China has requested Bangladesh to reconsider its decision on putting off the jute sector modernisation project, which was supposed to be implemented with Chinese funds.
But the government has shut down the state owned jute mills, after ensuring Chinese fund for modernising the jute sector after a long negotiation between the two governments.
China has shown its interest to continue the project.
"The interest was expressed in a recent meeting between the Chinese side and the government, but they were told that the project might be scrapped as the jute mills were closed," an official concerned told the FE.
The government has undertaken a Balancing, Modernisation, Rehabilitations & Expansion of the Public Sector Jute Mills" project to modernize 24 decades-old state-owned jute mills for producing diversified jute goods.
China has agreed to provide US$280 million for the project after long negotiations this year.
The Jute Ministry officials had earlier said if the project was implemented, the Bangladesh Jute Mills Corporation (BJMC) would be able to produce 275,500 tonnes high quality traditional and multipurpose jute goods annually.
In a recent meeting, China informed Bangladesh they want to continue the project and requested the government to select a Chinese company for implementing the project.
But the government informed China that there was a change in the government policy and the jute mills were shut.
Since the mills were closed, the project is likely to be scrapped, Bangladesh officials told China in a recent meeting where the Chinese-funded projects were reviewed.
Bangladesh side, however, suggested China might get the opportunity to invest in jute mills as these factories could be reopened under private arrangement, sources said.
They were told that the jute ministry would inform them about the fate of the project, an official said.
The project aims to produce jute-based products like dash boards, doors, windows and seats of the expensive vehicles, which are now in high demand for car manufacturers.
To this effect, China Textile Industrial Corporation for Foreign Economic and Technical Cooperation and the BJMC signed an agreement in 2016.
The modernisation project was included in the list of 26 projects scheduled to be funded under the Chinese Belt and Road Initiative.
In July this year, the government decided to shut down the 25 state-run jute mills under Bangladesh Jute Mill Corporation (BJMC), which employed 25,000 workers of the mills.
The decision was taken due to heavy losses incurred by these state- owned jute mills over the years owing to poor management and massive corruption.
