As compensation for the relocation, tannery owners are demanding Tk 250 crore, half of the amount as grants and the rest as 'loan without interest', sources said.

Their demands also include making the 'leather estate' a special economic zone with all the facilities enjoyed by the country's Export Processing Zones (EPZs), provision for easy exit of the 'weak' tanneries from the leather industries and special loan rescheduling facilities to other viable factories.

The tannery owners have placed their demands to the government through a report that three bargaining associations -- Bangladesh Finished Leather and Leather Goods Exporters' Association (BFLLEA), Bangladesh Tanners Association and Leather Goods and Footwear Manufacturers and Exporters Association of Bangladesh -- and heads of different ministries jointly prepared.

"Unless the government provides us with those facilities, it would not be possible for us to shift our factories from Hazaribagh to Savar," BFLLEA President Md Tipu Sultan said.

"We have narrowed down our demands to the minimum level. Now the government is to decide about the relocation."

There are at least 194 tanneries at Hazaribagh and they pour thousands of litres of untreated and highly toxic liquid wastes into the Buriganga River every day, posing a serious threat to the human and animal health, industries ministry sources said.

In view of the environmental and health hazards caused by the Hazaribagh tanneries, the government took up a project for the relocation of the tanneries at Savar on the city outskirts in 2003.

Arguing for tannery owners' demand for the compensation, Tipu Sultan said, "Total shifting of the tanneries would require an investment of Tk 5,400 crore. But with the existing set-up at Hazaribagh, we would be able to cover 25 to 40 per cent of the required investment."

"We still fall short of Tk 3,000 crore and to manage the huge investment we would definitely need government support," he said.

The government should make ways for 'easy exit' for the weak factories that are heavily indebted to the banks, and which is why are not viable in the long run. After the total relocation is over, the price of the land in Hazaribagh would definitely go up, argued Tipu, and then they would pay off the bank loans by selling the land and equipment.

Blaming bureaucratic red-tapism for the unusual delay in the relocation process, Bangladesh Tanners' Association President Harun ur Rashid said whereas the committee was supposed to submit its report within 90 days, it took four months to make the proposal.

According to industrial ministry sources 60 per cent preparation at the 'leather estate' at Savar has been taken while the to-do list includes the setting up of effluent treatment plants and water treatment plants.

It is unlikely that the tannery owners' demands would be met during the caretaker government's tenure as the government is busy with making arrangements for the upcoming polls and it has very little scope for paying attention to other matters, said a high official at the industries ministry.

The policy decision for tannery relocation was taken during the last government's period, he said.