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BRTC profit falls despite heavy investment

Shakhawat Hossain

The government is going inject fresh funds into Bangladesh Road Transport Corporation that is struggling to improve its operational profit despite heavy investment in last five years, officials said.
More than 900 buses were purchased for the state-owned corporation in last five years at a cost of around Tk 700 crore. But the corporation cut a sorry figure in improving its operational profit.
The BRTC insiders quoting internal assessment said net profit of the corporation went down to Tk 3.2 crore in the last fiscal year from Tk 4.7 crore in 2008-2009, the first year of the present government. 
One of the major reasons for the falling net profit was BRTC’s policy of running around 1,250 buses under lease system. The lessees had paid less than the expectation of the corporation, they said.
Communications minister Obaidul Quader told New Age that they had decided to scrap the lease system last October to run the buses with BRTC’s own manpower. 
‘No more lease after the existing deals expire,’ he said, adding that he had already asked the BRTC officials making the lessees accountable.
Meanwhile, the government was at the final stage of procuring 500 trucks for BRTC at more than Tk 300 crore.
Quader said the planning commission had given consent to the project recently.
The BRTC has now 182 trucks, 80 of them are lying inoperative due to their economic non-viability.
A senior ministry official said BRTC wanted to purchase the trucks from a Chinese company under an arrangement of hard-term loan from the Chinese government.
BRTC proposed to purchase 450 trucks, 10 refrigerator vans and 40 covered vans with an estimated total cost at Tk 328 crore, he said.
The interest rate and repayment period of the hard-term loan would not be as favourable as that of confessional loans provided by the donor agencies like the World Bank and Asian Development Bank.
The interest rate of the proposed purchase deal will be around 5 per cent, said the economic relations division official. The repayment period of the loan would be short.
According to an assessment by the ministry of finance, the amount of total arrear of the BRTC stood at Tk 554 crore as of 2010-11. The finance ministry officials said the corporation was one of the major defaulters in loan repayment. 

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