The Cabinet approved in principle on Monday the formation of Bangladesh Investment Development Authority (BIDA) declaring Board of Investment (BoI) and Privatization Commission defunct.
The approval came from a regular Cabinet meeting at the Ssecretariat, with Prime Minister Sheikh Hasina in the chair.
The cabinet gave nod to the draft of Bangladesh Investment Development Authority Act -2015 to form the authority.
Cabinet Secretary M Musharraf Hossain Bhuiyan briefed reporters after the meeting at the Secretariat.
He said: "Privatisation Commission and Board of Investment will be abolished once the Bangladesh Investment Development Authority Act 2015 is passed by the parliament."
Bhuiyan said the two institutions failed to fulfill their objectives.
"The government hopes that country's investment will be accelerated through the formation of BIDA," he added.
He said once the proposed law comes into effect, BIDA will come into being and BoI and the Privatization Commission stand abolished.
According to the draft law, all the officials and employees working under BoI and Privatisation Commission would be absorbed with BIDA.
Besides, all the assets and liabilities of these two organizations would also be owned by BIDA.
On the structure of the new authority, the Cabinet Secretary said BIDA's the 17-member Governing Board would be headed by the Prime Minister with Finance Minister as its Vice Chairman. Ministers for Commerce, Industries, Energy, Power and Mineral Resources, Textiles and Jute and Planning will be the board members.
The BIDA Chief Executive Officer will be its Executive Chairman, who will also be a member of its Governing Board. Under the Executive Committee of the Authority, there will be maximum six members apart from the Executive Chairman to be appointed by the government.
Under the proposed law, BIDA will conduct registration of the industries to be set up in the private sector and the foreign trade liaison branch offices for making investment in the country.
However, investment proposals under BEPZA, BEZA, private EPZ, BSCIC, Hi Tech parks will remain outside BIDA's purview.
The Cabinet Secretary said BoI has been functioning under the Board of Investment Act, 1989 with 293 members of the staff. The Privatization Commission was formed earlier as a board in 1993 and later turned into a commission in 2000 through the Privatization Act, 2000. Currently the commission's manpower is 70.
Bhuiyan said since its inception, the performance of the Privatization Commission has not been up to the mark as some 58 non-profit state owned enterprises (SoEs) have so far been divested, while some 23 SoEs have offloaded their shares.
In the last four years, the commission could only privatise one SoE, while one SoE offloaded its shares.
Replying to a question, the Cabinet Secretary said BIDA would be an improved version of the BoI while the manpower to the new authority would be roughly 363.
The Cabinet also endorsed a proposal for transferring fund allocated by the government for meeting the salaries, allowances and other related expenditures of the officers and employees of the offices handed over to Upazila Parishad under the Upazila Parishad Act 1998.
The Cabinet Secretary said the initiative has been taken as part of the government's efforts to further ensure accountability of the offices as the government believes in people's empowerment.