Revival plan shelved, Beximco factories to be put on open tender
Govt scraps near-ready Japan deal, CA instructs Bida to oversee leasing process
Highlights
- Government opts for open tender to lease Beximco factories, dropping the Revival deal.
- BIDA assigned to manage the leasing process.
- Beximco owes over Tk35,000 crore in defaulted loans.
- Priority set to recover Tk600 crore paid for workers' dues.
The interim government has decided to lease out debt-ridden Beximco factories through an open tender, shelving a near-final deal with the Japanese firm Revival to resume its textile unit, as lenders scramble to recover over Tk35,000 crore in defaulted loans.
The decision was made on the instructions of Chief Adviser Muhammad Yunus, who has assigned the Bangladesh Investment Development Authority (Bida) to oversee the leasing process through an open tender.
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The move came to light from the minutes of a meeting held on 8 December of the Advisory Council Committee reviewing the labour and business situation of enterprises at the Beximco Industrial Park.
Although negotiations with Revival had earlier reached an advanced stage, the government decided not to proceed as the leasing proposal had come from a single entity, which officials felt was inconsistent with public procurement principles.
Instead of finalising the lease, Janata Bank initiated steps to auction several Beximco Industrial Park units to recover outstanding loans. However, following an application by the Beximco Group, a court imposed a stay on the auction process, halting the sale for now.
At the meeting, Janata Bank Managing Director Md Mazibur Rahman said although discussions had been underway to frame a tripartite agreement involving Beximco, Revival Japan Projects and Janata Bank, the deal could not be concluded in the public interest. Acting on instructions from higher authorities, the bank has since published newspaper advertisements to sell mortgaged assets of the Beximco Group to recover loans.
Nazma Mobarek, secretary of the Financial Institutions Division, said a joint meeting involving her division, the Finance Division, the Bangladesh Bank, Janata Bank, Beximco Group, and Revival failed to reach consensus on the proposed agreement.
Labour Adviser Brigadier General (retd) M Sakhawat Hossain, who chaired the meeting, said the chief adviser had already entrusted Bida with responsibility for leasing out the factories, leaving the committee with no further role in the matter.
However, the meeting decided that priority must be given to recovering the Tk600-crore interest-free loan provided by the government to pay workers' dues at the factories.
Beximco's crises
Beximco Textiles Limited, which comprises 15 factories located inside the industrial park, is owned by Salman F Rahman, former private industry adviser to ousted prime minister Sheikh Hasina. Salman is currently in jail in several criminal and corruption cases.
The factories were shut down in February after months of unpaid wages and mounting loan defaults. At the time, the finance ministry extended a Tk600-crore interest-free loan to clear workers' salaries.
Before the shutdown, Beximco Textiles owed around Tk35,000 crore to lenders, of which nearly Tk23,000 crore was owed to Janata Bank alone. All of these loans are currently classified as defaulted.
A senior labour ministry official said the government has long been considering restarting the Beximco textile units due to their advanced machinery and established global buyers. To preserve employment, the authorities explored operating the factories through a third party, which led to talks with Revival.
Draft agreement with Revival
Under the draft agreement prepared earlier, Revival had proposed investing $20 million as working capital while taking no responsibility for Beximco's existing debts. The Japanese firm would operate the factories using Beximco's machinery, infrastructure and brand reputation, taking around half of the net profits as commission. The remaining profits were to be used to repay Janata Bank loans and the government's interest-free loan, with Beximco receiving no direct proceeds. The deal was ultimately abandoned following directives from higher levels of government.
Revival declined to make an official comment. However, a company representative told The Business Standard on condition of anonymity that Revival had not been formally informed about the government's plan to float an open tender.
The representative said the company remains in discussion with the government and would decide whether to participate after reviewing the tender conditions, adding that Revival remains interested in operating the factories.
Rationale for open tender
BGMEA President Mahmudul Hasan Khan Babu said that while private companies can be run by third parties through contractual arrangements, inviting open tenders is appropriate given the government's involvement.
He stressed, however, that the factories must be handed over to operators with proven experience, credibility with international buyers and the ability to make the business profitable.
"Running a factory alone does not guarantee profit," he said, noting that the garment and textile sector depends heavily on buyer confidence and steady orders. "The government must thoroughly assess whether the selected operator can manage operations efficiently and generate profits; otherwise, loan recovery and job protection will not be possible."
