Mongla Economic Zone, Bangladesh
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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. 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The reader agrees that PricewaterhouseCoopers Pvt Ltd., its Partners, Principals, Employees and Agents neither owe nor accept any duty or responsibility to it, whether in contract or in tort (including without limitation, negligence and breach of statutory duty), and shall not be liable in respect of any loss, damage or expense of whatsoever nature which is caused by any use the reader may choose to make of this report, or which is otherwise consequent upon the gaining of access to the report by the reader. Further, the reader agrees that this report is not to be referred to or quoted, in whole or in part, in any prospectus, registration statement, offering circular, public filing, loan, other agreement or document and not to distribute the report without prior written consent of PricewaterhouseCoopers Pvt. Ltd. and the World Bank. 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 PwC Page 4 of 228 Feasibility study of Mongla Economic Zone, Bangladesh 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.............................................................................................................................