Price gap delays buying of 6 ships from China

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Syful Islam The price difference is delaying procurement of six ships by the Bangladesh Shipping Corporation (BSC) from China, sources have said. Against this background the BSC has to extend the tenure of the memorandum of understanding (MoU) it signed with the China National Machinery Import and Export Corporation (CMC) last year, the sources have said. The BSC signed the MoU for procurement of three product carriers and three bulk carriers to bolster its fleet. "The difference in prices is very minimal. We need to raise the price slightly while the CMC also has to reduce theirs. But it's getting delayed due to various reasons," BSC Managing Director Moqsumul Quader told the FE. He said CMC officials visited the BSC recently and "requested us to sign the commercial contract immediately." "But we could not give them any specific date of signing the contract, as we did not get any green signal from the high-ups," he added. Mr Quader said the new price had to be approved by the cabinet committee on government purchase. But before that, the ministry of shipping (MoS) had to finalise it in negotiation with the CMC, he disclosed. He said: "I did not see any possibility of signing the commercial contract with the CMC very soon. So, the BSC is not getting any new vessels in near future." Sources said the CMC at the preliminary stage quoted the price of the six ships at Tk 14 billion. The price fixation committee of the MoS in negotiation with the Chinese company brought it down to nearly Tk 12 billion. "But the price is yet to be fixed." A senior MoS official told the FE that signing the commercial contract with the CMC might not take place during the tenure of the incumbent government as the high-ups got busy over the impending political turmoil. "Without any consent from the government high-ups, the ministry won't go ahead with minimising the price gap, as it involves millions of dollars. Because, questions may arise in future about over-pricing, since no international tender was floated for buying the ships. So, procurement of the ships is now hanging in the balance," he said. Another official said before signing the MoU with the CMC on the six ships, no other options, including consultation with other suppliers for procurement of such vessels at lower prices, were explored. "Had the BSC floated international tender, some other suppliers might have offered lower prices than the CMC's. That's why the parliamentary standing committee raised the questions about the procedure followed by the BSC in buying the ships," he said. 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. The average age of the ships is 28 years. BSC officials said the ships needed to be replaced in next two years. Established in 1972, the BSC is entrusted with the responsibility of carrying bulk cargoes, food grains and crude oil alongside other services like chartering, tramping, ship repair etc.