The government is purchasing two bulk carrier ships from Hellenic Dry Bulk Ventures LLC at a cost of around BDT 9.35 billion. The ships are being bought for Bangladesh Shipping Corporation (BSC), which operates under the Ministry of Shipping. The Cabinet Committee on Government Purchase approved the proposal on August 12. Although the supplier is based in the United States, the two ships are being built in China, from where they will be shipped to Bangladesh.

When BSC, the state-owned shipping company, began its journey 53 years ago, its fleet had only two vessels. Over the years, another 44 ships were added. However, by the late 1990s, 36 of them were retired as they reached the end of their operational life. The number of vessels eventually dropped back to two. In 2018, BSC purchased six vessels from China, raising the fleet to eight. During the Russia-Ukraine war, the vessel Banglar Samriddhi was damaged in Ukraine. Later, in September and October last year, two other ships — MT Banglar Jyoti and MT Banglar Shourabh — were damaged in separate fire incidents. Both were later sold for scrap. BSC’s fleet now has only five ships, making the need for new vessels more urgent.

The Ministry of Shipping presented the proposal for purchasing the two ships at Tuesday’s meeting of the Cabinet Committee on Government Purchase. The meeting was chaired by Finance Adviser Dr. Salehuddin Ahmed. According to available information, each bulk carrier will have a capacity of 55,000 to 66,000 DWT. Three companies submitted bids in the tender process, of which two were considered technically responsive. After completing all tender procedures, the government decided to purchase the two ships from the lowest bidder — Hellenic Dry Bulk Ventures LLC of the United States — for $76,698,000, based on the recommendation of the Tender Evaluation Committee (TEC). In Bangladeshi currency, that amounts to BDT 9,357,156,000. BSC will finance the purchase from its own funds.

The process of purchasing three more ships for BSC is expected to be completed by December this year. In total, the current interim government has initiated the procurement of five ships for the corporation. In addition, BSC’s board has given preliminary approval to buy six more vessels from South Korea.

During the global COVID-19 pandemic, freight rates for ships and charges and commissions for related services rose sharply. This gave a significant boost to the business of shipping companies. As a result, the Bangladesh Shipping Corporation (BSC) has seen notable growth in revenue and profit over the past three years. Back in FY 2020–21, the corporation earned BDT 2.74 billion, with a net profit of BDT 720 million. By the end of FY 2023–24, revenue had reached BDT 4.88 billion, while net profit stood at BDT 2.5 billion.

As part of its strategic plan to expand its fleet and boost revenue and profit, the BSC board has decided to purchase 22 vessels over the next five years. Under this plan, the procurement of these ships has been prioritized. The process to buy 15 ships is already well underway. For the remaining seven, a Preliminary Development Project Proposal (pre-DPP) has been sent to the Economic Relations Division (ERD) to explore possible funding sources.

Recently, the Chief Adviser held a meeting with the heads of all agencies under the Ministry of Shipping. At the meeting, the government decided to provide loans to BSC to purchase three more ships—two bulk carriers (55,000 DWT and 66,000 DWT) and one MR tanker (45,000 to 55,000 DWT). BSC has been instructed to complete the procurement process by this December. Work has started on preparing the DPP and conducting a feasibility study for the purchase. The government loan is expected to be in the range of BDT 17 billion to BDT 20 billion.

In February this year, the Planning Commission gave preliminary approval to a project for BSC to buy six container vessels from South Korea. The project cost is estimated at $330,320,000, which is about BDT 40.3 billion. As part of the process, a concept paper has been signed between BSC and South Korea’s EDCF, under which the EDCF is conducting the project’s feasibility study. The project will proceed after their approval.

Meanwhile, the state-owned BSC’s business is steadily expanding through Chinese ships. The process to buy four more vessels from China is nearly finalized. These include two crude oil mother tankers and two mother bulk carriers. The cost will be $241,920,000, to be financed through a loan from China.

BSC Managing Director Commodore Mahmudul Malek told Bonik Barta, “The ships are being brought from China. However, the company supplying the two ships is from the United States. This is a strategic decision for us. Often there is a fear of U.S. sanctions on ships made in China. But if the supplier of the Chinese-built ships is from the United States, there is no such fear. As a result, these ships will be able to go to ports in the U.S. and all other countries. Besides, the government has recently decided to provide BSC with a loan to buy three more ships. At the same time, feasibility studies are underway to purchase six ships from South Korea. All in all, BSC has a strategic plan to buy 22 ships in the next five years.” He said the company’s revenue and profit will increase further once these ships join the fleet.

Seeing the potential for good profits in the shipping business, Bangladesh Export Import Company (BEXIMCO) Limited, owned by Salman F Rahman, bought shares from the stock market in 2022 and joined the BSC board. A director was also appointed as BEXIMCO’s representative on the board. However, in August last year, after the country’s political shift, that director was removed.

Recently, state-owned BSC’s shares have attracted increased interest from investors in the country’s capital market. On October 28 last year, the company’s share price at the Dhaka Stock Exchange (DSE) was BDT 56. As of August 12, BSC’s share price rose to BDT 112.80.

Regarding the matter, Shipping Adviser Brigadier General (Retd.) Dr. M Sakhawat Hussain told Bonik Barta, “The two ships are being purchased through a completely transparent process. No loan has been taken in this case; rather, the payment is being made from BSC’s own funds. The ships are aerodynamic and equipped with dual-fuel capability. Compared to other ships, these will also be faster. The existing vessels have become old. In this situation, it is necessary to buy new ships to expand the fleet. The government will provide BSC with a loan to purchase three more vessels.”

When asked if the vessels were being purchased from a U.S. company as part of a tariff agreement with the United States, the Shipping Adviser said, “Discussions about purchasing these ships began well before the tariff announcement. So, this has nothing to do with the tariff issue. The company from which the ships are being purchased is from the United States. But the two ships are being built at a dockyard in China.”