The warehouses will push down the lead time in export to 60 days from the existing 90-120 days, placing Bangladesh on par with its rivals in the world apparel market to survive the post-multi-fibre arrangement fallout.

With the raw materials ready in the warehouses, the exporters will be able to slice off weeks from the time-consuming process for sample approval by buyers.

They suggested the warehouses be set up in restrictive areas of EPZs so that the government does not have to worry about tax dodging and inventory pilferage.

The exporters said such a warehouse might be set up as a private venture with permission to supply materials to units within and outside the EPZs. The government should give permission for setting up another bonded warehouse outside the EPZ if the central one performs satisfactorily.

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) meanwhile played down the opposition of textile and spinning industry owners, who warned that bonded warehouses for RMG raw materials would lead to closure of their units.

"Protecting a weaker sector at the expense of stronger one goes against the broader interests of the country," argued the BGMEA in a report to Prime Minister's Office recently.

The International Finance Corporation, The Asia Foundation, Gherzi Textile and the Centre for Policy Dialogue in their studies have identified the urgent need for central bonded warehouses for the highest foreign currency-earning sector, but the government is going the other way due to lobbying by spinners, the BGMEA alleged.

If the warehouses are allowed to operate, the RMG earnings will shoot up to $10 billion by 2007 from the present $5.5 billion as Bangladesh will then be able to grab a big chunk from the $55-billion jeans and school dress market, ensuring quick delivery, states the BGMEA report.

The BGMEA also pointed out that no paid-up capital would be required except for bank guarantee to set up the warehouses. Range of import will be determined by demand patterns to minimise stock lot risk, old inventory may be sold in local market on payment of customs duty and unsold stock of overseas suppliers may be re-exported, the report proposed.

The RMG manufacturers have long been demanding for central bonded warehouse facilities to increase their competitiveness in delivery time.

The government which earlier had caved in to the opposition from spinners and textile manufacturers, woke up to the reality at a time when the quota regime is only a few months away.

With international organisations portraying gloomy future of the Bangladesh RMG, the government only a few months back formed a national coordination council to bail out the sector.

The council, headed by Prime Minister's Principal Secretary Kamaluddin Siddiqui, asked the National Board of Revenue (NBR) to submit a report on how the warehouses can be set up and what should be the operating mechanism.

Two months gone, the NBR is yet to submit its recommendations. "To my knowledge, there is no progress to date. The NBR is yet to submit the report to the Prime Minister's Office," BGMEA President Annisul Huq told The Daily Star Monday.

The association, representing over 3,000 garment industries, will hold a press conference and presentation on the proposed warehouses in Dhaka on May 27 to press for its demand.

The BGMEA also wants the government to negotiate with the European Commission on relaxation of the rules of origin for Bangladesh's woven products.