VOL NO REGD NO DA 1589

Sunday, January 15, 2006

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HEADLINE
 
DLC disinvestment move caught in bureaucratic cobweb
S M Jahangir
1/15/2006
 

          The government's move to disinvest the closed Dhaka Leather Complex (DLC) still hangs in the balance due to frequent policy shift coupled with procedural complexities.
In its latest policy revision, the authority has planned to invite fresh bid for leasing out the closed state-owned enterprise (SOE) to the private sector to avoid controversy.
Earlier, the government decided, in principle, to lease out the unit to the Government of Czech Republic without inviting tender.
Much earlier, the Czech government submitted a proposal to the Ministry of Industries (MoI) to run the closed DLC under joint collaboration with local partners.
Now, the authority has realised that handing over the unit to the Czech company without inviting any tender could stand in opposition to the government's existing procurement policy.
"Since the proposed private-public partnership initiative contradicts the country's existing Public Procurement Act 2003, we have decided to float international tender for leasing the unit out," an official source told the FE.
The government planned to strike the partnership deal with the private sector after a subsequent move to divest the unit through series of tenders that failed to lure any buyer, said officials.
The MoI is likely to submit a proposal on the invitation of fresh tender for leasing out the DLC to the cabinet committee shortly for its approval.
The DLC was laid off in October 1998 to facilitate its disinvestment, which was plagued by regular losses. The state-owned Bangladesh Chemical Industries Corporation (BCIC) ran the unit, located at Nayarhat in Savar.
The government earlier formed a high-powered technical committee to carry out a comprehensive study on the closed DLC, especially for looking into the possibility of its reopening.
The committee had suggested three alternative options including revival of the unit either by the BCIC itself on a 'job-work' basis or leasing it out to the private sector.
Terming the DLC a full-fledged industrial unit, the committee also advised the authorities concerned to take all necessary measurers to resume its operation.
Besides, it suggested that the government would require making fresh investment worth Tk 54.50 million for the rehabilitation of the DLC if it wanted to run the unit.
Another study, however, suggested that the government might incur financial losses to the tune of Tk 21.60 million annually if it operated the unit by itself.
According to official sources, the authorities failed to resume the factory operation even after spending around Tk 100 million for its balancing, modernisation, rehabilitation and expansion (BMRE) more than four years back.

 

 
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