Biman demands loan waiver, blames BPC and CAAB over massive debt
BPC says Biman’s explanation is untrue; CAAB denies airline’s demand of Tk3,449.14 crore waiver
File photo of the Biman's first Dreamliner Akash Beena Courtesy
Mamun Abdullah
November 4, 2022 2:38 AM
The national carrier Biman Bangladesh Airlines has demanded a loan waiver from the Bangladesh Petroleum Corporation (BPC) and Civil Aviation Authority of Bangladesh (CAAB).
According to Biman, an unreasonable surcharge of 6% from CAAB and high jet fuel prices charged by the BPC compared to the international market are responsible for the airline's massive debt.
Deputy Secretary Mohammad Abdul Awal at the Biman and CA Wing wrote two separate letters to the BPC CAAB on the issues on October 10 and 20.
According to a letter to the BPC, the national carrier has been clearing jet fuel bills with the BPC under an agreement that runs till 2019.
In July 2007, when Biman was converted to a public company, it was unable to pay loans on time due to unfair competition with other airways and increases in jet fuel prices. Consequently, Biman's loan amount to BPC stands at Tk1428.73 crore from 2011 to 2019.
However, In 2014, the prime minister directed that the price of jet fuel from Biman be charged at the Kolkata market rate, but the Padma Oil Company Limited (POCL), a subsidiary of BPC, ignored the directive and continued to keep additional jet fuel fees, Biman said in the letter.
As a result, Biman claims BPC is charging it an additional Tk853.52 crore from 2014 to 2019. The airline also said it received arrears from various government agencies for operating flights, but it did not charge any interest on those dues.
According to Biman, BPC has put the interest of TK 658.67 crore on Biman's dues till November 2019, resulting in overdue bills of TK 853.52 crore and interest on earlier accrued debts of TK658.67 crore, to be revised.
However, Khaled Ahmed, director of operations and planning at BPC, told Dhaka Tribune Biman's explanation was untrue.
“We have a proper timeline of Biman's arrears, he said. BPC sources also said the corporation had decided to stop selling fuel to Biman as the national carrier repeatedly failed to pay dues on time.
“Biman has always paid less than it was supposed to, so the pile gradually built up,” one official said.
According to the letter to CAAB, Biman's debt to CAAB amounts to TK4,744.74 crore. Of the amount, the original bill was TK953.43, while VAT & Tax stands at TK 342.17 crore and the surge charge stands at TK 3,449.14 crore.
Biman demanded a waiver of TK3,449.14 crore in the letter to CAAB, claiming the surcharge was unreasonable.
However, CAAB Chairman Air Vice Marshal M Mafidur Rahman denied Biman's demand, adding that the aviation apex body cannot reduce charges or grant waivers once the charges are fixed by the government.
BPC says Biman’s explanation is untrue; CAAB denies airline’s demand of Tk3,449.14 crore waiver
File photo of the Biman's first Dreamliner Akash Beena Courtesy
Mamun Abdullah
November 4, 2022 2:38 AM
The national carrier Biman Bangladesh Airlines has demanded a loan waiver from the Bangladesh Petroleum Corporation (BPC) and Civil Aviation Authority of Bangladesh (CAAB).
According to Biman, an unreasonable surcharge of 6% from CAAB and high jet fuel prices charged by the BPC compared to the international market are responsible for the airline's massive debt.
Deputy Secretary Mohammad Abdul Awal at the Biman and CA Wing wrote two separate letters to the BPC CAAB on the issues on October 10 and 20.
According to a letter to the BPC, the national carrier has been clearing jet fuel bills with the BPC under an agreement that runs till 2019.
In July 2007, when Biman was converted to a public company, it was unable to pay loans on time due to unfair competition with other airways and increases in jet fuel prices. Consequently, Biman's loan amount to BPC stands at Tk1428.73 crore from 2011 to 2019.
However, In 2014, the prime minister directed that the price of jet fuel from Biman be charged at the Kolkata market rate, but the Padma Oil Company Limited (POCL), a subsidiary of BPC, ignored the directive and continued to keep additional jet fuel fees, Biman said in the letter.
As a result, Biman claims BPC is charging it an additional Tk853.52 crore from 2014 to 2019. The airline also said it received arrears from various government agencies for operating flights, but it did not charge any interest on those dues.
According to Biman, BPC has put the interest of TK 658.67 crore on Biman's dues till November 2019, resulting in overdue bills of TK 853.52 crore and interest on earlier accrued debts of TK658.67 crore, to be revised.
However, Khaled Ahmed, director of operations and planning at BPC, told Dhaka Tribune Biman's explanation was untrue.
“We have a proper timeline of Biman's arrears, he said. BPC sources also said the corporation had decided to stop selling fuel to Biman as the national carrier repeatedly failed to pay dues on time.
“Biman has always paid less than it was supposed to, so the pile gradually built up,” one official said.
According to the letter to CAAB, Biman's debt to CAAB amounts to TK4,744.74 crore. Of the amount, the original bill was TK953.43, while VAT & Tax stands at TK 342.17 crore and the surge charge stands at TK 3,449.14 crore.
Biman demanded a waiver of TK3,449.14 crore in the letter to CAAB, claiming the surcharge was unreasonable.
However, CAAB Chairman Air Vice Marshal M Mafidur Rahman denied Biman's demand, adding that the aviation apex body cannot reduce charges or grant waivers once the charges are fixed by the government.
