PPP planned to run state jute mills

The government will initiate a process to partner with the private sector to run the publicly owned jute mills in an attempt to turn around the ailing state entities, officials said Monday. "Our initial plan is to run Qaumi Jute Mills Ltd and Khalishpur Jute Mills Ltd through public-private partnership as a test case. Other mills will follow suit," secretary for Jute and Textiles Ministry Ashraful Moqbul told the FE. "We'll appoint an accountancy firm to assess the assets and liabilities of the two factories. I think the process will be complete by June this year," he added. Currently, Bangladesh Jute Mills Corporation (BJMC) is charged with running 18 jute mills and 3 non-jute mills, which are on the financial life support from the government. Some 20 of them are now operating. The People's Jute Mills, renamed as Khalispur Jute Mills, have resumed operations while Qaumi Jute Mills will be reopened after Finance Ministry injected Tk 1.0 billion into the beleaguered mills. Officials said donor agencies are pressing the government to stop investing in ailing public enterprises and direct scarce resources to public health and education projects. The World Bank and other multilateral lenders have also urged the government to denationalise the losing concerns. "That's why, we've taken the decision of running the jute mills under PPP arrangement," an official said. Mr. Moqbul said that the government has decided to run the jute mills under PPP arrangement to cutback their massive losses. "Actually we are bureaucrats. We don't know how to do business efficiently," he told the FE. Huge production of jute in recent years has brought about good days for golden fibre. Some 6 million bales of jute were produced in 2009-10 fiscal year, up from 4.5 million bales in the year before. "We want to export jute goods instead of raw jute to earn the crucial foreign exchange," Mr. Moqbul said. In 2010 fiscal budget, the government had allocated Tk 30 billion for the execution of PPP projects. But government agencies failed to develop a single PPP project, leaving the entire money unspent. In the current fiscal, it has diverted Tk 16 billion to Bangladesh Infrastructure Finance Fund from the PPP allocation. "So there will be no dearth of funds to run the mills under PPP arrangement, because the jute sector has now revived after decades of stagnation," said the secretary.