Bangladesh could have marched forward significantly in terms of development had the country's planners chosen different projects in the past strictly in terms of economic returns. Many projects were undertaken without considering their feasibility in economic terms. The real tragedy is that none took lessons from bankruptcies and failures of projects that finally caused a heavy drainage of taxpayers' money from the state exchequer.
One such glaring example was the Adamjee Jute Mills (AJM). Once again, it seems a certain quarter is making a move to reopen the AJM-2 at a time when all the state-run jute mills under the Bangladesh Jute Mills Corporation (BJMC) are struggling to survive despite heavy doses of government handouts at regular intervals.
About 26 BJMC mills with more than 60,000 workers are now gasping for life as the mills are running at half their capacity in view of non-availability of raw jute and funds.
The Corporation is going red while paying Tk 140 million a week as wages for workers, according to official sources. In other words, the Corporation has to spend Tk 7.28 billion a year or nearly 72 per cent of its total earnings as wages.
What is really alarming is the fact that a worker in BJMC's 26 mills gets Tk 430 a day as wage, which is more than double the amount in private mills. While the private mills are run on a 'no work, no pay' basis, BJMC has to pay its workers weekly, regardless of whether there is any work or not.
In fact, the move to reopen the Adamjee Jute Mills-2 comes as a surprise to all who are concerned over the plight of existing jute mills in the country. A FE report quoting official sources said, a proposal would be sent to the Prime Minister's Office (PMO) to consider reopening of the mills on 11 acres of land in Narayanganj.
The move for the restoration of the AJM is being taken at a time when the ministry of textiles and jute has sought equal facilities for jute goods like other agro products with a view to keeping jobs in the sector unaffected. On the other hand, the former jute and textile minister had allegedly auctioned precious lands of such mills at throw-away prices. The Anti-Corruption Commission has reportedly taken up the scam for probe.
The country's jute sector has long been facing many difficulties. The prices of jute products have declined in the international market due to political unrest in the Middle East and economic recession of the Euro-zone countries. At home, the mandatory jute packaging law has seemingly lost its bite. About 40 million people who are involved directly and indirectly in the jute industry, face a grim future and are gradually moving to non-farm vocations. And adding 25,000 or 30,000 more workers to yet another mill -AJM - will just be smearing salt on raw wound.
It is time that the prime minister intervened in the issue. The land meant for the reopened AJM could be developed as an industrial park. Such a park was stipulated when the lands were handed over to the Bangladesh Export Processing Zones Authority (BEPZA) in 2004.
Jute goods are facing a grim future. The prices of jute goods in the international market have come down in the last two years. In 2011-12, the BJMC mills incurred a loss of Tk 660 million. In 2012-13, their loss amounted to Tk 3.80 billion, although there was a subsidy of 10 per cent. In the Economic Survey for 2013, the loss of the BJMC for the year 2012-13 was estimated at Tk 3.80 billion. The loss was the highest among the state-owned enterprises.
On the other hand, the position of the Adamjee Jute Mills just before its closure in 2002 was no better. During its operation for long 31 years, the AJM had incurred an aggregate loss amounting to Tk 12 billion. In the 2000-2001 fiscal alone, the loss amounted to Tk 1.90 billion.
After the emergence of Bangladesh only in 1973-74, 1979-80 and 1981-82 financial years, the AJM made some profits at a narrow margin. But owing to the huge losses, the mills could not reach its full capacity of production at 70 thousand metric tons a year. Just before the closure, production in the AJM had been reduced to 35,000 metric tons, which was only 50 per cent of the total capacity.
Mismanagement, corruption, political unrest, employment of unskilled workers and surplus manpower were identified as factors that led to the closure of Adamjee. After liberation, almost all the governments in power had to think on this, but they did not shut down the mill, perhaps, anticipating labour unrest.
However, in 2002, a strong political decision of the then government made it possible to declare AJM closed. Past records showed, the total estimated cost of the AJM at closure was about Tk 8.80 billion. It got an asset amounting to Tk 8.56 billion while its accumulated liabilities were Tk 12.70 billion. The mill was a drag on the economy of the country. There should not be a replication of the same debacle.
arjayster@gmail.com
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