The Planning Commission (PC) sent back a development project proposal (DPP) of Bangladesh Shipping Corporation (BSC) on procurement of six vessels citing the corporation's inability to repay the loan it moved to take from the Chinese Exim Bank for the purchase, sources said.
"It seems that the BSC would not be able to repay the loan from its own income after meeting operating expenses," the PC said after examining the DPP.
It said the proposal had no projection of 'strong business case'. "There is no projection in the DPP that the BSC will be able to recover the market it lost in the last two decades after buying the vessels."
The PC said in last two decades the BSC could not add any vessel to its fleet despite running commercial activities. The number of vessels in its fleet has now come down to eight from 26.
"That means, they (BSC officials) failed to prove the corporation a commercially viable organisation," it added.
The DPP of the BSC even did not include any document relating to the approval of Cabinet Committee on Economic Affairs (CCEA) relating to the proposed purchase, the PC note added.
The PC asked the BSC authority to resubmit the DPP again incorporating all the things it pointed out to get the DPP processed for vessel procurement.
When contacted, BSC managing director Moqsumul Quader told the FE that the corporation failed to procure any vessel in the last two decades despite several attempts.
He said different barriers were created every time the BSC moved to buy ships.
"The corporation failed to prove its commercial viability with a very small number of vessels. And, you can't be viable with 30 years old vessels," Mr Quader said.
Differing with the PC's observation the BSC chief said study relating to commercial viability of the corporation was carried out. "The Chinese Exim Bank agreed to fund the purchase only after getting the report that BSC would be able to repay the loan."
He claimed that the CCEA approval was not necessary since the procurement would be made on the government to government basis.
The BSC signed a US$ 184.50 million commercial deal with CMC (China National Machinery Import and Export Corporation) on April 30 last to procure six vessels under a soft loan from the Chinese Exim Bank.
The CCEA did not approve the commercial deal, since it was done without consent from the Economic Relations Division (ERD), the National Board of Revenue (NBR) and the Ministry of Law.
In such a situation the government has sought more time to sign a financial agreement with the Chinese Exim Bank. The ERD sent a letter to the Exim Bank requesting it to extend the deadline until December 31 next, which was due in November.
Established in 1972, the BSC is entrusted with the responsibility of carrying bulk cargoes, food grain and crude oil, apart from chartering, tramping and feeder services etc.
© 2024 - All Rights with The Financial Express
