PC for disinvestments of loss-making SoEs
Saturday, 15 May 2010
Sonia H Moni
The Privatisation Commission (PC) has ruled out the possibility of making state-owned enterprises (SoEs) financially viable under government management and suggested disinvestment to get rid of losses.
Privatisation Commission Chairman Mirza Abdul Jalil told the FE: "State-owned industries incur losses every year due to mismanagement and to come out of this situation privatisation could be a good option."
The net loss of the SoEs was Tk 99.828 billion in 2007-08, according to the Bangladesh Economic Survey 2009.
Mr Jalil said, "Privatisation is the only way to turn loss-making SoEs to profitable ones."
"From the early seventies, the government started transferring the SoEs to the private sector for the purpose of reducing fiscal burden substantially by offloading, mainly, the loss-making ones. The privatisation process, however, gathered pace in the early nineties."
It, however, could not make any headway in the task of disposing of at least 35 SoEs because of bureaucratic red-tape, legal complexities and lukewarm response from the prospective buyers.
He said, "A total of 592 companies have been privatised in between 1972 and 2009 and around 76 SoEs in the areas of textiles, jute, fisheries, food processing, engineering, chemicals, tannery, sugar and forest have been privatised since 1993."
He said, "Privatised companies are running well and making profit." Citing example Mr Jalil said, "Before privatisation Chhatak paper mill had only one factory but now it has five factories including one paper pulp factory, two cement factories and two paper factories."
He said, "There are 280 jute mills in the country and among them 20 state-owned mills are closed that can also be made profitable concerns by privatisation."
Mr Jalil said, "If the government wants to reopen SoEs, it will cost around 15 to 20 per cent of the total budget that is not possible to invest; so privatisation is the only way."
Meanwhile Industries Minister Dilip Barua said, "The government will take decision on SoEs privatisation issue as per election manifesto."
The Privatisation Commission (PC) has ruled out the possibility of making state-owned enterprises (SoEs) financially viable under government management and suggested disinvestment to get rid of losses.
Privatisation Commission Chairman Mirza Abdul Jalil told the FE: "State-owned industries incur losses every year due to mismanagement and to come out of this situation privatisation could be a good option."
The net loss of the SoEs was Tk 99.828 billion in 2007-08, according to the Bangladesh Economic Survey 2009.
Mr Jalil said, "Privatisation is the only way to turn loss-making SoEs to profitable ones."
"From the early seventies, the government started transferring the SoEs to the private sector for the purpose of reducing fiscal burden substantially by offloading, mainly, the loss-making ones. The privatisation process, however, gathered pace in the early nineties."
It, however, could not make any headway in the task of disposing of at least 35 SoEs because of bureaucratic red-tape, legal complexities and lukewarm response from the prospective buyers.
He said, "A total of 592 companies have been privatised in between 1972 and 2009 and around 76 SoEs in the areas of textiles, jute, fisheries, food processing, engineering, chemicals, tannery, sugar and forest have been privatised since 1993."
He said, "Privatised companies are running well and making profit." Citing example Mr Jalil said, "Before privatisation Chhatak paper mill had only one factory but now it has five factories including one paper pulp factory, two cement factories and two paper factories."
He said, "There are 280 jute mills in the country and among them 20 state-owned mills are closed that can also be made profitable concerns by privatisation."
Mr Jalil said, "If the government wants to reopen SoEs, it will cost around 15 to 20 per cent of the total budget that is not possible to invest; so privatisation is the only way."
Meanwhile Industries Minister Dilip Barua said, "The government will take decision on SoEs privatisation issue as per election manifesto."