Extension of Chinese loan period for buying 6 vessels for BSC sought

Bangladesh will soon request China to extend the tenure of its preferential and concessional loan to buy six vessels for the Bangladesh Shipping Corporation (BSC) until June this year as difference over their price is delaying the procurement, sources said.
The Ministry of Shipping (MoS) last week in a letter requested the Economic Relations Division (ERD) to take necessary steps so that the Chinese government extends the loan period.
Officials said the BSC and the China National Machinery Import and Export Corporation (CMC) have still some differences over the price of the vessels. As a result, signing of commercial contract with the CMC is getting delayed.
With the assurance of getting Chinese government's concessional loan, Bangladesh opted for buying three product and three bulk carriers to enrich the fleet of the BSC. In this regard, the BSC signed a memorandum of understanding (MoU) with the CMC on June 15, 2012.
But the two sides could not reach a consensus over the price 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.
However, managing director of the BSC Moqsumul Quader told the FE earlier that the difference over price of six vessels was very minimal.
"We need to raise the proposed price slightly up while the CMC also has to reduce the same. But it's getting delayed due to many other reasons," he said.
The CMC officials visited the BSC in October last year and requested for signing the commercial contract as soon as possible. But the BSC officials could not give them any specific date for signing the contract.
Mr Quader said the price has to be approved by the cabinet committee on government purchase. But, before that the MoS has to finalise it after negotiating with the CMC.
Sources said the CMC at a preliminary stage offered price of Tk 14 billion for the six vessels. A price fixation committee of the MoS after negotiation with the Chinese company brought it down to nearly Tk 12 billion. But the two sides could not reach a consensus until now.
A senior MoS official told the FE that signing of the commercial contract with the CMC may not take place until a new government takes office.
"Without consent from the government high-ups, the ministry won't go forward to minimise the price gap with the CMC as it involves millions of dollars. Questions also may arise in the future on their higher price since no international tender was floated for buying the ships," he said.
Presently, the Corporation has 13 ships in its fleet. Of them, one is container ship, 10 product carriers and two lighterage tankers. A BSC official said the average age of the ships is 28 years. These need to be replaced very soon.
Established in 1972, the BSC is entrusted with the task of carrying bulk cargo, food grain and crude oil, chartering, tramping and feeder services, unloading and providing agency service and ship repairing.