Target of realising SoEs' debts turns elusive

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S M Jahangir
The renewed government move to streamline debt servicing by state-owned enterprises and autonomous bodies appears to have hit snags due mainly to poor response from most of the defaulters concerned, official sources said.
Citing the figures compiled by the Finance Division's Debt Service Liability (DSL) wing, outstanding debt of 56 government, semi-government and local government bodies has already reached nearly Tk 544.68 billion.
"Non-payment of such a huge amount of arrear official debts, especially by big defaulters, has put the government's current expenditures under pressure," said a senior finance ministry official.
Taking their poor payment performance into account, the authorities have already reminded the agencies concerned to service their outstanding debts accordingly to help the government beef up its resource mobilisation, he mentioned.
Earlier, the debt service wing sat with all the big defaulters both individually or separately in this connection, the official added.
"Although we have asked the respective agencies to clear their outstanding debt by streamlining it, their response turned out to be very poor," the official said.
Of the total debt in arrears, some state organisations paid just around Tk 12 billion in the fiscal year 2008-09, officials said.
According to them, the DSL has set a target of realising debt amounting to at least Tk 15 billion for the current fiscal.
Taking the payment performance into account, they said there is little possibility of reaching the current fiscal's debt recovery target.
Officials, however, attributed such non-payment of outstanding debt by many of the SOEs to their poor financial conditions.
"Most of the loss-making SOEs are not in a position to service their respective debt," said an official.
Referring to the figures compiled by the finance division's DSL wing, officials said Bangladesh Power Development Board (BPDB) topped the list of debt defaulters at the end of last fiscal (FY 2008-09), followed by Petrobangla and Bangladesh Chemical Industries Corporation (BCIC).
The outstanding debt liability of BPDB has already reached Tk 295.18 billion while that of the Petrobangla and BCIC hit Tk 76.38 billion and Tk 57.77 billion respectively as on June 30, 2009, the official figures showed.
Among other DSL defaulters, Rural Electrification Board (REB) is liable to pay Tk 13.18 billion, Bangladesh Steel and Engineering Corporation Tk 14.50 billion, Dhaka WASA Tk 10.59 billion and the Bangladesh Inland Water Transport Authority (BIWTA) Tk 11.70 billion.
The figures also revealed that the agencies concerned paid around Tk 73.28 billion until June last, which was nearly 13 per cent of their outstanding debts.