BSC may have to pay 10pc more for buying 6 vessels

The cost of buying six new vessels for Bangladesh Shipping Corporation (BSC) is likely to go up by 10 per cent as price of those have gone up globally, officials said.
"Officials of the vessel supplying company met us this week and informed that it will raise the price by 10 per cent from its previous negotiation level, since demand and price of the ships have gone up," a senior shipping ministry official told the FE.
The China National Machinery Import and Export Corporation (CMC) and the BSC are negotiating on supplying three product carriers and three bulk carriers to enrich the fleet of the state-run shipping service provider.
Quoting the Chinese officials, the ministry official said the world economy had been passing through a sluggish time when the two sides started negotiation on price fixation of the vessels. In the meantime, the global economy has started moving upward, and thus the demand for vessels has also increased raising their prices.
"We won't be able to supply the vessels in accordance with our last proposal without further studying the global prices," the CMC officials were quoted as saying.
The CMC has reportedly sought US$ 195 million as final price for the six vessels, while the Bangladesh side earlier agreed to pay $185 million. The two sides could not reach a consensus over the price which delayed the signing of commercial contract.
Later, Bangladesh requested China to extend the tenure of its preferential and concessional loan by six months until June this year.
Meanwhile, the anti-corruption commission (ACC) has started investigating the alleged corruption in price negotiation for the vessels' procurement. A mariner has submitted a complaint with the ACC that the BSC offered a high price to CMC for the six vessels.
"Yes, we have been summoned by the ACC on this issue. We have submitted necessary information and documents to them," managing director of BSC Moqsumul Quader told the FE.
"The mariner wanted to supply an oil tanker to the BSC on PPP (public private partnership) basis. But we went for government-to-government basis upon being instructed by the Prime Minister's Office. That's why he lodged a complaint with the ACC failing to supply the vessel," Mr Quader said.
Earlier, a price negotiation committee suggested starting negotiation with the CMC setting a threshold price for each product-carrier at $29 million and bulk-carrier at $23 million totalling $156 million for all the six vessels.
Starting with $156 million, another negotiation committee agreed to $185 million as price for the six vessels, but could not reach consensus with CMC.
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 BSC. In this regard BSC signed a memorandum of understanding (MoU) with CMC on June 15, 2012.
But the two sides could not reach a consensus over 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 grains and crude oil, chartering, tramping and feeder services, unloading and providing agency service and ship repairing.