10 new hi-tech parks allowed in pvt sector

Farhad Chowdhury : Bangladesh Hi-Tech Park Authority (BHTPA) has approved 10 more private parks in the last four years. Sector stakeholders have questioned the approval of private parks despite insufficient investment in government parks. Those concerned say that private companies are interested in declaring hi-tech parks to get business benefits and tax concessions.
A total of 92 government hi-tech and software technology parks have been approved in the country during last 15 years. A number of these parks have been prepared but there has not been sufficient investment in them.
The developer company appointed for the development of the hi-tech park is exempted from all types of income tax related to its business activities. As per the time limit, the exemption is 100% in the first 10 years, 70% in the 11th year and 30% in the 12th year from the date of commencement of business activities. Park declared establishments are exempted from import duty, regulatory duty, supplementary duty and value added tax. 80 percent VAT exemption for the company supplying electricity to the park and 100 percent VAT exemption for the supplier of goods for park development. At the same time, warehouse station facility has been given to the declared park. Through this, the industries established in the Hi-Tech Park will be able to import the raw materials used in the production of the company’s products, without paying the import duty, regulatory duty, value added tax applicable at the time of importation, under the bond system. Besides, VAT and customs duties have been waived at various levels on the import of duty-free vehicles, capital equipment, and construction materials.
When asked about the announcement of the private hi-tech park, the secretary of information and communication technology department said. Samsul Arefin told, “The ICT department is announcing the hi-tech park to encourage more productive, export-oriented companies in the country. If they are not provided with this facility, they will not be able to increase the domestic production on the one hand, and on the other hand, there will not be enough employment. In the coming days, we are thinking of exporting hardware as well as software. Due to which our companies should be made competitive in the international market with adequate facilities. For this reason, I am declaring private sector institutions as hi-tech parks.
Those concerned said that these hi-tech parks are being announced to facilitate mobile and electronic product manufacturing companies. Those who have been approved to operate in private hi-tech parks are major market participants. These hi-tech parks are declared nominally. Actually, new investment is not likely to come in these private parks.
According to BHTPA data, 10 institutions have received approval for Hi-Tech Park declaration. Seven of these companies are involved in mobile assembling and manufacturing. Mobile manufacturing companies include Alamin & Brothers, Edison Industries Limited, Best Tycoon (BD) Enterprises Limited, Lynx Electronics Bangladesh Limited and Anira International. Electronic product assembling and manufacturing companies include Butterfly Manufacturing Co. Ltd. Mobile phone assembling and electronics manufacturing companies include Fair Electronics, Walton Digi-Tech Industries Limited and Walton Hi-Tech Industries Limited. City Hi-Tech Park Limited, a company of City Group, has been approved as the developer.
A BHTPA official said that the government is giving special facilities for hi-tech parks. Companies are taking approval of hi-tech parks for one year, three years, five years and 10 years to take the benefits provided by the government. The government has given the facility of hi-tech park to attract new investment, but the announcement of this park is coming to get new benefits from the old investment. On the one hand, tax benefits are being given to assembling mobile and electronic products. On the other hand, the benefits are increasing due to the announcement of Hi-Tech Park. As big companies get bigger, smaller partners have to compete with the big ones to survive.
The Bangladesh Hi-Tech Park Authority Act was enacted in 2010 for the sustainable development of information technology and hi-tech industry in the country. Since the formation of Bangladesh Hi-Tech Park Authority in the same year, initiatives have been taken to build 92 Hi-Tech Parks, Software Technology Parks, Incubation Centers supported by the government. Many of these initiatives have yet to see the light of day. Not enough investment is coming even in completed projects.
According to the Bangladesh Hi-Tech Park Authority, the government has so far taken the initiative to build 16 Hi-Tech Parks, four Software Parks, 71 Sheikh Kamal and Incubation Centers and one Frontier Technology Park (total of 92). Out of these 25 projects have been declared as parks. Among these seven projects including Bangabandhu Hi-Tech City in Kaliakore, Bangabandhu Sheikh Mujib Hi-Tech Park in Rajshahi have started. Even though the park is ready, the main target foreign investment is not coming, even the domestic investment is not enough.
According to the data of Bangladesh Bank, in the last one and a half decade, foreign investment in the information technology sector of the country has come only to $180 million. The authorities do not have information about all the investors in the Bangabandhu Hi-Tech Park in Kaliakore, a priority project among the parks. Many organizations have repeatedly asked for information about this, but have not been able to get it. Only 31 institutions have specific investment information. IT Hub Industries Limited has invested a minimum of Tk 55 lakh out of this. There are 19 companies that have invested from Tk 5.5 lakh to Tk 49 crore. Apart from this, the investment of four institutions ranges from Tk 50 to Tk 99 crore. Only eight companies have invested more than Tk 100 crores.
Apart from Kaliakor, the construction of two hi-tech parks in Sylhet and Rajshahi has been completed. A small number of organizations are operating in the parks. Investors showed interest in the beginning but it decreased day by day. After allocating land or floor space, they are not making new investment to start production. Hi-tech parks have been allocated a huge amount of space so far, but it remains unused. The government has been approving private hi-tech parks for four years.
Two officials of BHTPA, who did not wish to be named, said that the Hi-Tech Park Authority works for the management and maintenance of the parks, but the Ministry of Information and Communication Technology is giving its approval. When an application comes to the Hi-Tech Park, the application is scrutinized and sent to the Ministry. From there it is checked again. They approve the park.
When asked about the approval of so many hi-tech parks in four years, managing director of BHTPA GSM Zafarullah said, ‘Hi-tech parks are announced based on the application of the institutions. After an institution’s approval is announced, its competitors usually express interest. Most of the companies in the IT sector have been established in the last three to five years. The current government is giving more importance to the IT sector. The number of institutions in this sector will increase. At the same time, investment will also increase.
It should be noted that Prime Minister Sheikh Hasina has encouraged the announcement of private hi-tech parks.
GSM Zafarullah also said, ‘The Hi-Tech Park Authority is working to develop the Information Technology (IT), Software and Information Technology Services (ITES) sector and create an investment-friendly environment. The government is providing various facilities to further expand this sector. Approval of private hi-tech parks is one of them. These institutions get various benefits. BHTPA expects that any benefit from the government will generally be passed on to consumers.
According to the data of Bangladesh Bank, in the fiscal year 2020-21, the computer services sector in the country exported products worth $30.38 million. In the fiscal year 2021-22, it increased to $608.60 million. The next year in the fiscal year 2022-23 decreased to $54.98 crore. Computer services sector includes customized, non-customized computer software, data processing and hosting services, consultancy services, installation, maintenance and repair etc. However, no information on the export of hardware products was found at this time.