Govt to abolish PSI system by Dec 2009: Mirza Aziz
FE Report | Friday, 29 August 2008
The government has set end of 2009 as the latest deadline to abolish pre-shipment inspection (PSI) system as it is building its own capacity to inspect the country's soaring imports, finance adviser said Thursday.
Mirza Azizul Islam said: "Within the next 16 months till December 2009, the government would develop its own capacity," to replace the PSI system being run by companies, which last year assessed goods worth around US$ 20 billions.
"We are still not well-equipped to do what the PSI companies are doing at the moment," Aziz said after a meeting of the government's purchase committee, the highest body for public purchase.
The new deadline was announced after the caretaker government selected four companies including a new Japanese firm, to inspect and verify goods imported by the private traders.
The four selected PSI companies are: SGS (Bangladesh) Limited, Bureau Veritas BIVAC (Bangladesh) Limited, Intertek Testing (ITS) Limited and a new Japan-based company Omic.
Their tenure will be over at the end of 2009 after which the customs department of the National Board of Revenue (NBR) will conduct the assessment and valuation with its own equipment and officials.
The appointment of the four companies came just days before the contract of the existing ones were set to expire on August 31.
The NBR had appointed four PSI companies-- SGS (Bangladesh) Limited, Bureau Veritas BIVAC (Bangladesh) Limited, and Intertek Testing (ITS) Limited and M/S Cotecna Inspection SA for a three-year tenure in September 2005.
The then Finance Minister M Saifur Rahman had told reporters that after August 2008, the PSI system would be abolished, "as it does not look good that a sovereign nation is hiring some private companies to do a very important job."
The extension came despite widespread allegations that the PSI companies have been involved in under-valuing goods, mis-declaration, or allowing entry of sub-standard and adulterated products in the country.
Trade experts and businessmen have accused the companies of minting money in collusion with rogue traders and depriving the government billions of taka in lost revenues.
In March this year, the government scrapped the deal of one of the PSI companies in the country- M/S Cotecna Inspection of Switzerland-after a NBR probe has found it involved in under-valuing products.
The finance adviser said the government would not hesitate to go tough against the corrupt PSI firms.
"The government will take tough action against the company if any specific irregularities are found," he said.
"You have already seen that we have scrapped a deal with a PSI company for irregularities in the inspection activities."
Aziz said the government would pay Tk3.75 billion to the four PSI companies for doing the inspection.
The country launched voluntary PSI system in 1992 and made it mandatory in 2000.
The private PSI companies started operation after accusation that the country's customs officials were not up to the task and involved in corruption that caused huge revenue loss.
Initially, three PSI companies were appointed for a five year tenure.
Mirza Azizul Islam said: "Within the next 16 months till December 2009, the government would develop its own capacity," to replace the PSI system being run by companies, which last year assessed goods worth around US$ 20 billions.
"We are still not well-equipped to do what the PSI companies are doing at the moment," Aziz said after a meeting of the government's purchase committee, the highest body for public purchase.
The new deadline was announced after the caretaker government selected four companies including a new Japanese firm, to inspect and verify goods imported by the private traders.
The four selected PSI companies are: SGS (Bangladesh) Limited, Bureau Veritas BIVAC (Bangladesh) Limited, Intertek Testing (ITS) Limited and a new Japan-based company Omic.
Their tenure will be over at the end of 2009 after which the customs department of the National Board of Revenue (NBR) will conduct the assessment and valuation with its own equipment and officials.
The appointment of the four companies came just days before the contract of the existing ones were set to expire on August 31.
The NBR had appointed four PSI companies-- SGS (Bangladesh) Limited, Bureau Veritas BIVAC (Bangladesh) Limited, and Intertek Testing (ITS) Limited and M/S Cotecna Inspection SA for a three-year tenure in September 2005.
The then Finance Minister M Saifur Rahman had told reporters that after August 2008, the PSI system would be abolished, "as it does not look good that a sovereign nation is hiring some private companies to do a very important job."
The extension came despite widespread allegations that the PSI companies have been involved in under-valuing goods, mis-declaration, or allowing entry of sub-standard and adulterated products in the country.
Trade experts and businessmen have accused the companies of minting money in collusion with rogue traders and depriving the government billions of taka in lost revenues.
In March this year, the government scrapped the deal of one of the PSI companies in the country- M/S Cotecna Inspection of Switzerland-after a NBR probe has found it involved in under-valuing products.
The finance adviser said the government would not hesitate to go tough against the corrupt PSI firms.
"The government will take tough action against the company if any specific irregularities are found," he said.
"You have already seen that we have scrapped a deal with a PSI company for irregularities in the inspection activities."
Aziz said the government would pay Tk3.75 billion to the four PSI companies for doing the inspection.
The country launched voluntary PSI system in 1992 and made it mandatory in 2000.
The private PSI companies started operation after accusation that the country's customs officials were not up to the task and involved in corruption that caused huge revenue loss.
Initially, three PSI companies were appointed for a five year tenure.