Substantial taka depreciation having eaten into their allocated funds in a couple of years, state-owned enterprises continue feeling the pinch and keep seeking recompense against cost overruns of projects.
Dhaka Water Supply and Sewerage Authority (DWASA) and Payra Port Authority are among the SoEs having appealed for bail-in to get rid of the financial losses stemming from devaluation of the local currency against the US dollar, finance officials have said.
The Local Government Division in a recent letter to the Finance Division advocated that the DWASA could be given waiver from Tk 16.65-billion losses incurred during the last two fiscal years from currency devaluation.
On its part, DWASA took foreign-currency loans worth 229.66 million Euros and 782 million USD for six projects. In the fiscal year 2021-22 the utility agency incurred Tk 6.82 billion and in fiscal year 2022-23 Tk 9.82 billion losses as the taka shed value in exchange with foreign currencies.
"It is almost impossible for DWSA to maintain the loss incurred from depreciation of taka alongside maintaining day-to-day expenditures and debt-service liability to the government and ensuring uninterrupted water supply to the consumers," DWASA managing director Taqsem A Khan wrote in a letter to the Local Government Division.
He sought exemption from the liability created due to the take devaluation which will lessen DWASA's expenditure for interest payment and get rid of liquidity shortages.
Sources said the Payra Port Authority recently also contacted the finance ministry as its project on capital and maintenance dredging of Rabnabad channel faced a similar gap due to devaluation of the taka against the Euro.
The dredging scheme of the channel was given 524 million Euros from Bangladesh Infrastructure Development Fund (BIDF), which was created diverting $2 billion from the country's foreign-exchange reserves back in 2021.
The port authority has found that due to exchange-rate hike of the Euro against the taka it needs an additional Tk 1.13 billion to pay value-added tax and other taxes against the payment to be made to foreign contractor Jan De Nul.
Contacted by the port authority, the finance-division officials informed that" there is no scope to allocate any additional fund from the BIDF for payment of VAT and taxes.
The port authority thus decided to make the payment of VAT and taxes through adjustment of funds from other expenditures of the dredging scheme", sources said.
Planning Commission officials say many ongoing projects came in for revisions in the recent months due to devaluation BDT against the dollar and other foreign currencies.
A senior Planning Commission officer says, "Many of these projects were taken when the exchange rate of Taka against dollar was around Tk 84 to Tk 85. Now dollar price shot up over Tk 110, which has created a big gap in project costs."
Contacted, a Finance Division official told the FE that there is hardly any chance to provide additional funds to meet the gap created due to depreciation of BDT against the foreign currencies.
"The project-executing agencies will have to adjust the additional costs by saving from other expenditures segments of the projects or from their own exchequer," he said.
syful-islam@outlook.com