BJMC gets better response for leasing jute mills

"We have widened the scope for the production of textiles, backward and forward linkage items of jute and textiles to attract more investors to lease the mills," said Textiles and Jute Secretary Md Abdur Rauf

The jute ministry has received a total of 37 proposals from the private sector for leasing 13 state-owned mills after it said textiles could be produced at the mills apart from jute goods, officials said yesterday.

The Bangladesh Jute Mills Association (BJMC), which controls state-owned mills, released the revised terms of reference for leasing 11 jute and two non-jute mills at the end of October, shifting from its initial position that only jute goods can be produced in the 25 factories that were closed in July 2020.

"We have widened the scope for the production of textiles, backward and forward linkage items of jute and textiles to attract more investors to lease the mills," said Textiles and Jute Secretary Md Abdur Rauf.

The state corporation got applications from 22 firms that showed interest to lease out the mills for up to 30 years, officials said.

The BJMC evaluated the proposals over the past week before forwarding them to the textiles and jute ministry for clearance.

Rauf said they will now ask all the bidders to submit their final proposals to lease the mills.

"We will then review the proposals again after getting them," he added.

In the face of consistent heavy losses, the government laid-off more than 50,000 workers in three categories -- permanent, temporary, and substitute -- by closing down all state-run jute mills.

It was promised that the closed factories would soon be modernised and reopened through various arrangements, including joint ventures, public-private partnerships or government-to-government partnerships.

As per the plan, the BJMC in April 2021 called upon interested investors to submit expressions of interest for leasing 17 of the mills for a period of five to 20 years.

However, until now it could lease out six factories as responses from the private sector had been lukewarm.

Still, only three are running now while the rest are yet to start production, officials said.

Rauf, who was chairman of the BJMC during the closure, said three mills have started exports. Leasers of the remaining three mills have deposited security money.

But they may be going slow for problems in opening letters of credit for now, he added.

Despite the closure of the mills, losses of the state corporation remain high as it has to pay salaries and bear maintenance costs of the closed factories.

The BJMC's losses were estimated at Tk 264 crore in fiscal 2021-22, and Tk 380 crore the year before. The corporation suffered kisses of Tk 704 crore during fiscal 2019-20 when the mills were shut, according to finance ministry data.