Despite having the flag vessel protection law at hand, the Bangladesh Shipping Corporation (BSC) has signally failed to earn a huge sum by carrying importables.
According to officials and stakeholders, poor planning, weak management and failure to procure required vessels have kept the BSC far away from being profit-making.
Currently, the state flag carrier has six vessels, collected from China in 2018 and 2019, with the funding from Chinese Exim Bank.
Two other vessels, collected from Denmark in 1987, are also in the fleet but those are not permitted to ply international routes being single-hull ships.
To facilitate shipping, the government in September 2019 allowed local vessels to carry 50-per cent Bangladeshi cargoes, from the earlier 40 per cent, under the Bangladesh Flag Vessel (Protection) Act-2019.
The BSC is also entitled to carry all import cargoes of government entities, which is considered as a major advantage for the corporation.
The corporation is, however, carrying almost no state cargoes in the absence of required vessels.
Interestingly, the BSC did not engage its newly bought six vessels-three oil tankers and three bulk carriers-to carry import items of state-owned entities.
Rather, it only charters vessels for state entities and gets commission at a rate of 2.5 per cent, the only advantage it could avail being a national flag carrier.
The new oil tankers were given for long-term charter, while the new product carriers are run by the BSC management.
Sometimes, the bulk carriers are also given for short-term charter.
The BSC took some 31 years to buy these new vessels.
The corporation collected some Tk 3.13 billion thorough repeat public offerings (RPO) from the stock market back in 2012 to collect ships.
However, only Tk 161.50 million was spent on collecting vessels, Tk 179.30 million on share selling-related work and Tk 593.50 million on construction of a 25-storey building in Dhaka.
In July 2017, the BSC and the Ceylon Shipping Corporation signed a memorandum of understanding to launch a joint-venture container feeder service between the two countries.
Nearly four years have elapsed, but the initiative is yet to see any major progress.
Before buying six ships, BSC officials were upbeat about opening offices abroad, especially in Singapore, to manage the operational work of the vessels.
Instead of doing so, the vessels are now given for long-term and short-term charter and some are sometimes operated by own officials.
The corporation is now working to procure six more vessels-two crude oil carriers, two product oil carriers and two bulk carriers.
The BSC is also looking for 'suitable' funds to buy four container vessels.
A preliminary move to buy six LNG (liquefied natural gas) carriers has also been made.
When asked, Chattogram Chambers of Commerce and Industry president Mahbubul Alam said the BSC has ample scope to contribute to boosting the national economy.
"They are enjoying advantage under the flag vessels act. Thus they should put attention to shipping business," he told the FE.
Citing an example, Mr Alam said Emirates Airlines, despite being a state entity, is ruling the global aviation business.
It has a large contribution to the economy of the United Arab Emirates, he added.
The BSC also has the similar scope to do such business and contribute to the economy through availing the advantages the government has offered to it.
Mr Alam, also chairman of Chattogram Port Users Forum, said every year millions of tonnes of goods are imported and exported to and from Bangladesh.
Foreign ships are taking away billions of dollars by carrying these goods where the BSC can have a significant share being a national carrier.
He thinks there should be private-sector representation on the BSC board of directors alongside government officials who can give them business orientation and take forward the corporation.
Keeping money in banks by collecting from share market instead of buying vessels to expand business is illogical, Mr Alam observed.
BSC managing director Cdre Suman Mahmud Sabbir told the FE that the corporation is trying to collect a number of vessels to expand its business.
"We could have spent all the money at once while buying six vessels. We didn't do that. We'll use the rest of the money for buying vessels in future."
Asked why vessel procurement is delayed when the BSC has ample scope to do business, Mr Sabbir said materialising a procurement project takes huge time.
About spending on construction instead of buying more vessels, he said, "We've construct this commercial building to earn significantly by renting floor space."
On its failure to expand business, he said the BSC only charters vessels for Bangladesh Petroleum Corporation, Bangladesh Chemical Industries Corporation and Bangladesh Agricultural Development Corporation.
"Chartering is not our main source of income. Our main income comes from vessel rent," Mr Sabbir cited.
He said work is ongoing to launch a direct feeder service on Chittagong-Colombo route.
"…Maybe the plan will be materialised. We also have plans to buy container vessels. Once we get the vessels, we can start the service."
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