BSC buying four ships at past govt-negotiated high price

Bangladesh Shipping Corporation (BSC) move now gets going, one year after the signing of deal with a Chinese company, to buy four ships with the go-ahead from the interim administration despite allegation of fixing high price by the previous regime.
The shipping ministry recently reappraised the project and sent to the ERD to forward to the Chinese government to make arrangement for signing loan agreement.
The BSC bids for the buy of two crude oil mother tankers and two mother bulk carriers under costly supplier's credit to be given by the Export-Import Bank of China, sources said.
As per the deal inked on October 14, 2023, the National Machinery Import and Export Corporation (CMC) will supply each oil tanker at US$73 million and each bulk carrier at $44 million.
However, shipping-sector officials, quoting last year's international market prices of ships with similar specifications, claim that each ship was overpriced by around $10 million then.
They allege that the members of the price-assessment committee have negotiated the higher prices being personally benefited which will cause a big loss for the state-run Shipping Corporation.
They have also raised question about BSC buying ships with supplier's credit at the time when the country's economy is under severe stress following depletion of foreign-exchange reserves.
They say the BSC itself has no required manpower to manage the existing vessels and those have been chartered out on a long-term basis
Moreover, BSC claims that they need ships to carry products for the Bangladesh Petroleum Corporation (BPC) and department of food but the reality is the BSC has no agreement with the two state-run entities.
Its existing fleet of vessels has not been used for carrying oil or food-grains for the BPC and the department of food. In the project proposal for the four new vessels, the BSC has said it will carry crude oil for the BPC by using two mother tankers.
On the other hand, the BPC in its purchase favours cost and freight (C&F) system which means the seller will pay the costs and freights necessary to carry goods to the delivery port and so it does not need to use BSC's ship to carry oil.
The stakeholders say like the previous vessels the BSC will also have to charter out the newly acquired vessels instead of carrying cargo for local use, so the venture will hardly bring any benefit to the country.
BSC managing director Commodore Mahmudul Malek also acknowledged that they would buy ships to charter out for "making profit". "Shipping is a most profitable business now. I need ship. We will charter them out. What else we can do with them instead chartering out," he told the FE recently.
The corporation bought six vessels from China few years back, one of which was destroyed by a missile attack in Red Sea in 2022. None of the five ships comes to Bangladesh and they have been put on chartering. "Whenever we get ships, we will put them on chartering. This is the business." Regarding a question on high price of vessels, he said, "The question you raised about pricing is a sensitive issue."
Mr Malek said the previous government had finalised the price. "Yes, I can say, when the price was negotiated, it seems to be was little bit high."

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