Bangladesh plans to sell 49 state-owned companies in the next 12 months to save itself millions of dollars in subsidies.

"Ultimately we would like to privatise almost all public enterprises ... to make the private sector vibrant and productive and the main vehicle for economic development," Enam Ahmed Chowdhury, chairman of the Privatisation Commission told the BBC's World Business Report.

If someone pays in foreign currency they will be given a 40% discount

Enam Ahmed Chowdhury Privatisation Commission

As a result of the sell-off, Mr Chowdhury estimates about 26,000 workers would lose their jobs.

Bangladesh, which is heavily dependent on foreign aid and imports, has been under pressure from foreign donors to speed up privatisations.

The IMF and other lenders provide nearly $1.5bn in annual aid.

The South Asian country spends more than $500m, or over 6.5% of its annual budget, funding around 200 public sector companies.

Compensation for workers

The government expects to raise about 5bn taka ($86.3m) from the sales, Mr Chowdhury said adding a 4bn taka compensation fund had been set up for the employees made redundant.

But the full amount may not be raised as bidders who pay the full sale cost upfront will be offered discounts of up to 40%.

"Foreign investors are most welcome to invest here and in order to quicken the process of transfer of ownership a rebate of 35% has been provided of the total sales price, and if someone pays in foreign currency they will be given a 40% discount," he said.

Mr Chowdhury claimed about 200 state-owned companies had been pushed into the red by mismanagement and labour disputes.

In the financial year ending June 2001, the companies reported losses of over 33bn taka ($570m), according to government figures.

Bidding for companies in the oil, textile, jute, chemical, steel, food and timber sectors is due to start in July.

New powers?

The privatisation commission has sold-off only 41 companies since it was set up in 1993.

Mr Chowdhury said the commission now had new powers to sign contracts and transfer ownership.

"This will end hassles the buyers often encountered with the management of the disinvested companies and their employees," he said.