Spending Tk 6cr a year on a white elephant

"Though the mill is kept closed, it incurs a loss of about Tk. 6 crore a year due to maintenance cost that include tax, electricity bills and machinery depreciation", its Assistant Commercial Officer Kazi Monirul Islam told this correspondent.

The mill with an accumulated loss of about Tk 101.90 crore was reopened for the third time in September 2004 under a two-year contact with Karnaphuli Traders (KT) in Pabna. The mill was producing yarn with cotton, supplied by KT on the basis of payment of 'service charge'.

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The mill was earning Tk 5,991 per bale for producing yarn for KT, officials said. But as the KT stopped cotton supply about six months ahead of expiry of its contact, the mill authorities were compelled to lay off the mill. This time, the mill incurred a loss of about Tk 7.28 crore, they said.

About 400 workers who worked on 'no work no pay' basis are now jobless and 24 officials and employees are not getting salaries for 17 months.

After reopening, its authorities on several occasions expressed optimism that the mill would make profit if trade union is not allowed and smooth power supply is maintained, which were ensured during the period of production, some sources at the mill said.

The mill authorities now blame shortage of 'running capital' and old machinery for the recent losses. According to them, production was interrupted as many old spindles grind to a halt. These needed repair but that could not be done due to lack of spares, they claimed.

Its acting Chief Executive Abdul Salam claimed that the mill could not be run smoothly and profitably due to shortage of running capital.

"As the mill incurred loss, we could not arrange staff salaries for 17 months", he added.

Meanwhile, sources said, BTMC has again decided to resume production in the mill on the basis of service charge.

But most of its officials expressed doubt about profit earning by the mill on by realising only 'service charge' and said it should be privatised immediately.

Earlier, the mill was closed twice in 1999 and 2002 with an accumulated loss of Tk 85.61 crore.

The Magura Textile Mill with 25056 spindles was set up on 16 acres of land at Vitasair in Magura town at a cost of Tk. 37.77 crore in 1985. But it failed to earn profit since its inception.

The mill was closed in 1999 with a loss of Tk. 67.14 crore. In the wake of continued loss, BTMC decided to lay off the mill.

In such a situation, workers urged BTMC not to privatise the mill and agreed under government management on 'any condition'.

From March 2000 to January 2002, the mill produced yarn for Karnaphuli Traders in exchange of service charge. Workers worked on 'no work no pay' basis. But the mill failed to earn profit and was closed again. The loss during the period was about 18.47 crore, officials said.

BTMC then again decided to privatise the mill. But failing to do so due to pressure from different quarters and non-availability of buyer, BTMC reopened the mill on September 23, 2004 under new terms and condition for workers and started producing yarn for Karnaphuli Traders in exchange of 'service charge'.