Privatization in Bangladesh

Opportunities and Potentials

July 2007

Privatization Commission
Chief Adviser’s Office
Government of the People’s Republic of Bangladesh
Dhaka, Bangladesh
Sl. #Contents Page

… Preface
… Check Points
… Country Overview
Chapter-I: Background and Policy framework of Privatization

1 Background
2 Structure & Formation of Privatization Commission
3. Organogram of the Privatization Commission
4. Composition of the Privatization Commission
5. Objectives of Privatization
6. Functions of Privatization Commission

Chapter II: Process of Privatization

1. Privatization Processes
2. Process taken through to finalize the privatization deal
3. How can an investor participate?
4. Payment process

Chapter-III: Achievement and Current program

1. Achievements of Privatization Commission

2. Sector-wise distribution of privatized enterprises
3. Current Privatization Programs

Chapter IV: Supports and Incentives

1. Supportive regulatory arrangements

2. Post transfer support
3. Supportive financial sector
4. Investment Incentives

Chapter-V: Future Strategies and Conclusion

1. Future Strategies
2. Conclusion

2
 Preface

For Bangladesh, promotion of both foreign and local private investment is a

priority agenda to get the expected economic growth designing pragmatic,
challenging and interactive privatization programs coupled with appropriate reforms
in conformity with the real world of practice. To achieve this objective, Government
constituted Privatization Board on 20th March 1993 and subsequently got it converted
into a Commission in 2000 through enactment followed by a policy & an ordinance
delegating more administrative and financial authority putting it into a statutory
framework specifying objective obligations for assumption to give massive thrust.

To broaden the understanding of the investors, readers and cross section of

people, the Commission did feel a need to publish an informative booklet on
privatization system with a major focus on Structure of Commission, Achievement of
Privatization, Year wise status of privatization, Current programs, Process of
privatization, Payment system, Post transfer support, Supportive regulatory
arrangement, Admissible incentives and facilities etc. The aim of this booklet is to set
down in an orderly, logical manner the principles, guidelines, approaches, conceptual
foundation of analysis. The presentation begins with an introduction, background and
review of analytical techniques of the ongoing privatization programs.

As is usually the case, many of my colleagues have contributed enough time

and effort in bringing out this brochure and to all I owe a debt of gratitude.

Privatization Commission is keenly eager to present this booklet to the

readers to provide them the critical understanding on the topics detailed herein.
Comments and suggestions from investors & readers for further improvement are
welcome.

( Md. Abu Solaiman Chowdhury )

3
Check Points

Prior to taking a look into the text of the booklet kindly be sure to check the
following points:-

- To contact Privatization Commission through email, phone, fax for any

query you have.

- To contact Bangladesh Mission for any information you need about

ongoing privatization programs.

- Information detailed in this booklet may be modified at any time in line

with the changes in policies and procedures designed by appropriate
authority

- Keep visiting (www.pc.gov.bd) for information update.

- Keep contact with Privatization Commission for a perfect decision to

participate in the privatization programs.

4
 Country Overview

Bangladesh is located in South Asia, with about 140.6 million people and endowed
with abundant supply of natural gas, fertile land and water resources. It has also a
trainable, zealous, skilled, hardworking and disciplined workforce. Geographically,
the country has easy as well as convenient access to international sea and air route.

The Goldman Sachs Economic Research* includes Bangladesh in their composite

projections (next -11 ) in respect of the 22 Largest Economies of the world in 2025
and also in the largest economies in 2050 based on US$ GDP,real GDP growth,
income per-capita, international demand and exchange rate paths for each of these
economies.

“The 15th Survey of Investment – Related Cost Comparison in Major Cities and
Regions in Asia “conducted by the Japan External Trade Organization (JETRO) in
March 2005 revealed that “the Investment cost in Bangladesh has become cheaper
compared to the last year and Bangladesh Succeeded to develop herself as more
competitive than other countries which are potential from the investment point of view
to foreign investors”.

a. Climatic condition and location :

Country name : The People’s Republic of Bangladesh
Geographic Location : North-Eastern part of South Asia Coordinates
between 20034’ and 26038’ North Latitude and
between 88001 and 92041 East Longitude
International Boundaries : North – India (West Bengal & Meghalaya)
West – India (West Bengal)
East – India (Tripura & Assam) and Myanmar
South – The Bay of Bengal
Area : 147,570 square km
(Territorial water –12 nautical miles)
(Exclusive Economic Zone – 200 nautical miles)
Capital City : Dhaka (Metropolitan Area 522 sq km)
Standard Time : GMT + 6 hours
Climate : Sub-tropical monsoon
Climate Variations : Winter : November – February
Summer :March – June
Monsoon :July – October
Rainfall :1,194 mm to 3,454 mm
Humidity: Highest 99 percent (July)
Humidity : Highest : 99 percent (July)
Lowest : 36 percent (December & January)
b. Demographics (FY 2006-2007 projected)
Population : 140.6 million
Male-Female Ratio :2002 : 105.2
Population Growth Rate :2004 : 1.42%
Population Density 2005 : 953/km2 (Projected)
Adult Literacy Rate,15 years+: (2002) : 62.66%
Language : Bangla : 95%
Dialects : 5%
English : Widely spoken in all parts of
Bangladesh
Religion : Muslim 88.3%, Hindu 10.5%, Buddhist 0.6%,
Christian 0.3%, Animist and believers in tribal

5
 faith 0.3%
Labor Force : Total Labor Force (million) : 44.30 million
c. Resources
Food : Rice, vegetables, pulses, fish and meat
Principal Crops : Rice, wheat, jute, tea, tobacco and sugarcane.
Principal Rivers : Padma, Brahmaputra, Jamuna, Meghna,
Karnaphuli, Teesta
Mineral Resources : Natural gas, limestone, hard rock, coal, lignite,
silica, sand, white clay, radio-active sand etc.
d. History & Government
History : Recorded history traceable to the 4th century
B.C. Bangladesh with clear evidence of
flourishing civilization consisting of cities,
palaces, temples, forts, seats of learning and
monasteries.
1200: Advent of Islam, enjoying periods of
prosperity under Muslim rule till 1757;
1757: Beginning of British colonial rule;
1947: End of British colonial rule;
Present Bangladesh territory (East
Bengal) become East Pakistan as part of
Pakistan
1971: Emergence of the sovereign state of
Bangladesh through a 9-month long war of
liberation.
Government : Parliamentary form of Government headed by
the Prime Minister.
The President is the constitutional head of the
state.
e. The Economy (FY 2006-07)
Currency : Taka. In short: Tk.
GDP at Current Price : Tk. 4,674.97 billion
US$ 63.054 billion
Per Capita GNI : US$ 482
GDP Growth (at Constant : 6.51%
Price)
Investment Rate : 24.33% of GDP
National Savings Rate : 29.15 % of GDP
Exports : US$ 10,526 million (FY-2005-2006)
Imports : US$ 14,746 million (FY-2005-2006)
Exchange Rate (Average) : US Dollar = Tk.66.68 (FY-2005-2006)
with selected International Euro = Tk.83.32
Currencies (2006) British Pound = Tk.124.86
Bank Rate : 5.00%
Major Industries : Textiles, Garments, Basic Chemical, Paper,
Newsprint, Fertilizer, Leather and Leather
Goods, Sugar, Cement, Fish Processing,
Pharmaceuticals, Jute, Tea, etc.
Traditional Export Items : Raw jute, jute manufactures (hessian, sacking,
carpet backing, carpets), jute products, tea,
leather, leather products etc.
Non-traditional Export Items : Garments, frozen shrimps, other fish products,
newsprint, paper, naphtha, furnace oil, urea,
ceramic products etc.
Major Imports : Wheat, oil, seeds, crude petroleum, raw cotton,

6

f.
International Airports
Domestic Airports
Sea Ports
Inland River Ports
edible oil, petroleum products, fertilizer, staple
fibers, yarn, iron & steel, capital goods, etc.
Air, Sea and River Ports
: Zia International Airport, Dhaka,
Shah Amanat International Airport, Chittagong
Osmani International Airport, Sylhet.
: Dhaka, Chittagong, Sylhet, Syedpur,
Cox’s Bazar, Rajshahi, Jessore and Barisal.
: Chittagong and Mongla.
: Dhaka, Chandpur, Barisal, Khulna, Narayanganj,
Sirajganj etc.

Source:1.Global Economic Paper, Issue 134,1 December 2005,GOLDMAN SACHS ECONOMIC

RESEARCH,
2.Bangladesh Investment Handbook,2007 Board of Investment
3.Bangladesh Economic Review,2006 and 2007

7
 Chapter I :
Background and
Policy framework of Privatization

8
 1 Background
Privatization programs got its virtual start in Bangladesh in the mid-seventies. The
first round of privatization was put to work following the post independence thrust on
economic growth. The second phase of privatization (or denationalization) took place
in the first half of the 1980s and covered jute and textile mills owned originally by
Bangladeshi citizens prior to independence.

The Revised Investment Policy designed in 1975 put much emphasis in the
development of private sector providing enormous incentives to spur private
investment. A Disinvestment Board was set up and a total of 255 SOEs were
privatized in between 1975 to 1981 and about 115 of these SOEs, were divested
through the office of the then Director General of Industries (DGI). The New Industrial
Policy (NIP) of 1982 marked a major shift towards privatization where total of 222
SOEs got privatized under the NIP’ 1982.

The privatization programs gained gradual momentum and government made liberal
Industrial Policy in 1991, where 42 enterprises were identified for privatization. On its
further move, the number of enterprises was increased to 62 by adding 20 textile
mills under the Asian Development Bank (ADB) sponsored Industrial Sector
Program. In the meantime, the government created an Inter-Ministerial Committee on
Privatization (ICOP) in the year 1991 to develop a privatization policy. In 1993
Privatization Board was setup and assigned with the responsibility of privatizing State
Owned Enterprises identified by the Government. Subsequently, the Privatization
Board was converted into a Commission delegating more administrative and financial
authority to intensify the privatization program drive.

Structure & Formation of Privatization Commission

2
To better implement the privatization programmes for benefiting the stakeholders, the
Privatization Board was constituted on 20th March 1993 through an administrative
ordinance. The privatization board kept on discharging its obligations until July 2000
as per the prescribed guidelines & policies. Later, Privatization Act was formulated on
the 11th July 2000 primly to provide massive thrust to the ongoing privatization
programs & thereafter, privatization board was replaced by Privatization Commission
on 30th July 2000. Below is the organogram of the Privatization Commission:

3 Organogram of the Privatization Commission

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Director (Accounts) 'LUHFWRU

9
 4 Composition of Privatization Commission:-

The Privatization Commission shall comprise the following membership:-

(a) A Chairman, of the rank and status of a State Minister who shall be
appointed by the government
(b) Six Members of the Parliament, who shall be nominated by the Leader of
House.
(c) Two full-time Members, do the rank and status of Secretary/Additional
Secretary of the government.
(d) Secretary, Ministry of Industries, Ex-Officio.
(e) Secretary, Ministry of Commerce, Ex-Officio.
(f) Secretary, Finance Division, Ministry of finance, Ex-Officio.
(g) Secretary, Ministry of Textile, Ex-Officio.
(h) Secretary, Ministry of Jute, Ex-Officio.
(i) Chairman, Securities & Exchange Commission, Ex-officio
(j) President, Federation of Bangladesh Chambers of Commerce & Industry,
Ex-Officio.
(k) One Representative nominated by the government from any professional
organization, for two-year term.

Objectives of Privatization
5

The objectives of Privatizations are outlined below:-

1. Social welfare through efficiency gains.

Realising the growth and increasing role of private sector Industrial, commercial
and service enterprises in terms of their quality, quantity, management
efficiency. Privatization of SOES assumed as a better solution to contribute to
the expansion of existing units, GDP, increase in employment opportunities
including other socio economic benefits.

2. Inflow of foreign investment, improvement of efficiencies & development

of mutual ties.

A well founded privatization program is better able to attract foreign investment

having far reaching effects on management efficiency & technology.

3. Receipt of Revenue.

Minimising the financial pressure on the Government-exchequer, stimulating

the proactive ness to face constraints to respond to the market demand due to
obsolete machinery, poor productivity, poor management, cost ineffectiveness
and under capacity utilization etc. and also to maximize productivity and
revenue earnings from the sales proceeds of the products, privatization
program sounds effective.

4. Diversification of the public sector resources from loss-making

enterprises to other socially useful enterprises.

Paradiem shift in reduction of continuous financial loss it is a crucial need to

transfer the SOES to the private sector where efficiency and potential re-

10
 investment scope is available. It will immediately help the government to tighten
the money burden and free to grant enormous subsidy to the losing sector.
More over the privatization will assist the government to divert the fund to the
socially useful project like education, health service, Defense, social security
and poverty alleviation.

5. Creation of employment opportunities and its protection through

widespread competitiveness.

Privatization is helpful to create more employment opportunities improving

operational, production, management and plant utilization efficiency. It
therefore, in the long run will tremendously be useful to create more
employment opportunity and make substantial contribution to GDP.

6 Functions of Privatization Commission

Below are the important functions of the Privatization Commission. The

Commission is to:-

(i) initiate all effective measures & steps necessary to implement of

policies framed by the government for privatization.

(ii) value the industrial or commercial units identified for privatization at

current market price.

(iii) check the accuracy of the price through intensive & extensive survey.

(iv) design the terms of reference of the tender.

(v) make necessary arrangement to float the tender & to short listing,
analyzing and accepting the tenders.

(vi) prepare statements of the past performance, production, trading, the

future prospects of SOEs for the understanding of the bidders.

(vii) discharge all functions relating to the transfer of the SOEs based on
the accepted tender.

(viii) provide suggestions from time to time to the government to modify,

amend & review the privatization policy.

(ix) review the progress of performance/achievement regularly & to get

the government posted accordingly.

(x) arrange seminar & symposium to create public awareness about

privatization programs.

(xi) provide post transfer service to the clients.

11
 Chapter II:
Process of Privatization

12
 Privatization Process
1
Privatization Commission takes through some procedural steps to accomplish its
process. Below are its details.

€ Direct sale through tender : Invites international tender for investors

providing around one and a half month’s time
for participation in the tender.

€ Sale of Shares : Shares are off-loaded as per provision of the

Privatization policy 2001 and the
Memorandum and Articles of Association of
the concerned companies.

The privatization process shall entail the flowing procedural steps.

(i) The government in consultation with the Commission, design policy on

privatization of public industrial and commercial enterprises, and bring them in
public.

(ii) Government in line with the policy perused identifies SOEs for privatization
and hand it over the list to the privatization commission for action.

(iii) The Commission upon receipt of the list, makes proper valuation of SOEs
through the nominated/enlisted relevant agencies.

(iv) Before finalization of the report, the Commission shall sit for discussion with,
the representatives of the Ministry, Division, Corporation etc. for decision.

(v) Upon the finalization of the valuation report, the Commission shall invite
tenders for the transfer of SOES.

(vi) Interested local and foreign buyers shall be eligible to participate in the
tender.

(vii) In the case of transfer of shares of any public industrial or commercial

enterprise, the shares concerned may be transferred either directly through
tenders or through the stock exchange.

(viii) The Commission shall invite fresh tenders if, no bids are received, or the
prices quoted in the tenders received are not acceptable.

(ix) The government shall, in the process of conducting any agreement in relation
to privatization, take necessary measures to secure the safety of the
officers/employees/workers of any enterprise or organization.

(x) When the transfer process for privatization shall be at the final stage the
Commission, shall submit its recommendations to the government for
approval before signing the necessary transfer document or contract.
(xi) The privatization commission , by itself, shall, after receiving the
recommendations, conclude the transfer document or agreement.

(xii) Money received from privatization of any enterprise or organization shall be

deposited to the consolidated fund of the Republic.

13
 (xiii) Money received from privatization shall first be used to meet the outstanding
loans and liabilities of the enterprise/organization concerned.

Below is the flow chart of privatization process.

2 Flow chart of Privatization process

GOB decided
SOEs for
privatization

Valuation of the Internal

Enterprise through preparation for
independent privatization
valuer

Invitation of open
bid/tender

Evaluation of the
bid

Issue Letter of Inventory and

Intend(LOI) to preparation for
the successful handing over
bidder

Obtain primary Contract

deposit signing

Final physical
handing over

Follow up

14
 3 How an investor can participate?

A prospective investor can participate in the process of privatization as under:

Step-1: Consult the enterprise profile developed by the Privatization Commission

Step-2: Follow the advertisement published in the news paper inviting bid. Follow
the web-site information of the Privatization Commission
( www.pc.gov. bd).
Step-3: Procure tender document from the Privatization Commission
Step-4: Submit the tender document along with the earnest money @ 2.5% of the
price quoted in the form of Bank draft/pay order etc. (Payment can be
made in local or foreign currencies. Buyers generally get at least 30 days
time to submit their bid.However, the bidders will get at least 60 days time
in case of first tender).
Step-5: Successful bidder(s) will get Letter of Intent (LOI) after the approval by the
Commission.
Step-6: Successful bidder has to deposit down payment of sales price.
Unsuccessful bidder will get their earnest money back.

4 Payment Process

Privatization Commission has designed simplified & incentive oriented payment process for
the investors. Rebates are admissible to the buyers in the event of making accelerated
payments. The payment process is charted below:-

Payment process
Sl.No. Description Time line Amount
For direct sale through tender
1. Earnest Money At the time of the submission 2.5% of the quoted
of bid price
2. Down payment Within 30 days of the issuance 32.5% of the quoted
of Letter of Intent (LOI) price
3. Half yearly Installment Half yearly ( within three years 65% of the quoted
after making down payment) price with 9%
compound annual
interest ( interests
will be calculated on
quarterly basis)
4. 75% Payment at a time Within 30 days of the issuance 15% rebate on
of Letter of Intent (LOI) quoted price
5. 100% Payment at time Within 30 days of the issuance 20% rebate on
of Letter of Intent (LOI) quoted price
6. Payment of stock and As per stipulated conditions in As per rules
stores the agreement
7. Payment of Liabilities As per stipulated conditions in As per rules
the agreement

8. An additional rebate of 5% of the total sales price will be granted if the buyer makes
the full payment in freely convertible foreign currency.

For sale of shares

1. Earnest money At the time of the submission 30 % of the quoted
of bid price
2. Rest of the payment Within 60 days of the issuance 70 % of the quoted
of Letter of Intent (LOI) price
3. Rebate is not applicable for the buyers of shares

15
 Chapter-III:
Achievement and Current program

16
1 Achievements

A World Bank study (1994) reveals that, around 305 state owned enterprises (SOEs)
comprising industrial, commercial and financial institutions were put under public
ownership by 1974-75. However, the size of public sector enterprises has reduced
considerably after the paradigm shift in the government’s economic policy towards
privatization.

Since the establishment of the Privatization Board in 1993 and thereafter the
Privatization Commission in 2000, 74 state owned enterprises were privatized of
which 54 were privatized through outright sale and 20 through offloading of shares.
Privatization activities are gaining momentum. This reflects the increased
participation of the private sector in privatization.

Table-1: Year-wise status of privatization

Number of enterprises privatized

14
12
10
8
6
4
2
0
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Sector-wise distribution of privatized enterprises

2
While considering the sector-wise distribution of privatized enterprises, the privatized
74 enterprises belong to textiles, jute, manufacturing, chemicals, food, leather and
banking sector.

Table: 2—Sector wise status of privatization

Number of Enterprises Privatized

25
20
15
10
5
0
industries

Industries
Textiles and

Processing

processing
Manufacturing

Banks (Share)
Jute

Chemical
Food and
Handloom

Forest
Sugar
Fish

Engn &

17
 Current Privatization Programs
3
Privatization program is a fast moving process. Preparations are now on track to
dispose off SOES to the private investor. Non-financial public enterprises in the
country has been categorized into seven sectors, namely –

(i) Industry
(ii) Power, gas and water,
(iii) Transport and Communication,
(iv) Trade,
(v) Agriculture,
(vi) Construction and,
(vii) Services.

Presently, 25 non-financial SOEs have been included in the Commission’s current

programs to get them disposed off. Below is its list:-

1. Partical Board and Veneering Plant, Chittagong;

2. National Sugar Mills, Kishoreganj;
3. Daulatpur Jute Mills Ltd., Khalispur, Khulna;
4. Procurement & Sales Organization, Kaptai, Rangamati;
5. Lumber Processing Complex, Kaptai, Rangamati;
6. Karnafuli Timber Extruction Unit, Kaptai, Rangamati
7. Arco Industries Ltd., Chittagong (11.5%);
8. SAF Industries Ltd., Noapara, Jessore (13.63%);
9. Rangamati Textile Mills Ltd., Ghagra, Rangamati;
10. Chittaranjan Cotton Mills Ltd., Godnile, Narayanganj;
11. Tangail Cotton Mills Ltd., Gorai, Tangail;
12. Magura Textile Mills Ltd., Magura;
13. Quomi Jute Mills, Rayganj, Sirajganj;
14. Textile Facilities Center, Chowmohani, Laxmipur;
15. Rajshahi Silk Factory, Rajshahi;
16. Thakurgaon Silk Factory, Thakurgaon;
17. Dhaka Leather Company Ltd., Nayarhat, Savar, Dhaka;
18. North Bengal Paper Mills Ltd., Pakshi, Pabna;
19. Chittagong Chemical Complex, Chittagong;
20. Karnafuli Rayon & Chemical Ltd., Kaptai, Rangamati;
21. Bangladesh Can Company Ltd., Chittagong (66.67%);
22. Monowar Jute Mills Ltd., Siddirganj, Narayanganj;
23. Aroma Tea Ltd., Fauzdarhat, Chittagong;
24. Service Facilities Center (SFC), Bancharampur, Brahmanbaria;
25. Handloom Facilities Center (HFC), Raypura, Narsingdi;

Sector wise programme

Sugar

Engineering

Tea Garden

Timber

Chemical

Textile and Handloom

Jute

0 2 4 6 8 10

18
 Chapter IV:
Supports and Incentives

19
1 Supportive regulatory arrangements

For making sound investment climate in Bangladesh Government made supportive

regulatory arrangements. Below are the act and regulations to protect the interest of
the investors.

ƒ The Foreign Private Investment (Promotion and Protection ) Act, 1980

ƒ The Privatization Commission Act ,2000
ƒ The Privatization Policy ,2001
ƒ The Privatization Regulation ,2007
ƒ The Investment Board Act ,1989
ƒ The Companies Act 1994
ƒ The Bangladesh Export Processing Zone Authority Act 1980
ƒ The Bangladesh Private Export Processing Zone Authority Act 1996
ƒ The Industrial Policy 2005
ƒ The Import Policy Order 2006-2009
ƒ The Export Policy Order 2006-2009
ƒ The Private Sector Infrastructure Guide Line 2004
ƒ The Bank Company Act, 1991
ƒ The Securities and Exchange Commission ( Public Issue) Rules, 2006
ƒ The Securities and Exchange Commission (Right Issue) Rules ,2006

2 Post- transfer support

Privatization Commission provides post-transfer support to the investors for the

expansion of the enterprises, settlement of any claim and counter claim etc.Apart
from the maximization of revenue, privatization commission also provides importance
to the intention, planning, and goodwill and employment opportunity to be created by
the buyers of the privatized enterprises.

3
Supportive Financial sector

Bangladesh Financial Sector includes the banking institutions, other financial

institutions and capital market. Bangladesh Bank is the Central Bank of Bangladesh.
There are 4 Nationalized Commercial Banks (NCB), 5 Nationalized Specialized
Banks, 30 Private Commercial Banks, 9 Foreign Commercial Banks and 28 non-bank
financial institutions. Apart from that, Investment Corporation of Bangladesh (ICB),
House Building Finance Corporation (HBFC), Dhaka Stock Exchange (DSE) and
Chittagong Stock Exchange (CSE) are also working in the financial market of
Bangladesh.

Financial sector contributes to investment by providing modern banking facilities,

facilitation of import of raw materials and export of products, term loans including
syndicate financing etc. There are credit rating arrangement for assessing the
performance of the Banking and financial institutions. Other than those both public
and private sector insurance companies are available at Bangladesh. Private sector
leasing companies are also putting their efforts in stimulating investment through
providing project credit.

Moreover, Securities and Exchange Commission as an agency provides support for

operating and drawing resources from capital market.

20
4 Investment Incentives

Private sector in Bangladesh is now playing pivot role to better shape the future
economy of Bangladesh. To further spur private investment, Government of
Bangladesh has provided adequate incentives. Below is its summary:-

Approval Authorities Major Fiscal Incentives Major Non-Fiscal

Incentives
Ministry of Finance Tax Holiday Remittance of royalty,
technical know-how,
technical assistance fee
Bangladesh Bank Accelerated Depreciation 100% foreign equity
allowance instead of tax allowed
holiday
National Board of Concessionary income tax Unrestricted Exit Policy
Revenue in lieu of Tax Holiday and
Accelerated Depreciation
Allowance
Bangladesh Export Concessionary duty on Full Repatriation facilities
Processing Zones imported machinery of dividend and capital at
Authority the event of exit
Board of Investment Avoidance of double Permanent Residence
Taxation Permit on investing
US$ 75,000 and
citizenship Offer for
investing US$ 5,00,000
Bangladesh Small & - -
Cottage Industries
Corporation

21
 Chapter-V:
Future Strategies and Conclusion

22
1 Future Strategies

Privatization Commission, in order to quicken the implementation of the SOEs

identified for Privatization plan , is to design policy & implementation strategies based
on reality in future in line with the provisions of privatization policy, rules and
regulations. Below are the strategies it expects to formulate in future.

i). To design sound planning to accurately identify SOEs in association with the
Government and make a comprehensive list for privatization conducting
extensive & intensive survey and bring them in public through press &
National dailies for understanding at regular interval.

ii) To provide effective package of counseling-service to the investors interested

to participate in the privatization program drawn up by Government in
partnership with the Privatization Commission.

iii) To closely monitor the progress of implementation of privatization programs

and initiate quick steps to provide it speedy momentum to get the job perfectly
accomplished within the prescribed time frame.

iv) To constantly review the progress in the meeting at a regular interval and take
effective measures to address the problems, if identified in consultation with
the Government.

v) To constitute technical committee comprising experts to make intensive study

to modify, amend the policies, regulations & rules to match the need with the
approval of the Government.

vi) Brochure / booklets shall be published at regular interval updating information

concerning privatization programs to broaden the understanding or the
readers, investors interested to participate in the privatization programs.

vii) Annual reports shall be published in each year focusing the yearly
achievements against the set targets and overall performance.

viii) To organize seminars, symposium & open discussion session to escalate

public awareness.

ix) Management information center shall be set-up in the Commission to collect,

up-date, review and preserve the secondary & primary data concerning
privatization.

x) The list of Government owned industrial commercial and service-oriented

units shall be prepared underlining the prospects and shall be brought in
public through media to broaden understanding.

xi) To take necessary steps to simply the system, procedures, and methods of
privatization process from time to time with the approval of the Government
best suited to the need of the investors taking feedback.

xii) To make co-ordination meeting with the Government at a regular interval to

update information all about of privatization programs.

23
2 Conclusion

Privatization strategy and success, every where, dependant on prevailing conditions,

problems, scope and solutions. Although many of the more basic privatization issues
appear almost everywhere, transcending cultural barriers, innovators empathetically
tailors privatization efforts to local solutions. Without denial of the fact of increased
role and efficiency of the private sector a competitive and strong government sector
is needed to welcome the private participation. The responsibility for greater
efficiency and higher production must be shared by both the private and public
sectors. The problem is how best to mix these sectors, so that the welfare of both the
individual and the society can be effectively advanced.

Lessons learned from the privatization in Bangladesh still support endeavours of the
government and its pro-private sector policy. But it also recognises and expects the
complementary relationship of the growth and efficacy in public sector. Increased
interest of the domestic and foreign investors towards privatization program of
Bangladesh having significance for our economic growth.

To respond to this vital need, Privatization Commission takes initiatives to bring out
an informative booklet for the readers, participants to give them critical understanding
about privatization programs designed by the Government in line with the provision
of privatization policy, rules & regulations promulgated by the Privatization-Act, in
force. Efforts given by the Commission in this regard would be considered effective if
the illustrative text & information provided in the booklet is proved useful to the
readers &investors.

For further information and support - please contact:

Privatization Commission
Level 8, 9 and 10. Government Central Transport Pool Building,
Secretariat Link Road, Dhaka-1000
Bangladesh

Phone: PABX :( 8802) 9563763-64

Fax: (8802) 9556433, 7168564
e-mail:pb@bdonline.com
pc@bdonline.com
Website: www.pc.gov.bd

Disclaimer

This Booklet provides necessary information guidance to the intending private

investors interested in purchasing state owned enterprises selected for privatization
in Bangladesh. However, prior to taking any investment decision, investors are
encouraged to make further independent check from Privatization Commission and
other relevant authorities to be sure of the updated information and legislation.

Published by: Privatization Commission, Bangladesh

First edition: June, 2007
Design:
Printing:

Online version of Brochure is available at www.pc.gov.bd

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