Prefeasibility Report Dhaka SEZ Bangladesh Economic Zones Authority Submitted to Bangladesh Economic Zones Authority 30 November 2016 Contents Contents ........................................................................................................................ 2 Disclaimer ...................................................................................................................... 5 Executive Summary ........................................................................................................ 6 Abbreviations ............................................................................................................... 12 1 Introduction ............................................................................................................. 13 1.1 Background ............................................................................................................................................................ 14 1.2 Dhaka District ........................................................................................................................................................ 16 1.3 Keraniganj .............................................................................................................................................................. 18 1.4 Project Site and Off-site Infrastructure ................................................................................................................ 20 1.5 Transport Connectivity Assessment ..................................................................................................................... 25 2 Approach and Methodology .................................................................................... 31 2.1 Basic Philosophy Adopted for the Assignment .................................................................................................... 32 2.2 Inception ................................................................................................................................................................ 32 2.3 Component 1: Competitive Advantage and Industry Assessment ..................................................................... 33 2.1 Component 2: Master Planning, Infrastructure, and E&S Footprint .................................................................. 42 2.2 Component 3: Institutional Framework ............................................................................................................... 43 2.3 Component 4: Economic and Financial Modeling ............................................................................................... 44 2.4 Structure of the Financial Model .......................................................................................................................... 45 2.5 Financial Statements ............................................................................................................................................. 48 3 Economic Scenario of Bangladesh ............................................................................ 50 3.1 Growth ................................................................................................................................................................... 51 3.2 Vision 2021 ............................................................................................................................................................ 52 3.3 Bangladesh’s Industrial Performance and Trends ............................................................................................... 53 3.4 Foreign Trade ........................................................................................................................................................ 59 4 Bangladesh Competitiveness Analysis -Prospects of Investment in Bangladesh Economic Zones ........................................................................................................................... 62 4.1 Private Sector Investment .................................................................................................................................... 63 4.2 Foreign Direct Investment .................................................................................................................................... 63 4.3 Domestic Investment ............................................................................................................................................ 64 4.4 Emerging Prospects ............................................................................................................................................... 65 4.5 Factors Inspiring Confidence ................................................................................................................................ 69 5 Competitive Analysis and Industry Assessment ........................................................ 70 5.1 Industry Assessment ............................................................................................................................................. 71 5.2 Nature of the Zone with Respect to Suitability of Industries .............................................................................. 85 5.3 Competitiveness Analysis of the zone .................................................................................................................. 86 5.4 Demand Forecast .................................................................................................................................................. 98 5.5 Demand Survey ................................................................................................................................................... 103 5.6 Investment Promotion Strategy ......................................................................................................................... 107 2 6 Master Plan and Offsite Infrastructure ................................................................... 126 6.1 Master Planning Considerations......................................................................................................................... 127 6.2 Land Use Pattern within the Zone ...................................................................................................................... 130 6.3 Onsite Infrastructure ........................................................................................................................................... 134 6.4 Offsite Infrastructure .......................................................................................................................................... 152 7 Environmental Footprint ........................................................................................ 159 7.1 Hydrography ........................................................................................................................................................ 160 7.2 Meteorological Status ......................................................................................................................................... 161 7.3 Seismicity ............................................................................................................................................................. 164 7.4 Ambient Air Quality ............................................................................................................................................. 165 7.5 Noise Levels ......................................................................................................................................................... 166 7.6 Ground Water ..................................................................................................................................................... 166 7.7 Biological Environment ....................................................................................................................................... 168 7.8 Anticipated Environmental Impacts Due to Project Implementation .............................................................. 168 7.9 Disaster Risk Management ................................................................................................................................. 170 8 Social Footprint ...................................................................................................... 171 8.1 Socio-Economic Conditions of the People and the Project Area ...................................................................... 172 8.2 Potential Social Impacts ...................................................................................................................................... 175 8.3 Compensation Entitlement ................................................................................................................................. 176 8.4 Stakeholder Consultation ................................................................................................................................... 180 9 Institutional Framework ........................................................................................ 183 9.1 Institutional Framework of the Authority .......................................................................................................... 184 9.2 Institutional Options for the zone ...................................................................................................................... 185 9.3 Comparison of Options ......................................................................................................................................