contribution in Bangladesh 2011
In terms of import Food Grains- Rice, wheat, Milk & cream, spices, Edible oil, pulses and sugar are major
import items forming 12% of total imports in Bangladesh
Exports (raw & Imports (raw &
processed items ) processed items ) in 201351. These form the raw materials for rice, dairy and
oil processing industries. Frozen food and tea are major
export products. Tea exports form minimal share (0.01% in
2013) while frozen food is the second largest export
industry in Bangladesh after Textiles and RMG. The
exported products in frozen food segment are mainly
frozen shrimp and prawn, fresh and chilled fish, frozen
50 Source: Statistical Yearbook of Bangladesh, 2011;Bagladesh Bureau of Statistics (BBS)
51 Excludes imports and exports to/from EPZ, as sector wise data not available for EPZs
Figure 118: Imports/exports in Food Processing

industry in Bangladesh
fillets of fish, shark fins, dehydrated fish, live crab and turtles and fish meals. Segments that are evolving in
frozen fish sub-sector are Hatcheries, Sustainable aquaculture technology, Feed Meals Plants and processing
unit for value added products. In frozen food segment, Shrimps are the most significant in terms of exports
even though they form a small segment of total frozen food production (6.43%). Shrimps form ~80% and 95%
of frozen food and food industry exports respectively in 2013.
The excess of imports of produced food i.e. food grains, pulses, oil seeds and sugar indicates these items are
catered to the domestic consumption demand and/or input to related industries. Also there are processed items
like dairy products (Milk & cream) and Edible oil being imported indicating potential to develop these
processing industries owing to local availability of raw supplies in Bangladesh. Moreover, higher share in
output by fruit, Vegetables and starch processing industries indicates sufficient availability of such raw supplies
locally in Bangladesh and development of processing industries of this kind in proposed Mongla EZ.
9.3.1.2. Textile, RMG & Leather - Overview

The Global Textile and Apparel market reached USD
1060
707 Billion in 2012. The market is slated to cross USD
1000 Billion by 202052. The demand and supply hubs 707 349
585
in the market are very distinctly placed on the globe.
358 285
The majority of the demand (~60%) is generated by the 238
711
developed Economies like USA, Canada, Europe, China, 154 422
204 347
and Japan. Asia Pacific region alone caters to more than
50% of the world demand lead by China and Japan 2002 2007 2012 2021
mainly. As far as the supply side goes, more than 60% Clothing Textiles
of the world demand is catered by China, India,
Bangladesh, Vietnam, Turkey and EU. The market has Source: WTO
shown consistent growth in last decade with a CAGR of Figure 119: Global Textile and Apparel Industry Trade in
11%. USD Billions
Textiles and RMG exports globally have increased from USD 406 billion in 2003 to USD 766 billion in 2013 at
CAGR of 7%. As seen from the graph below, China & Hong Kong, China collectively accounted for more than 40
% of the total global trade in 2012. Bangladesh on the other hand have followed a robust growth trajectory and
established its position in the top 5 exporting nations others being Germany, Turkey and India. Along with
India and China, Bangladesh is set to increase its market share in the global market by 202053. This will pave
the way for the Asia Pacific region to dominate the Global textile Market by increasing its share to more than
60% by 2020.
52 WTO, Technopak White paper on Global & Indian Textiles & Apparel Sector, Ministry of Textiles
53
WTO
50%
42%
36% 36% Increasing dominance
29% of Bangladesh in
Global trade
17%
10%
7%
5% 5% 6% 5% 4% 5%
3% 3% 3% 4% 4% 1% 2% 3% 3% 3%
1% 1%
3% 2% 2% 2% 1% 1% 1%
RoW China Hong Kong Germany India Turkey Bangladesh US Vietnam Indonesia Thailand
2002 2007 2012
Figure 120: Global exports in Textiles and Apparels 2002-12
Source: WTO
The demand for various categories of textiles in Bangladesh has been projected for 2020. The expected CAGR
across categories falls in the range of 2%-3%.
Table 63: Textile demand across segments in Bangladesh
Product Units Demand Expected CAGR

2011-12 2020-21
Fiber Mn tonnes 53 65 2.3%
Yarn Mn tonnes 67 90 3%
Fabric Bn. Sq. Meters 370 480 3%
Garments Bn. Pcs 145 190 3%
Bangladesh: The total output of Textile, RMG and Leather industry in Bangladesh in 2012 was 2,611 billion
Taka. Within this Textile, RMG and Leather had 27%, 705 and 3% share respectively. The emergence of
Readymade Garment Industry (RMG) with its export oriented set up has altered the manufacturing sector in
Bangladesh in last 2o years. The major sub-sectors in this are: Manufacturing of wearing apparel,
Manufacturing of knitted and crocheted apparel, Preparation and spinning of textile fibres, Jute textile and
Finishing of textiles (dying, bleaching etc.). Leather has negligible share in output (> 0.5%).
Preparation and spinning of textile

fibres
11.4% Weaving
22.2%
3.1%
Finishing of textiles (dying, bleaching
4.3%
etc.)
4.0% Jute textile
1.4%
1.9% Handloom textile
1.1%
0.2%
Made-up textile articles, except apparel
Mfg of cordage, rope, twine & netting
49.4% Other textiles
Figure 121: Textiles, RMG & Leather sub-sector output Contribution in Bangladesh 2011
In terms of import raw cotton, Yarn, Textile and articles together constitute ~ 21% of total imports54. These
form the raw materials for Textiles and RMG industries. For exports under this sector, RMG today contributes
to around 80% of the exports in Bangladesh and constitutes around 3% in the global market positioning
Bangladesh as a Global Hub in RMG Manufacturing. Currently Bangladesh is the 2nd largest contributor in
RMG exports globally. RMG manufacturers usually import fabric from different countries as locally produced
raw material cannot compete with imported materials in terms of price or quality. These backward linkages
sub-sector for RMG industry includes cotton
production, spinning (Cotton & Synthetic yarn), Imports (raw & Exports (raw &
processed items ) processed items )
weaving and knitting, dyeing and printing, and
accessories (e. g. buttons).
At present 25-30% value addition takes place to RMG

products as manufacturers import bulk of the raw
materials. On the contrary almost 70% value addition
is undertaken for jute products that get exported.
Leather and Leather manufactures together constitute

3% of total exports in 2013. Tanning (along with
Dyeing) forms 1% of import share in Bangladesh. Figure 122: Imports/exports in Textiles, RMG &
Leather industry in Bangladesh
Leather sector is very much akin to RMG sector.
However there is larger scope of value addition ~90% as oppose to RMG where value addition scope is ~40%.
This is mainly due to fact that basic raw materials for leather sector are locally available from the local livestock
base. About 50% of leather is being exported in the form of semi-finished and finished leather losing the value
addition opportunity. Rest 50% is being converted into footwear and leather products for low-end market55.
Although exports of Bangladesh are more dominant compared to imports of Textile, RMG and
Leather sector, value addition and backward integration of value chain remains visibly absent.
1%
3%
10%
Jute mill 2% 8% 15%
3%
2%
16%
Textile
mills
Garment
Factory
97% 36%
20%
87%
Barisal Chittagong Dhaka Khulna Rajshahi Rangpur Sylhet
54 Excludes imports and exports to/from EPZ, as sector wise data not available for EPZs
Integrated Support to Poverty and Inequality Reduction (INSPIRED) Technical Report on “Leather Sector Includes a Value Chain
55
Analysis and Proposed Action Plans”, January 2013

Figure 123: Division wise textile establishment in Bangladesh in 2011
In terms of geographic spread, there are around 220 tanneries, 3,500 MSMEs and 110 large firms related to
leather tanning, leather goods and footwear sub-sectors56 in Bangladesh with majority of tanneries
concentrated in the Hazaribagh area of Dhaka. As per reports, BSCIC is establishing Tannery Estate in Dhaka in
order to shift the existing Tannery units of Hazaribagh to an environmentally suitable new site57. Leather
footwear and goods accessories are majorly located in Dhaka, Rajshahi, Chittagong and Khulna58.
9.3.1.3. Light Engineering- Overview
Bangladesh: Light Engineering Industry is the most labour intensive sector in Bangladesh. It has been
under the radar of the Government as it is identified as one of the thrust sectors in the Perspective Plan as well
as by Bangladesh Board of Investment Promotion. Currently, there are about 40,000 light engineering
workshops/enterprises operating all over the country in which employs 0.8 million semi-skilled, skilled and
technically educated people and innovative entrepreneurs. Most of the Light Engineering firms are micro and
small employing on an average of 5 persons. The industry has an annual turnover of USD 1600 million with
import substitution products to the tune of USD 200 Million. The products of light engineering sectors are:
automobile spares, railway engine & rail line spares, bicycle & cycle rickshaw, Iron chain, machine tools, jute &
textile machines and spares, chemical industry machines and spares, sugar and food industry machines &
spares, engineering & metal industry machines and spares, marine and ship industry spares, agricultural
machines, accessories and spares, plastic and related product machines and spares, electrical goods and
accessories, etc.
311.1 309.55
293.9
222.65
203.47
190.7
148.4
91.63
72.8
38.19
2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011
Bicycle Engineering Products Electronics & Electrical Products
Figure 124: Bangladesh LEI Exports (in Mil USD)
56 INSPIRED Program by EU
57 Promote BD leather
58 SME Foundation
9.4. Validation of land demand (top down approach) for

Mongla EZ
The inputs from the ground indicated that the demand for land at the proposed Mongla EZ appears to be higher
than the supply of land, thereby, prima – facie justifying the business case for establishment for Mongla EZ. A
top down approach has been adopted to further validate the above results. This approach is based on the
historical growth trends of industrial units (and therefore the corresponding demand for industrial land) in
Bangladesh and Khulna division. This historical growth trend has been projected to arrive at the future demand
for industrial land at Mongla.
It may however be noted that the Top Down approach as mentioned in this section is only used
as a validation tool of the outcome from the survey. Except for the validation purpose, the
outcomes of this approach have no other role in the analysis or development of the Master
Plan for Mongla EZ.
As a whole, Bangladesh and Khulna division has witnessed substantial increase in number of Industrial
establishment, especially with the advent of increasing private sector participation in the region. Number of
industrial establishments in Bangladesh increased from 24,752 in 2000 to 34,710 in 2006 and further to 42,792
in 2012.This indicates growth at CAGR of 4.7% over the twelve year period. A similar analysis for Khulna
indicated a CAGR of 8.8% over the same period.
Table 64: Manufacturing establishment growth in Bangladesh and Khulna
Period 2000 2006 2012 CAGR
Number of Manufacturing Establishments59
Bangladesh 24,752 34,710 42,792 4.67%
Khulna 2,359 2,842 6,466 8.77%
The number of establishments for next 20 years (2015-2035) was projected based on this past growth witnessed
by Khulna (for the period 2015-20) and Bangladesh (period 2021-2035). Further these projected
establishments were converted to land area demand based on the land area requirement for each of the
establishments. In order to arrive at land area per unit of industrial establishment three methods have been
considered:
 Method 1 – based upon EPZ Land Utilization Trend

 Method 2 – based upon Land Utilization at Mongla EPZ
 Method 3 – based upon Survey results analysis
Based upon the above mentioned methods three different cases for land demand projections were developed:
Method 1- based upon EPZ Land Utilization Trend60: Method 1 is based upon land utilization trend
across 8 EPZ’s in Bangladesh under BEPZA, which comprises of total land area of 2,308 acres having 2,334
plots. Considering that proposed Mongla economic zone is synonymous to EPZ’s in terms of incentives and
attracting investors an average land area under each establishment has been estimated as 1.04 acres per unit61.
59 Survey of Manufacturing industries –SMI 2006 and SMI 2012, BBS

60 BEPZA website
61
Assuming an industrial unit will occupy only one plot. This is a conservative estimate, as in case of Mongla EPZ, it has
been observed that on an average, each tenant is occupying 3 plots.
Table 65: Bangladesh EPZ area and plots statistics under BEPZA
EPZ Mongla Adamjee Chittagong Comilla Dhaka Ishwardi Karanphuli Uttara
Zone Area (Acres) 255.41 245.12 453 267.46 356 309 209.06 213.66
No. of Units 190 229 501 238 451 290 255 180
Land Requirement 1.34 1.07 0.90 1.12 0.79 1.07 0.82 1.19
(Acres/unit)
Average Land
Requirement 1.04
(Acres/Unit)
Method 2 - based upon Land Utilization at Mongla EPZ62: Method 2 is based upon As-Is Land
utilization at Mongla EPZ. Closer look at Mongla EPZ indicated that out of total 190 plots, 96 plots have been
allotted till date with 31 investors investing in Mongla EPZ. This indicates that on an average 3 plots have been
occupied by each investor. Based on existing land utilization pattern at Mongla EPZ the average land area under
each establishment has been estimated as 4.16 acres per unit
Table 66: Land Utilization at Mongla EPZ

Zone Area (Acres) 255.41
Total No. of Plots 190
Allotted Plots 96
Total No. of Investors 31
No. of Plots Occupied/Investor 3
Average Land Requirement

4.16
(Acres/Unit)
Method 3-based upon Survey results analysis63: Method 3 is based upon land demand as indicated by
150 survey respondents the details of which are provided in section 3.7. Out of total 150 respondents surveyed,
102 respondents showed their willingness to align with Mongla, provided their demand for incentive structure
is met. The cumulative area as indicated by these prospective investors/tenants worked out to be 568.41 acres
(sum total of projected land demand of any particular type of industry, factored by probability of coming up of
that industry in Mongla EZ). On this basis, average land demand has been estimated as 5.57 acres per unit.
Through the above analysis of three different methods, different cases for land demand projection have been
developed and presented in the table below:
Table 67: Land area demand calculations based on macro approach

Period 2015 2020 2025 2030 2035
Projection of number of establishments in Bangladesh 49,068 61,640 77,433 97,273 1,22,195
Projection of number of establishments in Khulna 8320 12664 11700 14698 18464
1577 2400 2218 2786 3500
Projection of number of establishments in Mongla64
LAND DEMAND for industrial development in Mongla
62
BEPZA website
63 PwC survey results and analysis
64 The number of establishment for Mongla has been derived in the proportion land area in Mongla as a percentage of land
area in Khulna. The basic assumption has been that industrial development is expected to be uniform across Khulna
division. This is a conservative assumption, given the fact that industries would like to prefer Mongla relatively than any
other region in Khulna, due to proximity of Mongla port.
1,637 2,492 2,302 2,892 3,633

Mongla (Acre) : Method 1
6,565 9,993 9,232 11,598 14,569
8,788 13,377 12,359 15,526 19,503
Based on calculations from Method 1 (i.e. the minimum area requirement among all the three methods), the
land demand for industrial establishment is expected to increase from 1,637 acres in 2015 to 3,633 acres by
2035. On the supply side, total supply of land for organised industrial development, after including around 128
acres of vacant land in Mongla EPZ65 and the proposed Mongla EZ aggregates to around 333 acres. Thus, the
demand far exceeds the current supply in Mongla (even under minimum land area requirement case i.e. as per
Method 1), thereby establishing a fundamental business case for establishing the economic zone at Mongla.
65 BEPZA website
9.5. Budget Estimation for RAP

Budget estimate for the relocation of business units of PAPs
Cost for
Sl. Name Type of Area Type of material used dismant Cost for rebuilding (In BDT) Total for Grant
no property of the ling the rebuilding Total
busin house( (BDT) cost(BDT)
ess In BDT)
units(
Sq.ft.)
Roof Wall Floor Labor Labor Cost of roof Cost Cost for
cost cost (BDT/sq.) for wall
(BDT) (BDT) floor(B (BDT)
DT)**
1. Ruhul On lease 760 Thatched Bamboo Mud 10000 10000 42750 0 13920 66670 76670
Amin from Mongla sheet
Bepari Port
Authority
2. Abed On lease 900 Thatched Bamboo Mud 10000 10000 50625 0 16320 76945 86945
Bepari from Mongla sheet
Port
Authority
3. Mostofa On lease 418 Thatched Bamboo Mud 8000 8000 23512.5 0 9840 41352.5 49352.5
Bepari from Mongla sheet
Port
Authority
4. Abu On lease 429 Asbestos Asbestos Mud 8000 8000 0 0 11040 19040 27040
Kalam from Mongla
Port
Authority
5. Al-Amin On lease 360 Asbestos Asbestos Mud 8000 8000 0 0 9120 17120 25120
Sheikh from Mongla
Port
Authority
6. Rupali On lease 604 *Asbestos Asbestos/ Cement 10000 10000 3375 8500 2790 24665 34665
Begum from Mongla / bamboo
Port sheet
Authority thatched
7. Abdul On lease 459 *Asbestos Asbestos/ Mud 8000 8000 4218.75 0 3150 15368.75 23368.75
Khaleque from Mongla / bamboo
Port sheet
Authority thatched
8. Abdul On lease 518 Asbestos Asbestos Partially 10000 10000 0 36520 12240 58760 68760
Alim from Mongla cement
Hawlader Port
Authority
4448 72000 72000 124481.25 45020 78420 319921.25 391921.25
* Main structure and a separate kitchen

9.6. Financial Statements

9.6.1. Profit and Loss Statement
Year 2017 2018 2019 2020 2021 2022 2023 2024 2025 2030 2036
Revenue
Revenue from BT
Sale of Land Million - - - 8 106 127 122 131 141 205 319
Revenue from BT
Utilities Million - - - 26 398 472 508 548 590 854 1,333
Revenue from BT
Public Million
Transport - - - 2 31 42 46 49 53 77 120
Revenue from BT
EZ Service Fees Million - - - 2 45 60 65 70 75 109 171
Total BT
Million - - - 37.2 580.7 701.8 740.8 797.8 859.2 1,245.1 1,943.1
Expenditure
Different BT
expenditures Million - - - 26 363 404 435 469 505 731 1,141
EBIDTA BT
Million - - - 11.1 217.8 297.6 305.7 329.2 354.6 513.8 801.9
EBIDTA %
margin (%) NA NA NA 30% 38% 42% 41% 41% 41% 41% 41%
Depreciation BT
Million - - - 2.7 33.1 33.1 33.1 33.1 33.1 33.1 33.1
EBIT BT
Million - - - 8.3 184.7 264.5 272.6 296.1 321.4 480.7 768.7
Interest BT
Million - - - 9.7 136.7 127.1 113.8 98.5 79.0 19.1 8.2
Interest on BT
working capital Million - - - 0 1 2 2 2 2 3 5
Profit before BT
Tax (PBT) Million - - - (1.4) 46.9 135.7 156.9 195.6 240.3 458.5 755.7
Year 2017 2018 2019 2020 2021 2022 2023 2024 2025 2030 2036
Tax BT
Million - - - - - - - 9.9 22.8 117.7 207.6
Profit after BT
Tax (PAT) Million - - - (1.4) 46.9 135.7 156.9 185.7 217.5 340.8 548.1
PAT margin %
(%) NA NA NA NA 8% 19% 21% 23% 25% 27% 28%
9.6.2. Cash Flow Statement

BDT Million
Year 2017 2018 2019 2020 2021 2022 2023 2024 2025 2030 2036
Cash inflow
PAT - - - (1.4) 46.9 135.7 156.9 185.7 217.5 340.8 548.1
Depreciation - - - 2.7 33.1 33.1 33.1 33.1 33.1 33.1 33.1
Grant - - - - - - - - - - -
Equity 35.2 153.2 166.1 164.7 - - - - - - -
Increase in debt 82.1 357.4 387.5 384.4 - - - - - - -
Increase in working capital - - - 0.3 7.9 4.0 1.0 1.0 1.1 1.6 2.5
Total cash inflow 117.3 510.5 553.6 550.7 87.9 172.8 191.0 219.9 251.7 375.5 583.7
Cash outflow
Capital Expenditure 117.3 510.5 553.6 549.1 - - - - - - -
Repayment of debt - - - - 60.6 103.8 121.1 138.4 190.4 17.3 17.3
Increase in working capital - - - 0.4 11.2 5.7 1.4 1.4 1.6 2.2 3.5
Total cash outflow 117.3 510.5 553.6 549.5 71.8 109.6 122.5 139.9 191.9 19.6 20.8
Net Cash generation - - - 1.2 16.1 63.3 68.5 80.0 59.8 356.0 562.9
Opening Balance of Cash

and Bank Balance - - - - 1.2 17.3 80.5 149.0 229.0 1,186.6 3,792.6
Closing Balance of Cash
and Bank Balance - - - 1.2 17.3 80.5 149.0 229.0 288.9 1,542.6 4,355.5
9.6.3. Balance Sheet

Year 2017 2018 2019 2020 2021 2022 2023 2024 2025 2030 2036
Liabilities
Grant BT
Million - - - - - - - - - - -
Equity BT
Million 35.2 188.4 354.4 519.2 519.2 519.2 519.2 519.2 519.2 519.2 519.2
Reserves & surplus BT
Million - - - (1.4) 45.4 181.1 338.0 523.7 741.2 2,256.2 4,979.3
Long term loan BT
Million 82.1 439.5 827.0 1,211.4 1,150.8 1,047.0 925.9 787.4 597.0 173.1 69.2
Working Capital Loan BT
Million - - - 0.3 8.1 12.1 13.1 14.1 15.2 22.0 34.4
Total liabilities BT
Million 117.3 627.8 1,181.5 1,729.4 1,723.6 1,759.5 1,796.2 1,844.4 1,872.7 2,970.4 5,602.1
Assets
Land BT
Million 73.1 73.1 73.1 73.1 73.1 73.1 73.1 73.1 73.1 73.1 73.1
Fixed Assets BT
Million 44.2 554.8 1,108.4 1,657.5 1,654.8 1,621.6 1,588.5 1,555.3 1,522.2 1,356.4 1,157.5
Less: Depreciation BT
Million - - - 2.7 33.1 33.1 33.1 33.1 33.1 33.1 33.1
Net Block BT
Million 44.2 554.8 1,108.4 1,654.8 1,621.6 1,588.5 1,555.3 1,522.2 1,489.0 1,323.3 1,124.4
Net Working Capital BT
(Receivables - Payables) Million - - - 0.4 11.6 17.4 18.7 20.2 21.7 31.5 49.1
Cash and bank balance BT
Million - - - 1.2 17.3 80.5 149.0 229.0 288.9 1,542.6 4,355.5
Total assets BT
Million 117.3 627.8 1,181.5 1,729.4 1,723.6 1,759.5 1,796.2 1,844.4 1,872.7 2,970.4 5,602.1
Local disclaimer and copyright statements go here

9.6.4. Capex Schedule

Year 2017 2018 2019 2020 2021 2022 2023 2024 2025 2030 2036
Project Capex Phasing

Land Cost BT million 73.1 73.1 - - - - - - - - - -
Roads Culverts & Drainage BT million 277.0 7.6 92.3 92.3 84.7 - - - - - - -
Decentralized water supply BT million
Treatment & Distribution 163.8 4.5 54.6 54.6 50.1 - - - - - - -
Electrical Street Lighting & fire BT million
fighting 56.5 1.5 18.8 18.8 17.3 - - - - - - -
Telecom & Communication BT million
systems 39.7 1.1 13.2 13.2 12.2 - - - - - - -
Buildings - Industrial/Business BT million 532.8 14.6 177.6 177.6 163.0 - - - - - - -
Buildings - Commercial BT million 135.2 3.7 45.1 45.1 41.4 - - - - - - -
Buildings - Residential BT million 228.9 6.3 76.3 76.3 70.0 - - - - - - -
Buildings - MEP BT million 2.7 0.1 0.9 0.9 0.8 - - - - - - -
Sustainable infrastructure BT million
elements, RWH, summer storage
tank & greenery 4.5 0.1 1.5 1.5 1.4 - - - - - - -
Total Hard Cost BT
million 1,514.1 112.6 480.3 480.3 440.9 - - - - - - -
Interest during Construction BT million 4.8 30.2 73.3 108.2 - - - - - - -

Total Soft Cost BT
million 216.5 4.8 30.2 73.3 108.2 - - - - - - -
Total Project Cost BT

million 1,730.6 117.3 510.5 553.6 549.1 - - - - - - -
Project Capex Funding

Grant 0.00% - - - - - - - - - - - -
Balance funding from debt and
equity 1,730.6 117.3 510.5 553.6 549.1 - - - - - - -
Equity 30.00% 519.2 35.2 153.2 166.1 164.7 - - - - - - -

Debt
Commercial Loan (% share 50.00%
out of 70% debt) 865.3 58.7 255.3 276.8 274.6 - - - - - - -
Financial Institution Debt (% 20.00%
share out of 70% debt) 346.1 23.5 102.1 110.7 109.8 - - - - - - -
Total BT
Million 1,730.6 117.3 510.5 553.6 549.1 - - - - - - -


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PricewaterhouseCoopers Pvt Ltd which is a member firm of PricewaterhouseCoopers International Limited, each
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Feasibility Report of Mongla EZ

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Pre-Feasibility

1.1. Background ...............................................................................................................................................16

2. Understanding Bangladesh’s Economic landscape..............................................................................................19

2.1. Economic Overview of Bangladesh..........................................................................................................19

2.2. Doing Business in Bangladesh- Emerging Prospects .............................................................................31

3. Industries Assessment .......................................................................................................................................... 38

3.1. Framework for Industry Identification .................................................................................................. 38

3.3. Parametric Analysis of Bangladesh’s key Industrial sectors ................................................................. 46

3.5. Summary of sectors exhibiting growth potential................................................................................... 55

Bangladesh Economic Zones Authority

3.6.3.3. Improving the Ferry Service at Mawa ........................................................................................ 67

3.7. Industry Identification- Excerpts from the Survey................................................................................ 78

3.9. Land area uptake for Mongla EZ ............................................................................................................ 98

4. Proposed Master Plan and offsite infrastructure .............................................................................................. 106

4.1. Site Assessment...................................................................................................................................... 106

4.2. Bagerhat district – A profile.................................................................................................................. 106

4.3. Zone Definition .......................................................................................................................................133

Bangladesh Economic Zones Authority

4.3.1. Need for Zone Demarcation ...................................................................................................................133

4.4. Master Plan .............................................................................................................................................136

5. Social Impact Assessment ...................................................................................................................................170

5.1. Assessment of Social Impacts ................................................................................................................170

5.1.1. Objective of Social Impact Assessment (SIA) Study.............................................................................170

5.2. Abbreviated Resettlement Action Plan (ARAP)....................................................................................174

5.2.1. Project Affected People...........................................................................................................................174

Bangladesh Economic Zones Authority

6. Environment Assessment .................................................................................................................................... 177

8.1. Background .............................................................................................................................................197

9.1. Review of site and infrastructure enablers........................................................................................... 203

Bangladesh Economic Zones Authority

9.3.1.3. Light Engineering- Overview .........................................................................................................215

Bangladesh Economic Zones Authority

Bangladesh Economic Zones Authority

Figure 53 : Ranking of Incentive Categories based on % of total respondents ....................................................... 85

Bangladesh Economic Zones Authority

Bangladesh Economic Zones Authority

Bangladesh Economic Zones Authority

Table 58: Industry-wise usage norms ..................................................................................................................... 189

Bangladesh Economic Zones Authority

Bangladesh Economic Zones Authority

Bangladesh Economic Zones Authority

Bangladesh Economic Zones Authority

1.2. Objectives of this study

Key objectives of this study are -

 Prioritize and specify the required physical investments;

1.3. Approach and Methodology

Bangladesh Economic Zones Authority

Industry Identification for Mongla

Bangladesh Economic Zones Authority

GDP (USD Bn) Real GDP growth

Figure 1: Bangladesh GDP growth trend

Source: World Bank

In continuation of this growth story, Bangladesh’s Perspective Plan targets transformation of

Bangladesh Economic Zones Authority

48% 49% 49% 53% 53% 54% 48%

21% 25% 25%

30% 26% 26% 20% 19% 17% 15%

1990 1995 2000 2005 2010 2013 2021

Agriculture Industries Service

Source: World Bank

Figure 2: Split of GDP- Bangladesh

Within industries, on account of trade liberalization, investment de-regulations and improved

Figure 3: Actual investment v/s 6th FYP targets

Source: ADB Country Outlook 2014 (Bangladesh)