The National Coordination Committee (NCC) to Combat Serious Crimes has recommended that the state-owned North Bengal Paper Mills be reopened and be handed over to the army to run it properly.
According to an industry ministry proposal sent to cabinet division early this month, the NCC recommended: "In order to make the mill productive, it is necessary to hand over the mill to an organisation that is disciplined and neutral. Therefore, it will be rational to handover the mill to the Army for its revival."
The NCC to Combat Serious Crimes has recommended that the three major state-owned mills, shut down for losses five years ago, be reopened.
The industries ministry has already sent a proposal to the Advisory Committee on Economic Affairs for reopening the Khulna Newsprint Paper Mills, North Bengal Paper Mills and Chittagong Chemical Complex Ltd, which are set up on a total area of 328 acres of land.
Some experts, however, don't think that such an initiative by the government is wise because of continuing corruption and inefficiency in some government sectors.
The government is better off without the losses incurred by enterprises under government management, they say, citing previous experiences.
Bangladesh Institute of Development Studies (BIDS) Research Director Zaid Bakht said, “The government should look for alternatives to run these mills if they cant be privatised."
Bakht also thinks that its better that the mills are run directly by the army and not an organisation like the Sena Kalyan Sangstha, which he says, will not make the effort viable.
The North Bengal Paper Mill is situated on 133.54 acres land in Pakshi, which begun production in 1975 and incurred a loss of Tk 328 crore till its closure in 2002.
The government took an initiative to reopen the mill in 2006 and a proposal was sent to the Cabinet Committee on Economic Affairs in this regard. The committee in turn said "this would give a negative signal to our financers.”
The finance ministry explained that reopening the mill, which was making losses under government management, again under the same management would give negative signals to donors.
A finance ministry official says that the circumstances remain the same.
The NCC in its recommendation said the 91 acres of land belonging to Chittagong Chemical Complex Ltd alone is worth Tk 159.58 crore at present, whereas the price of the mill offered by private companies is lesser than the price of the land.
The NCC recommends that since the private sector seems unlikely to offer the right price, the mill should therefore be placed under the management of Bangladesh Chemical Industries Corporation (BCIC) for profitable operation.
It said the government already has plans to set up an industrial park on 40 acres of chemical complex under Bangladesh Small Industries Corporation (BSIC) because it thinks that the industrial park would thrive under BSIC management.
BCIC has meanwhile said that it would be easier for BCIC to supply raw materials to the paper and fertiliser mills under the corporation if Chittagong Chemical Complex is reopened.
The industries ministry, however, points out that an investment of Tk 80 crore is required for reopening of the company, which was shut down in 2002 for continuous loss.
NCC has proposed reopening of the Khulna Newsprint Paper Mill after major renovation and that it produces the more profitable white writing paper in place of newsprint, instead of selling the mill to the private sector.
It also recommended waiver of the Tk 479 crore loan of the mill, new investment of Tk 66 crore for renovation and providing the mill with Tk 5 crore working capital.
The NCC also proposed connecting the mills with gas pipelines to make energy consumption of the mill workable. The paper mill was closed in 2002 due to losses mainly because of increase in furnace oil consumption and shortage of raw materials.