The government will frame another project in the Jute sector seeking fresh funds for the ailing industry after the lapse of the World Bank-funded Jute Sector Adjustment Credit (JSAC).

The JSAC. for which the Bank had sanctioned about 250 million US dollars, expired on June 30 after the government failed to fulfil some preconditions under the ambitious project.

A top official told UNB yesterday that a high-powered technical committee, headed by Joint Secretary at the Ministry of Jute Rezaur Rahman, had recently been formed to prepare the project papers.

"We are working on emergency basis, and hope to submit the project paper to the World Bank by October next.” said Mohammad Abdul Hannan. the Jute Secretary.

The committee members include representatives of the Bangladesh Jute Mills Corpo-

ration. Bangladesh Jute Mills Association and Bangladesh Jute Spinners' Association. The Director General of Jute is also a member

Hannan said the committee, which was asked to submit its report to the ministry as soon as possible, will hold its first meeting on Sunday.

The committee will prepare the papers for the new project and identify the reasons for the failure of the Jute Sector Adjustment Credit (JSAC) project, he said.

An evaluation of the project is also being carried out by the World Bank.

Of the 250 million US dollar sanctioned for the JSAC, the World Bank disbursed 50 million US dollar only under its first installment following some initial performances by the government.

It later declined to give the rest installments as the government failed to fulfil some preconditions.

The government signed the JSAC agreement with the multilateral donor agency in February 1994 to revamp the crippling jute sector by carrying out extensive reforms and freeing them from liabilities.

As per the preconditions, the government was to close down nine state-owned jute mills, privatise 18 others, downsize two large mills and rationalise the manpower In the jute mills.

The World Bank had assured that It would disburse another 50 million dollar in the second installment after the privatisation of the Hafiz Textile Mills, a jute unit run by BJMC. But the move failed during the tenure of the past government.

After assuming power in June last year, the present government tried to continue the project, which was due to expire in December, by offering to privatise the mill — a move that again went in vain.

The World Bank extended the project by six months till June this year, but has refused to do the same again.

As the last minute effort failed to produce any result, the government decided to seek funds from the Bank again the proposed to formulate a new aect to achieve the same

s.

Hannan said the Jute sector needs further reforms to regain its commercial viability and a new project may help revamp the industry

He said the causes of the JSAC failure would be analysed thoroughly during the process of project formulation

Balancing, modernisation, rehabilitation and ex|>ansion (BMRE) of the jute mills or setting up of the mills' own power generators would also be considered this time, the Jute secretary said