Privatisation process in disarray
Friday, 11 September 2009
Syed Jamaluddin
Privatisation Commission is facing difficulty in disinvesting 30 industrial units. These industrial units have already incurred a loss of Taka 100 billion (10,000 crore). These units are now formally listed for privatisation. Work on privatisation of these units is in different stages of processing. Government has now announced plans to restart these units in the public sector. Privatisation Commission, according to newspaper report, has refused to return these units. The Minister of Industries has said that he is in favour of advancing industrialisation. The privatisation commission, according to the minister, cannot show that privatised units are making any progress. That is why the minister is interested in restarting industrial units on the basis of public-private partnership. Chairman of the Privatisation Commission has said that the burden of debt will be increasing by holding the loss-making industrial units. Some heavily indebted industrial units are being retained to restart only to satisfy the interest of few vested quarters.
According to the privatisation commission, 30 industrial units are now listed for sale. These were listed after receiving written proposals from the concerned ministries. Tenders have been invited for many of these units. In some cases, tenders have been invited more than once. In some other cases, the commission has been involved in litigation. When the commission is in the process of sale or leasing of the units, government has asked for return of 13 units. The Ministry of jute and textiles has only recently requested the commission for privatisation of 12 loss-making units. On receipt of the request the commission has started the tendering process but now they have asked for return of these units. The commission has not yet responded to this request.
Sources close to the ministry of industries have said that there was no gain from the sale of loss-making units. That is why they are proposing to run those units under the private partnership framework. The ministry of finance has started preliminary work on this new concept. Privatisation Commission is not in favour of returning the units to the government If the listed industries are withdrawn, then there is no justification for keeping the commission. At least, an amount of Taka 20 million (2.0 crore) is spent for the commission each year.
Bangladesh Textile Mills Corporation (BTMC), Bangladesh Jute Mills Corporation (BJMC) and Handloom Board are reluctant to furnish information on losses of their enterprises for fear of losing jobs if their units are privatised. Some vested quarters want to keep the loss-making units operational for serving their purpose. Collective bargaining agents (CBA) want to keep the sick units operational in their own interests. The Chairman of the Privatisation Commission has said that he is facing obstacle at every stage of privatisation. He said industrial units have not lost money after privatisation. Those who are dreaming to restart the loss-making units cannot guarantee that these units will be viable after restarting under the public sector.
The minister of industries is saying that many industrial units have taken bank loans after privatisation but have not started production. But this does not concern the government. The industrial units should run the way they want. Government need not worry about this. It is not understood how the government will run the loss-making units. They have no magic in their hands. They should deliberate before spending taxpayers' money on these units. Public have not given them any mandate for this. Government must outline their detailed plans as to how they are going to restart the loss-making units. People have to be convinced about this. Government is also planning to reopen the closed jute mills. They have to outline their policy. A statement of the jute minister is not enough. Some of our intellectuals are serious about revival of the jute sector. But they do not know how to do that. Their only hope is government's assistance. But government cannot just dole out money. They must have a clearcut policy of reviving the jute sector. This government in their previous tenure gave some textile mills to the workers at the initiative of the prime minister. But this did not work and the burden has come back to the government. If the government is in favour of industrialisation, they can go for new industries. There is no need for meddling with the affairs of losing industrial units.
There was a news in the media recently about assisting the sick industrial units. There are three different associations for sick industries. But none of them is registered with the government. Some influential people always lobby with the government for assistance; their purpose is to get some lump sum amount from the government. They have no plans to revive the sick industries. Some of these sick industries must be allowed to die a natural death. This is a very old issue. If the sick industries can justify their revival, then only some kind of assistance may be considered for them. Across the board allocation cannot be considered.
Privatisation has not only come to a halt but the process is now being reversed. The ministry of jute has asked for Tk 1.36 billion (136 crore) from the ministry of finance to restart three jute mills. These mills are to be made operational during the current financial year. It is not known what analysis has gone behind this decision. It is normally expected that these mills will be economically viable after they restart production. Government has the responsibility to inform the people about the subject. Infusion of public money to the jute mills was not considered appropriate by the earlier governments. But they made some allocations reluctantly because of pressure from the trade unions. The government must explain the rationale behind fresh allocation of tax payers' money. We all remember that experiment with nationalisation has failed in Bangladesh which began immediately after the liberation of Bangladesh. (The writer is an economist and columnist. He may be reached at e-mail: syedjamaluddin22@yahoo.com)
Privatisation Commission is facing difficulty in disinvesting 30 industrial units. These industrial units have already incurred a loss of Taka 100 billion (10,000 crore). These units are now formally listed for privatisation. Work on privatisation of these units is in different stages of processing. Government has now announced plans to restart these units in the public sector. Privatisation Commission, according to newspaper report, has refused to return these units. The Minister of Industries has said that he is in favour of advancing industrialisation. The privatisation commission, according to the minister, cannot show that privatised units are making any progress. That is why the minister is interested in restarting industrial units on the basis of public-private partnership. Chairman of the Privatisation Commission has said that the burden of debt will be increasing by holding the loss-making industrial units. Some heavily indebted industrial units are being retained to restart only to satisfy the interest of few vested quarters.
According to the privatisation commission, 30 industrial units are now listed for sale. These were listed after receiving written proposals from the concerned ministries. Tenders have been invited for many of these units. In some cases, tenders have been invited more than once. In some other cases, the commission has been involved in litigation. When the commission is in the process of sale or leasing of the units, government has asked for return of 13 units. The Ministry of jute and textiles has only recently requested the commission for privatisation of 12 loss-making units. On receipt of the request the commission has started the tendering process but now they have asked for return of these units. The commission has not yet responded to this request.
Sources close to the ministry of industries have said that there was no gain from the sale of loss-making units. That is why they are proposing to run those units under the private partnership framework. The ministry of finance has started preliminary work on this new concept. Privatisation Commission is not in favour of returning the units to the government If the listed industries are withdrawn, then there is no justification for keeping the commission. At least, an amount of Taka 20 million (2.0 crore) is spent for the commission each year.
Bangladesh Textile Mills Corporation (BTMC), Bangladesh Jute Mills Corporation (BJMC) and Handloom Board are reluctant to furnish information on losses of their enterprises for fear of losing jobs if their units are privatised. Some vested quarters want to keep the loss-making units operational for serving their purpose. Collective bargaining agents (CBA) want to keep the sick units operational in their own interests. The Chairman of the Privatisation Commission has said that he is facing obstacle at every stage of privatisation. He said industrial units have not lost money after privatisation. Those who are dreaming to restart the loss-making units cannot guarantee that these units will be viable after restarting under the public sector.
The minister of industries is saying that many industrial units have taken bank loans after privatisation but have not started production. But this does not concern the government. The industrial units should run the way they want. Government need not worry about this. It is not understood how the government will run the loss-making units. They have no magic in their hands. They should deliberate before spending taxpayers' money on these units. Public have not given them any mandate for this. Government must outline their detailed plans as to how they are going to restart the loss-making units. People have to be convinced about this. Government is also planning to reopen the closed jute mills. They have to outline their policy. A statement of the jute minister is not enough. Some of our intellectuals are serious about revival of the jute sector. But they do not know how to do that. Their only hope is government's assistance. But government cannot just dole out money. They must have a clearcut policy of reviving the jute sector. This government in their previous tenure gave some textile mills to the workers at the initiative of the prime minister. But this did not work and the burden has come back to the government. If the government is in favour of industrialisation, they can go for new industries. There is no need for meddling with the affairs of losing industrial units.
There was a news in the media recently about assisting the sick industrial units. There are three different associations for sick industries. But none of them is registered with the government. Some influential people always lobby with the government for assistance; their purpose is to get some lump sum amount from the government. They have no plans to revive the sick industries. Some of these sick industries must be allowed to die a natural death. This is a very old issue. If the sick industries can justify their revival, then only some kind of assistance may be considered for them. Across the board allocation cannot be considered.
Privatisation has not only come to a halt but the process is now being reversed. The ministry of jute has asked for Tk 1.36 billion (136 crore) from the ministry of finance to restart three jute mills. These mills are to be made operational during the current financial year. It is not known what analysis has gone behind this decision. It is normally expected that these mills will be economically viable after they restart production. Government has the responsibility to inform the people about the subject. Infusion of public money to the jute mills was not considered appropriate by the earlier governments. But they made some allocations reluctantly because of pressure from the trade unions. The government must explain the rationale behind fresh allocation of tax payers' money. We all remember that experiment with nationalisation has failed in Bangladesh which began immediately after the liberation of Bangladesh. (The writer is an economist and columnist. He may be reached at e-mail: syedjamaluddin22@yahoo.com)