Biman and BRTC: Victims of same maladies

Most of the state-owned enterprises (SoEs) have become losing concerns mainly due to politicisation and corruption. The administrative interference in running their businesses is also responsible for the losses in the SoEs. Biman Bangladesh and Bangladesh Road Transport Corporation (BRTC) are no exception.       
Corruption is galore in the national airlines Biman Bangladesh where the prevailing diarchy forced its foreign CEO to quit. The resignation of second foreign CEO and managing director within a year has also sent a bad signal for the airlines. The first foreign Managing Director Kevin Steele took some hard decisions during his tenure that raised hope for the sinking airlines. His successor Kyle Haywood had put the grounded airlines on the track. There were reports of the airlines making profit. Amidst this good news Haywood's resignation came as a shock.  
The civil aviation minister said that the MD remained absent from his duty most of the time. The minister did not mention clearly what made the CEO irregular in his duties. There is an allegation that the efficient people are not allowed to work independently in the airlines due to interference by the chairman and other high officials. The airlines incurred a loss of Tk 2.0 billion in the last fiscal and its accumulated loss during the last five years is estimated at Tk 14 billion.
Biman had a fleet of 10 aircrafts covering 29 international destinations. Two more aircrafts of the new generation Boeing 737-800 - 'Meghdoot' and 'Moyurpankhi' were added to the fleet on January 12, 2016. With the induction of the two new aircrafts, the number of Biman's Boeing aircrafts now rose to six. The new aircrafts are installed with most modern in-flight entertainment system from Rockwell-Collins. But the fact is that except the Middle Eastern routes, all other destinations of Biman are losing concerns. Sources in Biman say that dual administration or diarchy is responsible for mismanagement and corruption in the national airlines. The all powerful chairman of the board of directors interferes in every administrative decision. The ministry is also not allowed to function independently although the executive authority rests with the civil aviation ministry.
Bangladesh is a land of good business for the airlines. The foreign airlines are making good profit carrying Bangladeshis. Presently 9.5 million Bangladeshis live all over the world. Emirates and Saudia operate three flights each daily. Etihad, Kuwait Airways, Singapore Airlines and Malaysian airlines are profitable in Dhaka routes. Malaysian Airlines operates two flights every day. But Biman is a loser in these routes.
Biman mostly fails to maintain its flight schedule. Consequently,  Bangladeshis hardly fly the national flag carrier. Though Biman is responsible for handling baggage, its ground service is awful. Passengers suffer most on arrival at the Shahjalal International Airport (SIA) because they are to wait for hours to collect their baggage. Meanwhile, different countries including Australia and Britain raised the issue of security lapse at the SIA. Australia already stopped carrying cargo from Dhaka to Australia.
No one disagrees with the fact that Biman has the potential to operate profitably. The management could expand the fleet and increase the international destinations. The management must be improved and corruption must end. The diarchy in management should go.
On the other side, the BRTC incurs huge losses every year and it carries only one per cent of the commuters out of three million every day in the capital Dhaka. One fourth of the BRTC buses, mostly double-deckers, are providing services to the office- and school-goers. These buses remain idle after carrying the passengers to the offices, universities and schools.
City planners are of the opinion that these buses could ease the transport problem in the city if these were put on service from 11 am to 3 pm. It is not clear why some hundred buses remain idle for the whole day when the commuters struggle for getting transport to go to their destinations. The government has invested a huge amount of money in procuring buses and trucks for BRTC. But most of these buses remain dumped in the garage, being out of order, in the absence of necessary repairs and maintenances.      
Meanwhile, BRTC is processing a proposal to buy 500 buses and 600 trucks from India. The move is part of the corporation's business plan to make it commercially viable. The new buses and trucks are likely to be procured under Indian line of credit which is a tied one. It is feared that the price of procurement under Indian credit line might not be competitive as Bangladesh has no option but to buy from India.
BRTC insiders say the corporation's loss will multiply if its fleet is increased without strengthening operational efficiency. There is an allegation that the BRTC has been incurring losses every year due to corrupt practices. Presently, BRTC is losing on an average Tk 800 million annually. The accumulated loss during the last five years is estimated at Tk 3.80 billion.
Transport business in the private sector is a very lucrative one. The private operators are expanding their fleet every year because road transport is becoming attractive to the commuters. The BRTC will be able to make profit if the organisation is commercially run. The corporation should be given autonomy and there should not be official interference in fleet planning, route selection and staff recruitment.
It is well-known that the government cannot do business. The corporation has dumped 500 vehicles that were procured at huge cost. BRTC has 1532 vehicles - including both buses and trucks. Out of the1532, only 1066 vehicles are in operation.
The vehicles now in operation are not all in good condition. But the corporation has no plan to repair those vehicles. Instead, it is hurrying to buy new buses and trucks. The communications ministry should pass on the administration and management to commercially efficient people. The corporation should be given profit target and in case of failure the drivers and conductors of vehicles should be held responsible. Otherwise, BRTC will continue to accumulate losses and commuters will not get any relief.
  The writer is a retired Professor of Economics, BCS General Education Cadre.
    [email protected]