CHITTAGONG, March 16: General Electric Manufacturing (GEM) Co, the country's lone transformer manufacturer under public sector, is facing financial crisis without necessary working capital or financial support from the government's agency concerned.
GEM officials have alleged that the Bangladesh Steel and Engineering Corporation (BSEC) is avoiding its responsibility to salvage the enterprise from the financial crisis.
The promising plant can be saved from extinction with the disposal of leasing deal of 30 acres its land to the Eastern Refinery Ltd (ERL) for the latter's expansion plan.
The lease deal process started in 2011, but it is yet to make any headway. Both ERL and GEM are eager to set aside the deal at the earliest possible time.
ERL is looking forward to the decision of the Bangladesh Petroleum Corporation to set up its second unit on the GEM land on a 40-year contract basis. The land is expected to be leased out to ERL at an estimated cost of Tk 2.00 billion, sources concerned said.
"The money sourced from the deal can only save GEM from this crisis. It will provide us necessary working capital, clear up bank loans, and help us to pay the dues of our retired officers and workers," said GEM managing director.
The company's bank loan with four state-owned scheduled banks stands at around Tk 1.00 billion, while as many as 60 retired officers and workers are yet to get their benefits and other dues.
The final draft of the lease agreement was sent to the authorities concerned in early February, which is now at the finalization process, sources said.
The government, instead of coming forward to save the plant, called tenders to hand it over to the private sector. It does not conform to the mission of setting up the plant, said an expert at the Chittagong University of Engineering and Technology (CUET).
The GEM MD said the company was set up in 1978 by the then Soviet Union to manufacture transformers of different sizes for electricity distribution in the country. It started commercial production in 1980.
At present it has become impossible to run the plant without working capital. Other private competitors in the sector are also advancing rapidly.
An official said the debt-burdened company cannot take loan from the banks. It cannot procure money from the capital market, as it is a non-profit organization.
The plant currently produces three types of transformers - 100-KVA, 200-KVA and 250-KVA. These are sold to the local electricity distribution and generation companies.
