B\\\'desh set to buy 2 ships from Russian co on G-to-G basis

Bangladesh has taken a move to procure two vessels from Russia under Government-to-Government (G-to-G) arrangement to enrich the fleet of the state shipping corporation, sources said.

A similar move to buy six other vessels for Bangladesh Shipping Corporation (BSC) from China is now awaiting decision from top government functionaries, they added.

Both the Russian vessels are oil tankers, of which one will be used for lightering, while the other will be operated as a product carrier.

The vessels will be bought from Sovcomflot, the largest Russian state-owned shipping company.

A BSC delegation, led by its managing director Moqsumul Quader, will visit Moscow next month to have talks with the officials of Sovcomflot and inspect the vessels likely to be bought.

Mr Quader told the FE that buying vessels under state arrangement helps cut time.  Moreover, the vessels can be bought without floating tender, and through negotiations.

"Usually we do not receive good response when we float international tender for buying ships. So now we will be going for the G-to-G arrangement," he said.

Mr Quader said each vessel would be of 39,000 deadweight (DWT) capacity. The Sovcomflot has expressed its interest to sell its two vessels 17 to 18 years old. "We are going there to check and discuss if they can sell less old ships."

The life-span of a ship is 25 years, which can be used for 30 years or more, he added. The Sovcomflot has a rich fleet with 169 vessels.

Mr Quader said buying six ships for BSC from China has been taking time because of differences over prices with the seller. Given the situation, Bangladesh recently requested China to extend the tenure of its preferential and concessional loan until June this year. The differences over prices have been delaying the procurement.

The BSC and the China National Machinery Import and Export Corporation (CMC) have some differences over the prices of the vessels. As a result, the signing of a commercial contract with CMC is getting delayed.

With the assurance of getting Chinese government's concessional loan, Bangladesh opted for buying three product carriers and three bulk carriers to enrich the fleet of the BSC. In this regard, the BSC signed a memorandum of understanding (MoU) with the CMC on June 15, 2012.

But the two sides could not reach a consensus on the prices of the vessels within the MoU period. As a result, the two sides had to extend the tenure of the MoU in October last year.

Presently, the corporation has 13 ships in its fleet. Of them, one is a container ship, 10 are product carriers, and two are lighterage tankers. A BSC official said the average age of the ships is 28 years, and they need to be replaced very soon.

Established in 1972, the BSC is entrusted with the responsibility of carrying bulk cargo, food grain and crude oil, chartering, tramping and feeder services, unloading, and providing agency service and ship repairing.