The government is yet to reopen the 25 state-run jute mills--stalled eight months ago due to incurring heavy losses, amounting to billions of taka for years, leading to the lay off of more than 50,000 workers.
Later, the government decided to reopen the mills by leasing these out to the private sector. But the decision is yet to materialise.
Even though the jute mills remain dysfunctional, around 3,000 officials and employees of Bangladesh Jute Mills Corporation (BJMC) are getting their salaries without any work.
BJMC could not pay the dues of all workers even after eight months of closure of jute mills. Officials of BJMC are not clear as to when the mills will be reopened, by leasing these out to private sectors.
Many private sector entrepreneurs have expressed their concern whether the process of leasing jute mills out to private sectors would actually succeed.
They said banks will not finance for any medium-term contracts. It is also difficult to make profits by investing Tk four to five billion (Tk 400-500 crore) within such a short span of time. Apart from this, there is a risk of government's policy changing all on a sudden.
Despite the closure of government jute mills, export of jute and jute goods are on the rise during pandemic under the initiative of private sector entrepreneurs.
In the first eight months of this year (July-February), exports of jute and jute goods increased by 23 per cent, while exports of readymade garments, leather, leather goods and many other sectors declined. And now National Jute Day has been observed on 6 March.
With the view to privatisation, the ruling party (Awami League) promised to make the jute industry profitable in its election manifesto in 2009.
After the formation of the government, they reopened two closed jute mills and allocated Tk 50 billion (5000 crore) to run another three privatised jute mills. However, the efforts have not worked well.
In 2010-11 fiscal alone, the industry experienced a constant loss after gaining a profit of Tk 145.9 million (Tk 14.59 crore). In the last 11 years, the state-owned jute mills incurred a loss of Tk 48.59 billion (Tk 4,859 crore). The amount of loss in the last five years was Tk 29.81 billion (Tk 2,981 crore).
Unable to bear the brunt, the government started the process of sending 24,886 permanent workers of 25 jute mills on voluntary retirement (Golden Handshake) and closed those mills on 1 July. At that time, there were 23,842 substitute workers in those mills while the number of daily workers was 8,463.
And 25 jute mills out of 26 under BJMC were operational till last June. Of these, 22 were jute mills and three non-jute factories.
BJMC chairman Abdur Rauf told Prothom Alo last Thursday that an international tender may be called for the lease of the jute mills later this month. A short list of eligible candidates will be drawn from among the companies participating in the tender. Proposals will then be sought from them. In the first step, as many mills as possible will be leased.
Initially, BJMC had planned to start closed jute mills under public-private partnership (PPP) scheme. So, the corporation gave the opportunity to several businessmen to visit the closed jute mills. But businessmen expressed their unwillingness to run the jute mills under PPP.
Instead, they wanted long-term leases. Finally, the government took the initial decision to give a medium-term lease.
To close the jute mills, it was decided to terminate the jobs of permanent workers through Golden Handshake--giving Tk around 1.4 million (Tk 14 lakh) to each. Of the amount, 50 per cent will be paid in cash and the rest will in the form of profit-based savings certificates every three months by September.
Other than this, the arrears of 8,956 workers, who retired in 2013, along with substitute ones will be paid. The jute ministry sought Tk 50 billion (5,000 crore) from government to finish these tasks.
According to the BJMC, the arrears of four jute mills’ workers – National Jute mill in Sirajganj, Khalishpur and Daulatpur mills in Khulna and KED in Chattogram – were paid on last August.
The finance division under the ministry of finance has allocated Tk 17.24 billion (Tk 1,724 crore) to pay the half of the dues of remaining workers in cash from 21 jute mills. Of this, Tk 15.99 billion (Tk 1,599 crore) has been paid to the workers through their bank accounts.
The process of repaying 50 per cent of the arrear through savings certificates is underway. However, 3,095 permanent workers have not yet received any dues. Besides, the finance department has not yet released Tk 3.5 billion (Tk 305 crore) for the substitute workers.
Meanwhile, BJMC officials still have their jobs even though the workers were laid off due to the closure of the jute mills. There are 1,033 officials in the head office of capital’s Dilkusha while the number of employees is 1,752. As the jute mills are not in production, most of the officials do not have any work at present. But at the end of the month they are getting their salary.
However, the chairman of BJMC claimed that paying the dues of the workers is a huge task. All the officers and employees have work to do. However, as the production of jute mills has stopped, it is not necessary to work as before. If all the workers are paid, the work will be reduced.
When asked Khondaker Golam Moazzem, research director of CPD, told Prothom Alo that the government has been working haphazardly since the beginning, to close and reopen the jute mills. So, even though the workers were laid off, the BJMC officials and employees remained at the same position that increased the financial responsibility of the government. The government's position needs to be clarified, he said.
* This report appeared in the print and online editions of Prothom Alo and has been rewritten in English by NH Sajjad