No privatised, PPP textile mills reopen

Moinul Haque | Published: 23:52, Sep 11,2020

 
 

Almost six years of the government initiative have passed but no state-owned textile mill has reopened yet under the public-private partnership due to the poor response from private entrepreneurs.

At least 35 mills have been sold to private owners for reopening but none of the factories has reopened, rather buyers sold machineries and opened housing business on the public property.  

Prime minister Sheikh Hasina in October 2014 directed the textiles and jute ministry to sell no more mills and to reopen all the textile mills.

Following the directives, the textiles ministry and the Bangladesh Textile Mills Corporation decided to reopen the mills under the PPP method and received a nod from the cabinet committee to operate 16 mills in this fashion.

According to the textiles ministry, the BTMC has 25 textile mills and only six of them are running on a limited scale on rental basis.

Economists and labour leaders alleged that the government wiped out the state-owned sector in a planned way to protect the interest of local and international vested quarters.

Private entrepreneurs, however, said that the government initiative for the operation of the PPP formula would not be successful in the textile mills sector due to outdated machineries and unfavourable agreement.     

According to BTMC statistics, the government has sold 12 mills through tender, handed over nine mills to their workers and employees, 30 to their former owners and seven to the liquidation cell to sell them off.

The mills have been sold or handed over at different times on condition of resuming their production but no factory has come back to operation, ministry officials said.

They said that the ministry took back seven textile mills from the private sector buyers for violating terms and conditions of privatisation.

According to ministry officials, the mills were handed over to the private sector on condition that the buyer would repay all the dues and loans of the mills to various financial institutions and to reopen the units.

But not a single buyer complied with the agreement. Rather some buyers took loan from banks against properties of the mills and some sold mill machineries as scrap, officials said.

Ministry sources said that following the prime minister’s directive, the textiles and jute ministry took an  initiative to take back 69 privatised mills that had violated conditions but the initiative has remained unimplemented for the last couple of years.

Then state minister for textiles and jute Mirza Azam in 2017 said that the government was taking back the mills that had remained closed for years.

He said that some of the mills had remained closed for long, owners of some mills had converted those into other mills, which they were not authorised to do, while owners of some other mills sold land of their mills.

Since 1982, the government has privatised 134 jute and textiles mills and most of the buyers of the mills have violated terms and conditions of the privatisation, sources said.

According to a circular issued by the textiles and jute ministry in October 2017, the government had taken back Kishoreganj Textile Mills Ltd from the private sector owner for violating major conditions set out during the handing over of the state-owned enterprise.

As stipulated in the circular, the owner of the mills did not pay the government dues but took loan from Sonali Bank by mortgaging the factory prior to the registration of the final deed.

The government cancelled the sales deed of the mills, which was signed on December 22 in 1994, as the buyer violated the main objective of privatisation and kept the unit unoperational.

Textile ministry sources said that their inspection team found that most of the owners had sold lands and machineries of textile mills which had been handed over to the private sector.

They said that the owners of Ahmed Silk Mills, Chand Textile Mills, Halima Textile Mills, Eagle Textile Mills and Afsar Cotton Mills sold their land property or started housing business on the land of the state-owned mills. 

Anu Muhammad, a Jahangirnagar University economics professor, said that it was a planned initiative from the government to put the textile mills out of business.

The process has started in the 80s on the prescription of the World Bank and the International Monetary Fund and all the governments have jointly since completed the job, he said.

The governments have protected the interest of local and global vested quarters in the textile sector, Anu Muhammad said.

He said that the governments had no intention to make the sector productive but they were keen to hand over the public property to influential quarters in the name of privatisation.  

Asked, BTMC general manager Kazi Feroz Hossain disclosed that the private partners for two textile mills were finalised through international tender but the transfer was being delayed due to the coronavirus pandemic.

They have already signed agreements, he said, with the private partners Tanzin Fashion limited and Orion Consortium for Ahmed Bawany Textiles Ltd and Kaderia Textile Mills respectively.

Feroz said that the government was going to float an international tender to select private partners for the four textile mills in the second phase.

The mills are, he disclosed, RR Textile mills, Dosto Textile Mills, Magura Textile Mills and Rajshahi Textile Mills.

Trade Union Centre president and veteran labour leader Shahidullah Chowdhury said that the state-owned textile mills sector had been wiped out due to the government policy.

Limitless corruption in government agencies has disabled the sector, he said. 

Md Fazlul Hoque, former vice-president of Bangladesh Textile Mills Association, said that private sector entrepreneurs would not be interested in the PPP formula as the machineries of state-owned textile mills became obsolete.

He also said that it would not be possible to make the mills profitable if gas connections and quality electricity were not made available to the entities.

Textiles and jute secretary Lokman Hossain Miah declined to make any comment on the issue.

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