Recasting Bangladesh’s idle industrial assets 

The government's plan to revive 44 closed or underused state-owned factories has attracted 86 proposals from 14 major business groups.

The proposed investments cover agro-processing, electric vehicles, engineering, renewable energy, data centres and automobile components. Spread across more than 10,000 acres, many sites already have utilities, transport access and industrial infrastructure.

Keeping such valuable public assets idle is economically unjustifiable.

However, proposals are not investments. Success must be measured by factories entering production, fresh capital and technology, sustainable jobs, and lessons applied from Bangladesh's past industrial failures.

What past reforms teach us

After liberation, nationalisation was necessary to protect abandoned factories, jobs and industrial assets.

By 1974, the public sector controlled about 350 enterprises and over 90% of industrial fixed assets. Yet political interference, overstaffing, weak management and limited commercial accountability turned many into persistent loss-makers.

Privatisation from the 1980s produced similarly mixed results. Some factories recovered, but others were cheaply acquired, stripped of assets or closed for their valuable land. Of 38 enterprises privatised between 2000 and 2014, only 14 remained fully operational, while 20 had closed.

The lesson is clear: neither state nor private ownership alone guarantees success. Bangladesh now needs a third model—professional partnership backed by fair valuation, binding investment commitments, commercial discipline and rigorous monitoring.

Lessons from other Asian countries

Asian experience shows that reform is not simply a choice between state ownership and privatisation. Successful countries classify assets, professionalise management, introduce private capital selectively and enforce measurable accountability.

Vietnam: Asset-specific, phased reform

Since Doi Moi began in 1986, Vietnam has gradually merged, closed and partially privatised state enterprises while retaining control in strategic sectors.

Bangladesh should similarly assess each factory separately—leasing some, forming joint ventures for others, repurposing unsuitable sites and retaining limited state participation where strategically justified.

Malaysia: Separate ownership from management

Malaysia reformed government-linked companies through professional boards, performance targets, leadership accountability and greater disclosure.

Its key lesson is to separate the government's roles as policymaker, regulator and owner from management's role as operator. Bangladesh should therefore use independent experts for valuation, transaction design and monitoring rather than leaving the process entirely to the parent corporations.

South Korea: Performance measurement

South Korea regularly evaluates public enterprises against financial, operational and public-service indicators, linking leadership incentives to results.

Bangladesh should publish targets for investment, production, employment, technology transfer, local sourcing, exports and environmental compliance. Revival must support industrial transformation, not merely dispose of idle property.

Commercial independence in Singapore

Singapore demonstrates that public ownership can succeed without bureaucratic interference.

Professionally governed holding companies, joint ventures and management contracts offer alternatives to both ministry-run factories and outright privatisation. Bangladesh should adopt this principle through professional governance, audited accounts and commercial independence.

Ensuring that investment creates industry

The initiative must revive industry, not become a transfer of valuable public land. Contracts should prevent delayed production, land speculation and conversion to unrelated commercial uses.

With one group reportedly submitting 35 proposals for 16 factories, the government must also assess financing capacity and market concentration. The goal should be genuine production, technological upgrading and broader entrepreneurship—not greater land concentration among a few conglomerates.

The lesson is clear: neither state nor private ownership alone guarantees success. Bangladesh now needs a third model—professional partnership backed by fair valuation, binding investment commitments, commercial discipline and rigorous monitoring.

Towards a credible revival

First, conduct independent technical, legal, financial and environmental audits of every site, covering ownership, debt, liabilities, encroachment, machinery, contamination and utilities.

Second, value land, buildings and machinery separately. The government should generally retain land ownership and offer conditional leases rather than outright sale.

Third, use competitive bidding with published criteria and disclose bidders' beneficial ownership, proposed investment, evaluation scores and contractual commitments.

Fourth, assess bidders on their equity, technology, implementation capacity, employment potential and market prospects—not reputation alone. Loans secured against public assets should not count as investors' equity.

Fifth, contracts must specify deadlines for financing and production, minimum investment and employment, performance guarantees and automatic repossession for non-compliance. Unauthorised subleasing, mortgaging or land-use changes must be prohibited.

Sixth, provide transparent arrangements for retaining, retraining, redeploying or compensating workers. Sugar mills should also be integrated with farmers, food processing, cold storage and bioenergy.

Finally, BIDA should maintain a public dashboard tracking investment, implementation, production, employment and compliance. Annual audits and five-year reviews should determine whether leases continue, change or end.

Turning initiatives into industrial renewal

The government deserves credit for taking a timely and pragmatic initiative to bring idle public assets back into productive use.

The strong response from the private sector reflects both the commercial potential of these sites and growing confidence in a partnership-based approach to industrial development.

This initiative also offers Bangladesh an opportunity to move beyond the limitations of both inefficient state management and poorly regulated privatisation. With transparent selection, professional management, enforceable commitments and continuous monitoring, the government can establish a balanced model that protects the public interest while harnessing private investment and expertise.

If pursued with consistency and accountability, the programme can create new industries, jobs and technological capabilities while strengthening national competitiveness. More importantly, it can demonstrate how decisive government leadership can transform the difficult lessons of the past into productive opportunities for the future.

Md Nazrul Islam is a former executive chairman of BEPZA, former executive member (Planning and Development) at BEZA, a retired Major General of the Bangladesh Army, and a PhD researcher on technology, workforce transformation, and industrial competitiveness.

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.