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Public entities' DSLs keep on swelling, cross Tk 1.0t mark

Rezaul Karim | April 23, 2018 00:00:00

Debt service liabilities (DSLs) of state-owned entities, autonomous and semi-autonomous bodies soared to Tk 1.02 trillion at the end of the last fiscal year (FY) 2016-17, according to official statistics.

The amount of DSL comprises both principal and interest.

The aggregate amount of principal and interest overdue stood at over Tk 869.91 billion at the end of FY 2015-2016, the official data available with the ministry of finance showed.

Total outstanding amount, including both overdue and current amount, stood at Tk 2.13 trillion as of June 30, 2017. The figure was Tk 2.03 trillion at the end of June, 2016.

The debt-burden of these organisations includes the funds that the government borrowed for them from foreign development partners against projects and the local currency loans.

The state-owned enterprises (SoEs) and similar other organisations in violation of the loan agreements struck with the government have been defaulting on repayments, leading to swelling of their debt to the government, an official concerned said.

Some 116 SoEs took loans from the government in the last fiscal year (FY). The government provided some 12 new loans to the state-owned and similar other organisations during that FY. And fresh lending came as one of the major contributors to debt swelling.

The government provided some 947 loans -- 511 domestic and 436 foreign -- to the SoEs until June, 2017.

According to the latest figures, the total outstanding DSL of Bangladesh Power Development Board (BPDB) alone stood at Tk 950.91 billion as of the FY 2016-17.

In the BPDB's bag was Tk 907.79 billion as outstanding loan up to FY 2015-16. The cumulative interest on the total loan is compound in nature, thus snowballing every passing year.

Those familiar with the loan-disbursement process said government's expensive power purchase from quick-rental power plants is believed to be a major reason for such sharp rise in the borrowing by the BPDB.

It alone holds a major portion of the total debt and the total outstanding of BPC comes next with Tk 263.33 billion up to June 30, 2017.

But Petrobangla's total DSL increased to some extent in FY 2016-17 as it had not repaid a 'large' sum of the liabilities. Its outstanding was Tk 913.83 billion up to FY 2015-16.

The Rural Electrification Board (REB) held a total outstanding amount of Tk 86.12 billion during the same period.

Bangladesh Chemical Industries Corporation (BCIC) under the Ministry of Industries had a total DSL of Tk 100.22 billion at the same time.

Sources at Debt Service Liabilities wing of the finance division told the FE that it had taken many steps to realise growing outstanding loans but mostly to no avail. Rather dues are getting bloated.

They said they had met with the organisations individually for the loan recovery. "We want to streamline the official debt-repayment process as it puts the government in a difficult situation to manage its current expenditure," a senior official at the DSL wing told the FE.

A large amount of loans pending with the SoEs has been causing problems for the government to strike a balance between existing resources and current expenditures.

They said many new sectors in need of loans hardly get the same from the government since most SoEs are not making repayments as per the loan agreements.

The finance division has reckoned and readied the latest figures up to last June for disclosing during the presentation of the national budget by the finance minister in June next.

The government borrows from foreign development partners like the World Bank, the Asian Development Bank and the Islamic Development Bank.

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