BANGLADESH ECONOMIC ZONES AUTHORITY

PERFORMANCE ASSESSMENT:
PRELIMINARY FINDINGS, BEST PRACTICES, AND
RECOMMENDATIONS

JEAN-PAUL GAUTHIER, SENIOR EZ LEGAL & INSTITUTIONAL ADVISOR, WORLD BANK

 Contents

• BEZA Objectives and Results Framework Assessment

• EZ Regulatory Authority Organizational Best Practices and

BEZA Assessment

• BEZA Organizational Staffing and Functions

• One-Stop Shop / Investor Services Best Practices

1
BEZA Objectives and Results
Framework Assessment
BEZA Objectives
100 Economic Zones (EZs), on 30,000ha, employing 10M people and fostering
US$40B in exports, by 2030

• 74 EZs already approved by Governing Board

• Approx. 90% of space is planned to be in public zones and 10% in private ones

• Top priority: 30 EZs of 500+ acres each in Mirsharai over 15 years (receiving
substantial funds from government and interest from developers)

Questions for Consideration:

• Is the goal of 100 EZs (with more public serviced land) in accordance with BEZA’s
stated mandate, Vision, Mission and Values (e.g., world-class investment promotion
& service provision; customer satisfaction; PPP promotion; etc.)?

• Is it possible for BEZA to handle the workload, based on resources?

Recommendation:

• Develop a formal BEZA Strategy & Action Plan, linked to its Vision, Mission, Values
and Resources, and to Sub-Goals and Performance Indicators
BEZA Vision and Mission –Assessment
Vision: “…to become a sustainable development driving force and world class
investment promoter and service provider”

• Questions: Did you know this was the Vision (i.e., is it shared,
communicated)? Does it inspire, persuade, and connect with you and with
“people”? Does it convey passion, energy, values and a philosophy? Which
client value(s) does it evoke? Are resources aligned with its elements (e.g.,
investment promotion)? What would the EZ developers say?

Mission: “…create value for the investors by establishing attractive investment

facilities in the EZs through OSS and competitive incentive packages”

• Questions (in addition to those above): Does it indicate why we are unique or
special (e.g., relative to BEPZA, HTPA, foreign choices)?
BEZA Objectives – Assessment
• Should BEZA’s “Objectives” and “Main Functions” deal with the following, stated
nowhere in the Vision or Mission:
• Industrialization (mentioned 5 times in the Main Functions)?
• But also: Agro, trade, tourism (possibly a contradictory objective)?
• Backward linkages and things “outside of Economic Zones” (mentioned 4 times,
not counting references to population, GNI pc, and DT sales)?
• But also FDI (possibly contradictory objectives)?
• Relocation?

• Should they not be dealing with:

• FDI targets?
• Reduction of time and cost of doing business?

• Are they “SMART” (i.e., Measurable, Resourced, Relevant to Mission; Time-bound)?

• Do they tie to a “Results/Milestones Path,” with:

• measurable sub-objectives?
• performance indicators?
The Results Path (Milestone Plan)

• Focuses on results which are directly linked

to defined goals/ objectives

• Uses a top-down approach...“layered

planning” approach

• Based on “rolling wave” concept (rolling

plans)
Performance-Driven Organizational
Management -Assessment
POSITIVE FINDINGS:

• Final Mongla EZ PPP License issued and development works ongoing, with various sub-project at 20%
to 75% completion

• 11 Private Pre-qualification Licenses issued

• Selection of a Developer for Mirshorai Phase-1 completed, with Draft PPP Agreement prepared

• G2G MoU signed with China Harbour Engineering Co. Ltd.

• Selection of developer for Shreehatta EZ in process

• 21 Initial Site Assessments prepared

• 5 Feasibility Studies and Master plans approved, with 1 more in process

• Last-mile public infrastructure MoUs signed with DPHE, Titas Gas, PGCB,BWDB, REB

• Appointment of Consultancy Services firm for pre-feasibility studies of 5 EZs in process

• Interim pre-feasibility study reports on 4 EZs submitted and Final Reports in process

• EIAs of Jaliardip and Sabrang EZs being revised; EIA of Anwara-2, Dhaka SEZ, Narayangonj EZ
being reviewed; EIA of Mirshorai-2 EZ is in process of approval by WB and DOE
Performance-Driven Organizational
Management -Assessment
NEEDS:
• Strategic Planning, including in particular a Milestones-based Action Plan
• Client-focused instead of manager-focused culture and systems, including
• Formal client feedback loop to contribute inputs to BEZA Vision, Action Plan,
Services, officer duties
• Time management culture / techniques
• TQM (quality work, customer focus, strategic approach, continuous
improvement, teamwork)
• Lean Six Sigma (efficiency, consistency, M&E, HRD, continuous
improvement)
• PDCA Lifecycle (planning, M&E, continuous improvement)
• Aligned and Streamlined SOPs (e.g., Approval of developer licenses currently
involving 3-4 stages)

See “Organizational Performance Engineering” Presentation for best

practice information on management and organizational efficiency
EZ Regulatory Authority
Organizational Best Practices
and BEZA Assessment
Best Practices in EZ Governance

•Dedicated gov’t •Gov’t agency or gov’t

Investment Promotion Agency

EZ Developer

EZ Regulator

End Users / Tenants

•Private-sector firm or a agency ensuring owned company •Private business
PPP Joint Venture regulatory dedicated to owners
environment is more •Buy or lease plots
•Could own EZ, co-own it streamlined and
marketing the EZ to
with gov’t, or be efficient than national
developers and •May form users
contracted by gov’t one
investors association or have
•Finances, designs, plans, •Can also act as a equity (in co-op
•Often consolidates public “EZ model)
and manages gov’t functions and
development of Development Corp” •Responsible for
administers them to ‘kick-start’
infrastructure and facilities through a one-stop complying with terms
•Subcontracts for discrete development if of their agreements
shop necessary with
construction and other with the
•Designates land as public funds when developer/operator
tasks (waste removal and EZs
treatment, maintenance, projects are not and abiding by all
security, etc.) •Licenses developers, bankable regulations and
operators, and •May be responsible procedures of the
•Manages day-to-day enterprises
service provision for providing/ regulator, including
•Coordinates all connecting anti-speculation
•Markets and leases or public agency inputs; infrastructure outside provisions,
subleases land and/or
buildings •Monitors and the gate of the EZ to mandatory
enforces compliance the infrastructure inspections, and
inside the EZ bookkeeping
requirements
Characteristics of Best Practice EZ
Regulatory Authorities
• Autonomous government authority directly under the Cabinet, Prime Minister, or
President
• Has authority over other government agencies with regard to EZ developers, operators,
and users in key areas.
• Autonomy over human and financial resources: flexibility over hiring and termination of
employees, ability to offer competitive pay, ability to procure contractors easily, and
financial independence with dedicated budget.
• Private-sector standards for customer service
• Focused primarily on regulation, not on investment promotion or development, which are
carried out by other public and private-sector entities
• Corporate organizational structure – e.g., with a board of directors providing oversight,
a managing executive leading day to day functions, and various departments.
• Board of Directors can include: cabinet officials most relevant to the zones, such as
Industry, Labor and Finance/Economy; regional/state and municipal officials; and private
sector representation.
Functions of Best Practice EZ Regulatory
Authorities
•Legal authority over financial and human resources
•Legal authority to perform a wide range of government functions itself
•Facilitates functions performed by other government entities under MOUs
•Provides EZ users with one-stop access to all government and business services, including:
•Investment licensing and registration
•Construction permits
•Designation of new EZs, selection of developers, and approval of master plans
•Expatriate services / work visas
•Environmental permitting and monitoring
•Labor monitoring and compliance
•Dispute / complaint resolution services
•Tax compliance
•Customs clearance
•Utilities
•Business support services (i.e., notary, legal services, accounting, financial advice, ICT, etc.)
Typical Organization for an EZ Regulator
BEZA Organizational Chart
Organizational Design Assessment
POSITIVE FINDINGS:
• Organogram consistent with best practices
• Effective development of collaborative working relationships
• e.g., The Ministry of Road, Transport, and Bridges, the Ministry of Water Resources (for
drainage), the Ministry of Power/Energy and Natural Resources, etc. are all beginning to
deliver results for BEZA in the Mirsharai project

NEEDS:
• Mechanisms to enhance institutional independence
• Mechanism to prevent influence in the allocation of BEZA’s planned 40,000 ha land bank
• Review of PMO appointment of BEZA legal officers
• Study delegation of PMO decision-making power to the Executive Chairman or waiver system, for
expenditures above 240 crore (10 million) Taka (e.g., US$30.3M) –perhaps tripling the cap

• Streamlining of onerous processes & numerous requirements for Prime Minister’s Office (PMO)
sign offs – leading to inefficiency and delays
• e.g., long internal chain within PMO, often involving clerk, officer, director, DG, Secretary, and
state minister approvals

• Regulator and Developer/Operator Functions should be separated

BEZA Organizational Staffing
and Functions
General BEZA Human Resource
Management (HRM) Assessment
POSITIVE FINDINGS:
• General capacity at Manager level and above

NEEDS:
• Annual staff management-by-objective (“MBO”) matrices, with
associated rewards and sanctions
• Task Attribution System
• HRD Plan to create in-house manager-level expertise by 2021, when
the PSDSP sunsets
• Enabling Environment: Suitable office space arrangements, including
kiosks for use by visiting investors, vending machines, smoking corner,
suitable rest rooms, etc.

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Planning for Implementation
Process of assigning activities required in order achieve objectives,
designating responsibilities and enabling M&E:

Project
2.0 Goal

2.1 Sub-goal Goal Goal Goal

2.1.1 Activity
Sub-goal Sub-goal Sub-goal
2.1.2 Activity
Activity Activity
2.1.3.1 Task

2.1.3.2 Task
Task Task Task
2.2 Sub-goal

*Coopers & Lybrand, Goal Directed Project Management

Current Staffing
• 72 members of staff
• Staffing incomplete due to past budget limitations (intended to generate revenue to cover staff
salaries and perquisites)
• 2 permanent staff – assistant manager and cashier
• 21 deputized regular civil servants, on rotations of 1-3 years
• Government-appointed managers, GMs, and EMs (approx. 14 of the 21)
• Limited capacity below managerial level (e.g., in the approx. 7 deputized clerical staff)
• Gaps in in-house specialized manpower, especially in engineering, marketing, and operations
• 16 contracted “project experts” (e.g., functional professionals), in finance, legal,
infrastructure, environment & social, procurement, M&E, and administration [1 lawyer, 4
engineers, 5 accountants, 1 architect, and 5 “technicians”/“diploma engineers” (assistant
engineers)]… although no experts in marketing
• PSDSP Consultants scheduled to work until June 2019 or, at the latest, January 2021
• Rest are on annual contracts
• Approx. 35 Outsourced support staff (clerical, drivers, cleaning, etc.)
• 4 Project Directors + a 5th coming on board:
• 2 project directors for land acquisition (part of permanent team, but not on organogram)
• 2 project directors for PSDSP (not part of permanent team or organogram)
• 1 for the planned Japanese Economic Zone, funded by JICA (not part of permanent team or
organogram)
Planned Staffing
Up to 183 staff planned (including approx. 111 new staff) –at HQ and in the zones
• Perhaps 50% of new staff will come through deputation.
• Approx. 30 new staff to be mid-level (so approx. 81 will be managers and above)
• Some mid-level staff will be direct hires, hired at market rates under the BEZA HRD
Policy, and then internally promoted

Eventually, BEZA plans to have:

• 3-18 staff in each public zone, including at least:
• 1 high-level appointee (GM or Joint/Zone Secretary)
• 2 environmental staff
• 1 social counsellor (contract staff)
• A Regional Office with 100 staff in Mirsharai for the 30 Ezs
• No BEZA staff are to be placed in the private zones, just Customs personnel –
based on the experience of the Korean EPZ in Chittagong and India’s SEZ model

• A single online one-stop shop is planned

Staffing Assessment
• Directly contracted Functional Professionals and PSDSP Project Consultants
currently handling bulk of managing – from rules making to development. Other
Managers are deputized. There will soon be no institutional memory ->
• Recruitment policy and rules should be changed to allow for contracted specialized
staff to be retained
• Change rules to allow retired former deputized staff to return as Managers
• Find way to hire from the private sector and not just from the civil service
• Urgently Deal with critical staff gaps: Supervising Engineer; Environment & Social
Safeguards Experts and Monitoring Unit; Etc.
• Reconsider “no-staff” approach for private zones, based on Korean zone’s
government service gaps – may need 3-4 staff in each private zone
• Reconsider lack of one-site OSS in each zone

See “EZA HRM and Culture” Presentation for additional, best practice information
on EZA staffing
Official “Charter of Duties of BEZA
Officials”
Includes Job Descriptions for:

• Executive Member –Admin & Finance (A&F)

• GM –A&F
• Manager –A&F
» Assistant Manager –Admin.
• Manager –Finance & Budget (F&B)
» Assistant Manager –F&B

• Executive Member –Investment Promotion (IP)

• GM –IP
• Manager -IP

• Executive Member –Planning & Development (P&D)

• GM –P&D
• Manager –P&D
• Manager –Law
• Manager –MIS & Research

• Secretary
BEZA Staff Duties Assessment
The existing of this Charter is a very positive indicator of as regards HRM planning

However, some aspects of it should be improved:

• It only covers the descriptions of 15 positions –whereas there will soon be 183
members of staff
• Should the Manager for MIS & Research really be the same person, where the
required skill-sets are so distinct?
• Should the Manager for MIS & Research really be responsible for recommending
industries for EZ?
BEZA Draft 2016-2019 Training Plan

SI Name of Training Jun-Dec Jan-Jun Jun-Dec Jan-Jun Jun-Dec Jan-Jun

2016 2017 2017 2018 2018 20-2019
1 EZ Development & X X X
Management
Cycle
2 Procurement X X
3 Contract X X
Management
4 OSS X X
5 E&S Compliance X X X
6 Fire Safety X X X
7 N/A
8 Marketing X X X X
Training Needs Assessment
Identified Needs:
• Some staff members have limited knowledge of general issues, such as the nature of EZs
• Marketing
• Evaluation of feasibility studies
• EZ Financial Analysis / EZ operating costs and revenues
• Legal –EZ Contracts, tendering and procurement, and PPPs
• Operating public EZs / SOPs
• One-stop shops / Applications Processing
• Environmental & Social Safeguards and Management / CETPs
• Contract Management
• Monitoring and Evaluation

Training modalities:
• On-the-job, through visiting experts coming to work alongside in BEZA offices, for first 5 years
• 3-15 day study tours in zones abroad, such as India, including:
• Embedded, “learning-by-doing” study tours
Training Needs Assessment: Next Steps
• Conduct structured, in-depth, general Training Needs Assessment, as no such
“formal” TNA has yet been done
• Address inefficiencies with the way personnel are selected for training
• Selection has sometimes been given as staff incentive
• Sometimes, people leaving within 6 months (such as deputized staff on
rotation or scheduled for retirement) are the ones receiving training, which
does not help with knowledge retention / institutional memory and application,
and presents budget challenges
• See also recommendations on staffing & hiring approach
Research Unit Assessment
Positing Findings:

• Management is capable for the moment

• Finances are sufficient for the moment

Needs:

• SoP and checklists on how to identify and select EZs for designation

• Human resources and know-how to conduct market research needed to

implement a market-adaptive strategies

• HR and ICT Capability/Readiness assessment

Planning Assessment
Positing Findings:

• Vision, Mission, Objectives and Values Statement have been developed (although
they could be perfected)

Needs:

• Understanding of “planning” is too narrowly focused on development works. Should

also include strategic and organizational planning, i.e.:
• Plan indicating what BEZA aims to be in 5 years, 10 years
• Guidelines on how BEZA will achieve its objectives (no organized Gantt chart or
strategic plan specifying who does what and when)
• “Rolling” phase-by-phase BEZA program and project Gantt charts

See “Strategic Planning” Presentation for more information on planning best

practices
Financial Analysis and Accounting
Assessment
Positing Findings:
• Maintain accounts and process payments (Imprest Account) using Excel – may
move to customized software
• Last government audit was 2012, but there is management audit accountability
Needs:
• Strategic planning (how many zones and by when)
• Planned new staff requires more budget resources
• No Accounting Plan and no accounting software. 3 current or planned Revenue
Streams suggest need to move to ERP when budgets exceed US$ 100 million:
• PSDP project funds – relatively modest
• Government funds – slated to sunset
• BEZA services funds (through OSS) - expected to grow as BEZA matures
• Training on World Bank financial reporting requirements
Management Information System
Assessment
Positing Findings:

• BEZA has the following ICT assets and infrastructure:

• 70 desktop and laptop computers (mostly Dell and HP)
• Formal local LAN, migrating to a Central LAN
• Several multifunctional shared network printers
• Cloud-based website and email server
• Whole-office WIFI coverage
• Polycom 700 Videoconferencing system
• Temporary server
• Small, specialized, remotely-managed Digital Display Management System (DDMS)
• CCTV cameras and smart-card badging security system
• Cloud-based server for OSS – planned to be accessible through www.beza.gov.bd

• Plans to deliver 6 initial investor services through the OSS tool (with later plans for 30) - relying
upon a “4RD” (Regulatory Desk) module involving an application check RD, a recommendation
RD, and approval RD and, in some cases, a finances (i.e., fees check) RD
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MIS Assessment (Cont’d)

Needs:

• Clarity on whether any MIS solutions introduced now will be used when new
staff are brought in

• Integration of Finance, HR, and CRM, through a single ERP package

• Project management solution / PMO Portal platform

• Staff PMO training (the plan is to train just 6 people)

• New permanent staff, including:

• Systems Administrator
• Network Administrator
• Career track for IT-MIS personnel under the new organogram
EZ Designation/Selection Processes
Assessment
Positing Findings:

• Per BEZA Rules, private EZ initiatives have so far included strong foreign investor
(e.g., Sumitomo, Magna, etc.) partners in joint ventures

Needs:

• Clarity on why and how EZs should be designated, and best practice principles and
procedures to follow in this regard
• Capacity on appropriate factors for designating high-tech sector EZs
• Improved skills and possibly procedures regarding social (e.g., environmental,
social, and labor) safeguards
• Streamlined evaluation and selection procedures for developers, and related
documentation

• Capacity to select prospective developers and to structure PPP agreements on a

best practices basis
 Developer Approval Procedure

CCEA
Proposal Executive Law Ministry BEZA signs
PMO vetting approval of
Evaluation Board Negotiations vetting and developer
and approval developer
Committee Approval approval agreement
agreement
Investment Monitoring / Contract
Management Assessment
Positing Findings:

• Currently performed by GM of Planning with substantial help from the PIU Committee (including 2
engineers and 1 architect from BEZA)

• Involvement of the Developers themselves

Needs:

• Organization moving faster than its capacity allows – multiplicity of projects slows delivery– need to
reduce number of planned zones to better reflect capacity constraints

• Stronger concession agreements and improvements to the procurement process (e.g., greater capacity
for contract negotiation, enhanced sanctions on developers in providing design documents &
performing works, etc.)

• Permanent BEZA staff engineers and Permanent monitoring set-up

• Improved contract management skills

• BEZA efficiency and time management improvements (e.g., change in culture of granting project
extensions for 1st, 2nd, and 3rd revisions)
Investment Promotion Assessment
Positing Findings:
• Currently performed by 3 people: Executive Member Investment, GM of Investment Promotion, and Manager of
Investment promotion. Project consultants help team when specific events take place. Team also draws upon
help from the BEZA Administrative Wing.
• Investment Promotion techniques include roadshows, workshops and seminars in Bangladeshi cities and
abroad, on Website and in Bangladeshi dailies
• Content is focused on policy offer (e.g., incentives, etc.)

• Executive Board meets 1-3 times per month to make land allocation decisions
Needs:
• More permanent staff / Unit responsible for developing marketing strategy and materials (with budget)
• Sector/Investor targeting training
• Marketing materials’ content should be expanded to Bangladesh EZ Value Proposition and USP, and the market,
for each distinct EZ opportunity
• Investor approval decisions delegation by Executive Chairman (plans for delegation to the Executive Board once
tariffs are set by the Governing Board do not go far enough)
• Formal investment approval criteria and procedures, and land lease tariffs
• Currently determined by the Governing Board on a batch-by-batch basis (10-15 investors at a time) every 4-
12 months
• Land is being marketed at unsustainably low rates

• Formal CRM system (application information is currently collated manually and compiled into MS Excel lists at the
zone level)
Investor Services Assessment
Positing Findings:

• New draft OSS Act under review

• OSS to provide 28 online services from 23 ministries, which will deputize at least one person to
the BEZA HQ or in-house

• OSS hardware (2 servers, networking, and operating platform) procured and a vendor has been
contracted for 5 of the proposed 28 online services: project clearance, import permit, export
permit, visa, and work permit.
• Vendor works on the basis of shared fees
• Cloud / web-based system planned

Needs:

• One-stop shop service (OSS) must still be established -Investors must visit various entities at
the city and national level separately to obtain approvals
• Service delivery will require legal amendments
• SLAs have not been successful, because best practice solutions have not been implemented
• Training (15-20 days induction, and embedding in oversees well-functioning OSS for 2-3 months
• OSS front end and back office personnel – including approx. 50 ministerial liaisons, 9 ICT back
office team members, and 3 ICT and front office staff in each EZ
BEZA VIRTUAL OSS

39
BEZA VIRTUAL OSS (CONT’D)
BEZA VIRTUAL OSS (CONT’D)
BEZA VIRTUAL OSS (CONT’D)
One-Stop Shop / Investor
Services Best Practices
OSS Ideal: Centralized Service Delivery
OSS Best Practice: Multi-Channel
Service Delivery
OSS Best Practice: Account Executives
One effective feature some EZ one-stop shops have provided is Account Executives.
Account executives:
• Are dedicated to serving the needs of specific EZ users
• Serves as a single point of contact and agent to “run around” bureaucracy
• Assigned immediately after forming agreement with developer
• Works with user to fulfill all necessary start-up procedures – explains procedures, collects
forms, assists users with completion, and works with representatives of gov’t agencies either on
behalf of the user or alongside the user
• Responds to questions, complaints, and requests after startup (coordinating aftercare)
• Serves as mediator for complaints by the user and discusses problems with government in an
attempt to find an adequate solution; helps the investor file a petition with the Kigali International
Arbitration Centre if appropriate
• Must have authority to represent the investor to complete process steps
• Must have training to fulfill procedures and interact with investors in a pro-active, professional,
and courteous manner
OSS Best Practices: Other
• High-level political support
• Continually seek ways of improving procedures within each relevant agency at
all levels (e.g., legal, regulatory, administrative, technical, HRM, etc.)
• Attractive EZ user reception offices with informational brochures, employee
identification badges, publicly displayed good practice charters and service
standards, suggestion boxes, etc.
• MoUs with other government entities to facilitate access to services,
collaborate, and share information
• Staff with appropriate authority, capacity, and training to execute functions
• Coordinating agency should have staff management and disciplinary powers
• Performance standards and monitoring and recognition for quality customer
service