DSCC in financial crisis: Salaries and bonuses paid with borrowed money

Dhaka South City Corporation (DSCC), responsible for providing civic services in the southern part of the capital, has fallen into a severe financial crisis.

The situation has deteriorated to such an extent that the organisation had to borrow money last month to pay salaries and bonuses to its officials and employees.

Senior officials are now worried about whether it will be possible to pay salaries next month from the corporation’s own revenue.

The DSCC administrator and Bangladesh Nationalist Party (BNP) leader Abdus Salam has already sought the prime minister’s assistance to overcome the crisis.

After meeting the prime minister on 4 March, he told journalists that revenue collection had fallen short of expectations in recent months. Compared with previous years, lower revenue collection this year has pushed the city corporation into financial difficulty.

Abdus Salam said that if the work orders issued indiscriminately during the previous administration were implemented in full, the city corporation would effectively collapse. “It is simply not possible,” he said.

Sources in the DSCC revenue department said that since the mass uprising on 5 August 2024, revenue collection has declined significantly over the past year and a half. During this period, revenue exceeded Tk 100 crore in only two months.

They said in February this year, when the parliamentary election was held, revenue collection stood at just Tk 42 crore.

According to the officials, only a few years ago, monthly revenue collection regularly ranged between Tk 70 crore and Tk 100 crore.

The highest revenue collection in the history of DSCC occurred in the 2023–24 fiscal year. In that year, before the fall of the Awami League government, the corporation collected Tk 1,061 crore in revenue. However, as revenue did not increase afterwards, the accumulated funds from that period had to cover expenses over the past 18 months, placing growing pressure on the corporation’s finances.

Officials concerned with the city corporation say that after the mass uprising of July 2024, a large volume of bills for development projects was paid off hastily. Many bills that had previously been withheld due to allegations of irregularities during the tenures of former mayors Mohammad Sayeed Khokon and Sheikh Fazle Noor Taposh were later cleared and paid to contractors. In several cases, some officials of the corporation’s engineering department allegedly facilitated the payments from the corporation’s own funds in exchange for commissions.

An official from the corporation’s accounts division, speaking on condition of anonymity, said that during the tenure of the interim government there were instances where pressure was exerted to secure bill payments. In some cases, there were allegations of coercion, intimidation and even the creation of mobs.

The official added that some officials in the engineering department allegedly collaborated in commission-based dealings that allowed contractors to obtain payments quickly, resulting in a large outflow of funds from the treasury within a short period.

Sources in the DSCC engineering department said that nearly Tk 1,000 crore had been paid over the past 19 months for development work. All of it came from the corporation’s own funds. However, there have been allegations that bills were paid even where there was little visible progress in many projects at the field level. In addition, work orders of about Tk 1,400 crore have already been issued.

DSCC administrator Abdus Salam told Prothom Alo that not only had the corporation’s funds been exhausted, but some unnecessary projects had also been approved through work orders.

He added that they would conduct an investigation to examine whether anyone within the corporation had been involved in hastily clearing previously stalled bills.

Sources in the office of the DSCC chief executive officer said that the corporation requires around Tk 25 crore each month to cover salaries, allowances and operational expenses. However, only Tk 16 crore currently remains in its general fund.

The three largest sources of revenue for Dhaka South City Corporation are holding tax, trade licence fees and leases of markets and properties.

In addition, revenue is collected from advertising and signboard leases, parking leases, birth and death registration fees and various certification fees.

However, officials say that expected revenue is not being generated from these sectors in recent times.

Professor Adil Muhammad Khan, Executive Director of the Institute for Planning and Development (IPD), told Prothom Alo that the current financial crisis of DSCC is not solely the result of a revenue shortfall; administrative inefficiency and opaque expenditure management are also major factors.

He noted that during the tenure of the interim government, many long-standing unpaid bills—some of which had been withheld due to irregularities or errors—were reportedly cleared through commission-based dealings. As a result, a large amount of money was disbursed within a short time.

Adil Muhammad Khan added that over the past year and a half, the primary focus had been on settling development project bills, which has disrupted financial balance and now risks affecting the city corporation’s service delivery.