THE Privatisation Commission (PC) has received the highest bid of Rs156 million for the sale of assets, plant, machinery and equipment of Lasbela Textile Mills (LTM). The PC has recommended its approval to the Cabinet Committee on Privatisation (CCoP).

Of the 43 expression of interest (EoIs), only 16 parties reached the bidding point. The top three bidders entered in the second round of open bidding and improved their bids by Rs1 million. The final round received the highest bid of Rs156 million from Mr Rais Ahmed of Karachi.

As per government’s policy, 21 units of the remaining 41 units in the public sector are scheduled to be privatised during the current financial year and LTM is one among the eight units scheduled to be sold in the third quarter of this fiscal. The rewards from privatisation do not seem to be big enough to compensate for all the associated socio-political risks for pursuing the privatisation policy. Exactly, same is in the case of LTM’s privatisation.

LTN is a project of Iran-Pakistan Industries (Pvt) Limited (IPI) situated at Uthal, District Lasbela. The machinery is part of fully integrated units of 50,000 spindles and 1,100 looms with complete dyeing and finishing facilities. The plant was set up in 1976 and it started production in January 1980 but was closed down in 1983. The closure of this mill is a story of injustice done to the people of this most backward province.

The mill was closed down when it had reached the production stage. Iran did her best to keep it running, even offered to buy their production on payment in advance, but the management turned a blind eye to the benefits the local people could enjoy from the project and closed down it abruptly. Thousands of labourers, lost jobs.

The mill may not be categorized as a sick unit. It was closed mainly to serve the vested interests. The imported machinery installed at the mill has been of no avail since its closure. Now Balochistan is producing finest quality of cotton. This is the right time to re-open closed textile mill. The closed mill has potential to survive and prosper.

Independent experts are of the view that at the initial stage, the mills can be run on ‘ no profit no loss basis’. The government can borrow loans from the domestic or foreign donor agencies to revive the two mills.

Realistically speaking, industrialisation in private sector does not offer much scope in Balochistan in the current situation. The industrialists in the past got all the incentives from the government including tax holiday, soft loans, exemption from custom duty etc. but as soon as incentives were withdrawn, they took away every thing including machinery declaring the industries sick.

Here the example of sick units in Lasbela district may be cited. When the federal government refused to extend the tax holiday and other incentives, they simply closed down their factories. The shifting of the industrial base from Uthal to Hub near Karachi plagued industrialisation and served the special interests only. Balochistan is not so developed that the private sector can play an effective role in setting up big industries.

The mill was established with the financial assistance from government of Iran in public sector. Officials of ministry of production and Pakistan Industrial Development Corporation (PIDC) sabotaged the industrialisation process.

The reality is that industrialisation process was put on track in the province in 1980 when Pak-Iran textile mills at Quetta and Uthal were established and mills were closed due to inefficient and corrupt managers.