Govt floats tender to lease out 25 jute mills
The federal government has floated an international tender to lease out 25 state-run jute mills for an interval of five to twenty years even though industrialists seem to be uninterested on the short-term deals.
The tender, issued by Bangladesh Jute Mills Corporation (BJMC) on April 27, aims to inspire both domestic and foreign entrepreneurs to join the jute industry through an open bidding system.
"So, both international and domestic entrepreneurs will get the chance," BJMC Chairman Abdur Rouf told The Daily Star.
He also said they might give priority to foreign direct investment (FDI) in the leasing process.
The federal government closed all state-run jute mills on July 1 last year, prompted by heavy losses and excessive production costs, laying off more than 50,000 employees in three categories -- permanent, non permanent and substitute.
When discussing the tender, Mohammed Mahbubur Rahman Patwari, chairman of Bangladesh Jute Mills Association, said although the tender system was an extended process, he applauded your choice.
But the primary challenge now is learning exactly what will be the investors' financing system.
"Whether the company who will take the lease will be able to finance the investment and how they'll revamp the industry, these issues aren't clear yet," he added.
Besides, a five-to-20-year leasing period is an extremely short term in comparison to long-term business strategies.
"If such a short-term lease is given, you won't be possible to make a profit by making a large investment here. This is another big problem," Patwari said.
As such, most companies will never be interested in the short-term investment.
"Before you invest somewhere, you need to consider the potential profit. Now it remains to be observed how the government addresses these issues," he added.
However, Golam Dastagir Gazi, the minister for textiles and jute, said effective measures have already been taken up to reopen the closed BJMC mills on a lease basis.
While addressing a virtual ministerial meeting yesterday, Gazi expressed hope that the jute sector's contribution to the economy would increase further as a result of productivity and management strategies being implemented by private jute mills.
Regarding the let go workers, the minister said they might get job opportunities on important basis at privately-run mills.
Simultaneously, this move will generate new occupations for able and skilled personnel while those who remain would be rehabilitated in phases.
The arrears and wages of employees of four of the shuttered jute mills -- Jatiya, Khalishpur, Daulatpur and KFD -- were paid in August this past year.
For those among 34,657 personnel who are individually owed over Tk two lakh in dues, the ministry can pay half in cash while rest will be paid through profit-based savings certificates on a half-quarterly basis.
Gazi went on to state that that they had received Tk 1,69.41 crore from the finance ministry to pay the cash portion to the workers of most 21 mills.
Till date, Tk 1662.17 crore has been paid to the bank accounts of 31,656 workers, which is approximately 93.94 per cent of the allocation, it said.
BJMC Chairman Rouf further said they have paid 97 % of the worker' dues.
However, payments to all of those other workers have been delayed by problems over litigation, audit objections, mismatch of NIDs, and non-availability of bank accounts of the workers.
"All necessary steps are being taken to resolve the issue," he added.
