Finance ministry's intervention sought

FE Team | Published: July 08, 2007 00:00:00 | Updated: February 01, 2018 00:00:00

M Azizur Rahman
The Ministry of Civil Aviation and Tourism has sought help from the Ministry of Finance to rid the national flag carrier - Biman Bangladesh Airlines - of its huge debt of over Tk 15 billion to the state-owned Bangladesh Petroleum Corporation (BPC).
The civil aviation ministry in a letter Wednesday last requested the finance ministry to relieve the Biman of its debt burden in line with the incumbent caretaker government's announcement to assume the BPC liabilities, a senior official of the finance ministry told the FE.
The Finance and Planning Adviser AB Mirza Azizul Islam in his June 7 budget speech said that the government is going to assume the BPC liabilities to the tune of Taka 72.53 billion in the current fiscal year.
Sources said Biman's total outstanding dues on account of jet fuel purchase from the BPC stood at Tk 15.68 billion until December 31, 2006.
Despite repeated warnings, including suspension of fuel supply to the Biman, the BPC could not realise its outstanding arrear bills, it was alleged.
Biman failed even to pay one-fourth of its monthly regular fuel oil bill to the BPC.
Failing to realise the outstanding bills the BPC had asked Biman several times to import fuel on its own for consumption to avoid accumulation of its debts.
The BPC has been incurring losses financially because of mismatch between import costs and sale prices of fuels, a senior BPC official said.
The BPC for the first time had stopped fuel supply to Biman's aircraft flying on its domestic routes in October 2005 due to repeated failure of the national flag carrier in paying the dues.
It subsequently issued a 72-hour ultimatum to the Biman authorities for clearing the dues.
But the BPC had to resume fuel oil supply to Biman following directives from the top government functionaries on condition that Biman would no more get fuel on credit.
Despite the undertaking the Biman never could make cash purchase of fuel.
The BPC suffered financial losses over Tk 27 billion in last fiscal year alone for selling petroleum products at prices below its costs of procurement.
The national flag carrier is set to corporatised and renamed as Bangladesh Biman Corporation.