A review of the activities of the Privatisation Commission (PC) gives a disconcerting picture. Its achievement has so far been of a miniscule nature; it could only sell four state-owned enterprises (SoEs) to the private sector since 2009.
On its part, the government, after assumption of office in 2009 during its erstwhile tenure, did set a modest target of privatising state-run industries with the view to reducing fiscal revenue losses, increasing industrial output and creating new employment opportunities to help absorb a large number of people who enter the labour or job market every year.
But the PC has not been able to perform its task properly due to alleged non-cooperation by the concerned ministries that want to retain their hold and control over the loss-making state-run industrial units, without considering the budgetary burden that such SoEs entail. The process of privatising some 25 industrial units under different ministries is still pending with the PC. This is not possible under the prevailing circumstances without the active cooperation of the concerned ministries.
Meanwhile, the Prime Minister's Office (PMO) was reported to have formed a five-member committee late last month to examine the process of privatisation of state-owned enterprises (SoEs) and assets under the ministry of textiles and jute. This move came in the wake of a number of reports that were published in a section of the contemporaries about allegations of irregularities against a minister and some ministry officials.
Allegations thus have it that the ministry during the previous tenure of the grand alliance government reportedly sold three state-owned textile mills with lands and assets at surprisingly lower prices, in violation of the existing rules. A minister and some other officials at his ministry, according to the reports in the media, did allegedly 'pilot' the sale of Mohini Textile Mills in Kushtia, Muslin Cotton Mills in Gazipur, Chisti Textile Mills in Comilla, Textile Facility Centre in Noakhali and 3.90 acres of land of Valika Woolen Mills in Chittagong, violating the rules.
In the process, the ministry also allegedly ignored at random the instructions of the Finance Minister, Cabinet Division and the cabinet committee on economic affairs. All the three mills were reportedly sold without tender and at the 'will' of the minister. The ministry even sold 3.90 acres of land of Valika Woolen Mills, which was handed over to the PC for completing privatisation process, ignoring the repeated objections from the commission.
Existing rules say no ministry or department could sell any state-owned industries and assets as the PC was mandated for that. Privatisation under the same rules has to be conducted by the PC. The liquidation cell of the ministry formed under a presidential order in 1982 to privatise the state-owned factories and assets was abolished as soon as the Privatisation Rules 2007 came into effect.
Earlier, the AL-led government during its previous tenure did, at one stage, decide not to privatise the SoEs any more. The decision was taken because the successful bidders were then found to be not using the already-divested SoEs for purposes for which the units were handed over to them. The government decided then that it would not allow the buyers of SoEs to use divested land or industries for real estate purposes, as many of them were found to be doing, in violation of the rules and conditions for privatisation.
However, nobody knows for sure whether the decision is still in vogue or not. But with the 'surprise' sale of the three textile mills and assets late last year, it is now clear that the decision was obviously flouted.
Over the last several years, the PC could not make any headway in the task of disposing of, at least, 26 SoEs because of bureaucratic red tape, legal complexities and lukewarm response from the prospective buyers. Apart from lack of coordination among various public sector agencies, inaccurate valuation of the SoEs also acted as a stumbling block to the PC's performance about privatisation. On account of some loopholes in the privatisation policy, some non-financial and financial public enterprises were privatised also through offloading a part of their shares in the stock market, bypassing the PC.
According to the privatisation policy, SoEs under different ministries or organisations will have to be privatised only through the PC. However, under special permission granted by the government, a ministry or a division or any other government agency can bypass the PC and sell their loss-making units. Analysts say such a dual policy has undermined the very existence of the PC.
Whatever may be the reasons behind the slow progress, it is high time to revisit the privatisation programme. By all counts, the process of privatisation should get speed. For that matter, the government may require to update and modernise the whole gamut of policies about privatisation, suiting the needs of the present time.
szkhan@dhaka.net
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