Fuel, food revenue falls, toll collection up

Budget 2023-24
Prothom Alo illustration

Bangladesh Power Development Board (BPDB) has purchased electricity at a premium cost but sold it at low prices. Similarly, Bangladesh Petroleum Corporation (BPC) bought fuel oil at a steep price only to sell at low prices. Trading Corporation of Bangladesh (TCB) purchased food items at a higher prices but sold these at a considerably reduced prices. As a result, these three state-owned entities suffered staggering losses in the current fiscal 2022-23, amounting to Tk 196.18 billion pushing these organisations into loss.

There are 49 state-owned organisations in the service and commercial sectors in the country. In the past 10 years, the state-owned organisations have incurred huge losses. After that, the companies made consistent net profit. Bangladesh Economic Survey released during the budget presentation revealed this on Thursday.

Bangladesh Bridge Authority (BBA) tops the state-owned establishments with highest profits through bridge toll collection. The company made a profit of Tk 28.43 billion followed by Chittagong Port Authority (CPA) with a profit of Tk 13.92 billion.

The survey shows, the companies combined incurred a loss of around Tk 137.42 billion as of 23 May this fiscal. The amount of net profit in 2021-2022 was Tk 17.08 billion while the profit was Tk 151.59 billion in 2020-21 fiscal.

Before this, these state-owned companies had a loss of Tk 26.04 billion in the past fiscal 2012-13. Those losses were shown to be due to shortage of electricity and fuel at the time

TCB has been added to this list of new loss-making bodies. The power sector has been making losses every year except for two years. Besides, BPC enjoyed consistent profit for seven years in between.

Meanwhile, these state-owned companies shared dividends with the government of Tk 12.79 billion in the fiscal year 2020-21 and Tk 8.8 billion in the fiscal 2021-22. In the current fiscal, they have paid a dividend of Tk 9.83 billion to the government.

From profit to loss

Bangladesh Road Transport Corporation (BRTC) made a net profit of Tk 1.02 billion in the fiscal 2021-22, but made a loss of Tk 840 million in the current fiscal. Trading Corporation of Bangladesh (TCB) made a profit of Tk 8.54 billion in the last fiscal but made a record loss of Tk 55.63 billion in the current fiscal.

TCB started counting losses in the current fiscal. TCB began selling products at affordable prices to 10 million low-income families in the country. As a result, the company has to buy products at higher prices and sell them at lower prices.

TCB chairman Brigadier General Ariful Hassan told Prothom Alo that food products were sold through trucks only during Ramadan. The organisation started selling food items at a low price among 10 million families. These products are often sold at half price which incurs huge losses. It is basically a government subsidy.

From loss to profit

Meanwhile, Bangladesh Steel and Engineering Corporation (BSEC) made a profit of Tk 550 million in the current fiscal despite a loss of around Tk 100 million in the fiscal 2021-22. BSEC currently operates 9 factories of which 5 are in loss and 4 are in profit. Apart from this, 3 factories of BSEC are operated as a joint venture. At least 6 other factories of the corporation are closed for a long time.

Bangladesh Chemical Industries Corporation (BCIC) made a loss of Tk 4.63 billion in the previous fiscal but made a profit of Tk 860 million in the current fiscal. BCIC now has 19 factories, out of which 9 are closed. Fertiliser is produced in 6 out of 10 factories in operation. The remaining four manufacture paper, cement, glass, sanitary ware and insulators.

Three loss-making organisations

Bangladesh Power Development Board (BPDB) made a loss of Tk 69.69 billion in the current fiscal. In the previous fiscal 2021-22, they counted loss of Tk 32.43 billion. However, the entity made profit in the previous two fiscals.

Bangladesh Petroleum Corporation (BPC) has made a loss of Tk 78.70 billion in the current fiscal; according to an economic survey. Earlier in the 2021-22 fiscal, it made a loss of Tk 19.83 billion. It made profits for seven years before that.

Time to make a decision

Selim Raihan, executive director of South Asian Network on Economic Modelling (SANEM), told Prothom Alo that given the operational approach of the government organisations over the years, it is time to make a decision about these organisations. In Singapore and Malaysia, these government agencies have been made profitable by following various models including privatisation and public-private joint ownership. But in Bangladesh regardless of any government, vested quarters take advantage by influence which is why the governments also cannot make decisions.

Selim Raihan said, “I strongly believe that it is time to put an end to the monopoly business by BPC and providing opportunities to the private sector. To address the issue of loss-making companies, it is crucial to implement initiatives that focus on increasing transparency and efficiency. Transparency must be ensured in the recruitment of these organisations.”

*This report, originally published in Prothom Alo print edition in Bangla, has been rewritten in English by Farjana Liakat