An evaluation of bscic industrial estates
The evaluation of BSCIC estates covers various aspects of an estate that needs to be considered, such as plot allocation and utilization, occupancy rate, estate turnover ratio, estate management, estate revenue generation, firm performance etc. A total of 10389 plots was developed in 74 estates, 96.8% of which were being allotted to entrepreneurs. About 22% of the allotted plots remained unutilized (the rate is 27% including the un-allotted plots). The low utilization is a culmination of several factors, including weaknesses in enforceability of rules and regulations, problems in the selection process of entrepreneurs while allocating plots, infrastructure bottlenecks (gas/electricity connection) etc. The existing estates provide about 0.56 million employments with negligible growth over time. Despite stagnant employment, production has been growing at a rate of 10% annually, indicating increased productivity of the firms. Analyzing the performances of firms operating under the estates, we find that their performances are comparable to the performances of SMEs at a national level and in some cases, BSCIC estate firms’ performances are better than those that are located outside the estates. The better performance of BSCIC estates can be attributed to the agglomeration of businesses, which created various opportunities to share risks and returns.
The study identified several problems or difficulties that the BSCIC estates are now facing which need to be resolved on an urgent basis for the sake of better industrialization. First, there is an overwhelming proportion of plots (over 22%) that are unutilized (the rate is 27% including un-allotted plots). Second, poor maintenance of infrastructure inside the estates is another problem which is related to fiscal constraints of BSCIC, and partly due to the centralized system of decision making process. Third, the absence of a dedicated gas and electricity supply and dynamism in the decision making process also hampers proper functioning of the industrial units. Therefore, BSCIC should give utmost importance to recover unutilized plots and ensure their proper utilization. In many of the estates, gas and electricity connections are not dedicated and therefore, the estates do not generate adequate leverage to entrepreneurs. A big investment may be needed to ensure uninterrupted electricity and gas supply in BSCIC estates. Otherwise, the benefits of industrial estates would not be adequately tapped. If necessary, BSCIC may consider organizational restructuring to bring dynamism in the industrial estate management. Furthermore, we recommend that BSCIC may think of carrying out a rigorous cost-benefit analysis of BSCIC industrial estates in order to grasp future sustainability of the estates.