DHAKA, June 25: In a bold move the government has decided to close down the country’s first and the largest 52-year-old Adamjee Jute Mills (AJM) to cut the staggering losses being incurred by the state-owned enterprises (SOEs) annually.

The BNP-led coalition government is committed to privatizing all SOEs — both loss-making as well as the profitable ones — but strong, deeply entrenched vested interest groups within and outside the government have always tried to delay its implementation by one pretext or another.

It was decided that all the workers and staff members of AJM, around 25,000, will be given a ‘golden handshake’ and the government has already earmarked 3 billion taka ($51.7 million) for the purpose.

According to World Bank Dhaka Office’s Periodic Economic Update of July 2001, SOE losses increased over seven times during last two years, from 4.5 billion taka in FY1999 to 33.1 billion taka in FY2001. SOE losses in FY2001 increased by 51 per cent, from 22 billion taka in FY2000 to over 33 billion taka in FY2001.”

The Economic Review 2002, published by the finance ministry along with the budget documents, Bangladesh Jute Mills Corporation (BJMC) has incurred a total loss of 4.06 billion taka ($70 million) in FY2002 of which Adamjee Jute Mills (AJM) alone contributed 1.9 billion taka ($32.7 million). Besides, AJM’s accumulated losses stand at 12 billion taka, while current liabilities are 7.5 billion taka.