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Monday, December 18, 2017 05:04:57 PM
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Shelving privatization makes no sense

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01st-Dec-2017       
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AS per a decision by cabinet committee on economic affairs on Monday, the Textile and Jute Ministry is taking back five silk and textile mills from the Bangladesh Investment Development Authority -- formerly the Privatisation Commission, 12 years after the loss making mills were placed for privatisation.

These mills include Rajshahi Silk Mills, Thakurgaon Silk Mills, Sylhet Textile Mills, Kurigram Textile Mills, and Valika Woollen Mills. Two silk mills were sent to the then Privatisation Commission in 2007 and the remaining three were put on sale to private parties in 2012. There is no answer however as to why these mills were not sold by this time. The authorities are now justifying the taking back on the ground that they are causing huge waste of resources of the government for paying electricity bills and staff salary and allowances of the closed mills.

They were not in production but staff members were paid without work up to 10 years for some. We know the government had decided to sell those mills at that time in a list of several others anticipating private sector buyers will modernise the mills to turn them into profiteering. A good number of state owned mills were also sold that time but the process came to a halt on threat of strike by labour unions when the country was facing political crisis that ultimately led to military take over. Once Awami League came to power in January 2009 it quickly shelved the privatisation process as part of its populist labour politics to win labour support. Some other mills and factories in public sector were also removed from privatisation list although they continued to remain loss making. The Prime Minister has given directive to re-open those five mills now and put them into production importing modern equipment. 

Many believe however that running those mills again in public sector is not a good decision given their record of huge annual losses before they were put on sale. Even senior government officials believe if they were sold at that time they could create new jobs and increase production. The government is now regularly paying for loss making public industries as many of them even failing to pay retirement benefits and arrear allowances of workers and staff members. The government is allocating funds to mitigate their crisis. Only a populist labour policy provides the basis for such decision.

It goes without saying that new import of machinery will make many rich by over-invoicing. The bulk of the new labour force to be engaged in these mills will be party men who will get fat wages to serve the government political purpose. We suggest the government should review the decision and refrain from taking the load of such industries once again to add to government expenditure. 

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