Govt gives Tk 11.94b equity support to bail out Biman
Sunday, 4 May 2008
S M Jahangir
The finance ministry has provided Tk 11.94 billion as 'equity' fund for bailing out the cash-strapped Biman Bangladesh Airlines from paying its arrear fuel bills to the Bangladesh Petroleum Corporation (BPC), officials said.
"The major disputes regarding the payment of outstanding dues between the two state-run agencies is over as the finance ministry has settled the said amount of fund to the BPC on behalf of the national flag carrier - BBA," a senior Energy Division official told the FE.
The official said the bailout fund will be adjusted with the BPC's outstanding duties owed to the National Board of Revenue (NBR).
"The finance ministry's bailout fund will eventually go to the NBR on account of BPC's arrear fuel import duties," the official added.
Energy Division officials said a high-profile committee has resolved the tripartite payment disputes after holding a series of meeting with the relevant agencies.
Although the BPC had claimed for an additional Tk 6.0 to Tk 7.0 billion from Biman in the form of interest, no decision was taken in this regard, they mentioned.
A few months ago the government formed a committee, headed by a joint secretary of finance ministry, to facilitate the settlement process of the Biman's arrears fuel bills with BPC.
At its meeting with the concerned agencies, the committee asked the BPC to settle their disputes over the payable duty on import of petroleum products for facilitating adjustment of the latter's arrear fuel-oil bills with Biman.
Initially, the NBR claimed that the BPC owed nearly Tk 22 billion as import duties to the customs department while the Corporation claimed for entitlement to get duty rebate of over Tk 5.0 billion from it.
Without resolving such disputes, the committee found itself in a difficult situation to adjust the Biman's arrear fuel bills with NBR in favour of the PBC, said an official.
Official sources said earlier that the Biman owed more than Tk 17 billion to the BPC - the state-run petroleum marketing entity - on account of purchasing fuel on deferred payment.
They also said the interim government took up the initiative to settle the arrears bills in order to help the resource-crunch BPC get rid of its huge bank liabilities.
Several months ago, the government converted the Biman into a public limited company as 'The Biman Bangladesh Airlines Limited (BBAL)' to make the national airline operationally sound and commercially viable without settling down its huge liabilities.
The Biman could not pay its dues to the BPC mainly because of its financial problems, caused due to its huge operating losses. Official figures showed that the national carrier had incurred a loss to the tune of Tk 12 billion in fiscal year (2006-07) alone.
The finance ministry has provided Tk 11.94 billion as 'equity' fund for bailing out the cash-strapped Biman Bangladesh Airlines from paying its arrear fuel bills to the Bangladesh Petroleum Corporation (BPC), officials said.
"The major disputes regarding the payment of outstanding dues between the two state-run agencies is over as the finance ministry has settled the said amount of fund to the BPC on behalf of the national flag carrier - BBA," a senior Energy Division official told the FE.
The official said the bailout fund will be adjusted with the BPC's outstanding duties owed to the National Board of Revenue (NBR).
"The finance ministry's bailout fund will eventually go to the NBR on account of BPC's arrear fuel import duties," the official added.
Energy Division officials said a high-profile committee has resolved the tripartite payment disputes after holding a series of meeting with the relevant agencies.
Although the BPC had claimed for an additional Tk 6.0 to Tk 7.0 billion from Biman in the form of interest, no decision was taken in this regard, they mentioned.
A few months ago the government formed a committee, headed by a joint secretary of finance ministry, to facilitate the settlement process of the Biman's arrears fuel bills with BPC.
At its meeting with the concerned agencies, the committee asked the BPC to settle their disputes over the payable duty on import of petroleum products for facilitating adjustment of the latter's arrear fuel-oil bills with Biman.
Initially, the NBR claimed that the BPC owed nearly Tk 22 billion as import duties to the customs department while the Corporation claimed for entitlement to get duty rebate of over Tk 5.0 billion from it.
Without resolving such disputes, the committee found itself in a difficult situation to adjust the Biman's arrear fuel bills with NBR in favour of the PBC, said an official.
Official sources said earlier that the Biman owed more than Tk 17 billion to the BPC - the state-run petroleum marketing entity - on account of purchasing fuel on deferred payment.
They also said the interim government took up the initiative to settle the arrears bills in order to help the resource-crunch BPC get rid of its huge bank liabilities.
Several months ago, the government converted the Biman into a public limited company as 'The Biman Bangladesh Airlines Limited (BBAL)' to make the national airline operationally sound and commercially viable without settling down its huge liabilities.
The Biman could not pay its dues to the BPC mainly because of its financial problems, caused due to its huge operating losses. Official figures showed that the national carrier had incurred a loss to the tune of Tk 12 billion in fiscal year (2006-07) alone.