Biman’s dues to BPC mount

BPC unwilling to sell jet fuel to Biman on credit

Sohel Hossain Patwary

15 February, 2018 12:00 AM printer

Biman’s dues to BPC mount

Outstanding dues of Biman Bangladesh Airlines to Bangladesh Petroleum Corporation (BPC) have been piling up in the last seven years as the national flag carrier has failed to pay for fuel purchase.

Padma Oil Company Limited (POCL), a subsidiary of BPC, supplies aviation jet fuel to Biman on credit and the total outstanding dues have stood at around Tk 1,650 crore since 2011.

Due to the huge amount of dues, the petroleum corporation has sent letters to power, energy and mineral resources and civil aviation and tourism ministries, expressing their unwillingness to sell jet fuel to Biman Bangladesh Airlines on credit anymore.

According to the BPC information, the total arrears to Biman during the last seven years stood at Tk 1,145 crore while interests against the arrears reached Tk 504 crore since Biman failed to pay monthly bills on a regular basis from February 2011.

Since 2011, Biman only paid Tk 62 crore dues in 2015-16 fiscal to the BPC. In 2010-11 fiscal, they bought fuel worth Tk 354 crore and paid Tk 326 crore while Tk 27 crore remained as dues. Like this, they made dues of Tk 552 crore in 2011-12 fiscal, Tk 127 crore in 2012-13, Tk 415 crore in 2013-14, Tk 75 crore in 2015-16 fiscal and Tk 9 crore in 2016-17.

In a letter, BPC said that it supplies jet A-1 fuel worth Tk 50 crore to the national flag carrier every month on credit and the payment was supposed to be made at the end of month.

But, Biman always paid less and the dues are being piled up chronologically. If they want to settle the arrears, Biman will have to pay additional Tk 34 crore every month for the next five years alongside the regular monthly bill.

“We have been requesting the airlines to pay the dues for long. Even the POCL also wrote to the energy and mineral resources division and civil aviation tourism ministry to take necessary initiatives to realise the dues last year. But it did not work,” BPC said in a letter signed by its chairman Abu Hena Md Rahmatul Munim.

The letter also reads that although Biman is a state-owned company, BPC cannot take their dues responsibility. And it will not possible to supply jet fuel anymore if they continue like this. BPC also thinks that there is no point of paying their dues as Biman is now running smoothly.

When contacted, BPC chairman Hena Md Rahmatul Munim told the daily sun that both Biman and BPC are state-owned companies and they are desperately trying to settle the outstanding dues.

“Biman is not cordial in this regard and saying that they don’t have the capacity. We are trying to settle the issue through two ministries -- power, energy and mineral resources and civil aviation and tourism,” said the BPC chairman.

Mentioning the latest development, he said that a meeting was held recently and it was decided that Biman would not keep any dues and pay weekly. At the same time, they will try to pay dues.

Biman posted profit in the last three years.

The interesting thing is that Biman Bangladesh is not paying the dues against fuel but posted profit during the last three consecutive fiscal.

According to the Biman, the national flag carrier made gross profit of Tk 151 crore in fiscal 2016-17 and the net profit was Tk 47 crore after clearing taxes. The state-run carrier earned a profit of Tk 276 crore in fiscal 2015-16 (FY16) and Tk 324 crore in fiscal 2014-15 (FY15)

The BPC chairman said if Biman is making profit, then why they do not pay long pending dues.