Shipping ministry says no to finance ministry’s loan

The shipping ministry has refused to use the finance ministry’s loan to implement a Tk 1,550 crore project involving the Mongla port’s maintenance dredging.

It has instead sought a government fund of Tk 1,395 crore while Tk 155 crore will come from Mongla Port Authority.

The ministry on July 28 sent a letter to the Finance Division’s senior secretary, requesting him to cancel the condition of using a loan to implement the project and approve a government fund of Tk 1,395 crore instead.

It said it is important to implement the project to maintain the depth achieved by capital dredging carried out recently at the port, especially in the outer and inner bar areas. Otherwise, the port’s channel will face navigability problems.

It will not be possible to bring even low-draft ships to the port if there is a navigability problem in the channel. In that case, the port’s revenue will decrease, meaning it will not be possible to pay staff salaries, allowances, and pensions, read the letter.

Besides, many projects implemented through huge investments in various infrastructures of Mongla Port Authority will remain unused, the letter said.

It said the Mongla port currently earns about Tk 300 crore annually while the customs department earns around Tk 3,000-4,000 crore a year from it. The customs department will lose huge revenue if the project is not implemented.

Moreover, the annual transportation of 45 lakh tonnes of coal for the Rampal power plant may be disrupted if the project is not implemented immediately. The imports of raw materials for the Rooppur nuclear power plant may also be disrupted.

The letter further said Mongla Port Authority deposits about Tk 40 crore in the government treasury in VAT and other taxes annually after meeting its own operational expenses from its earnings.

There is a surplus of less than Tk 50 crore per annum after meeting the port’s operating expenses as well as paying employees’ gratuities, provident funds, and various taxes.

But the surplus money is used to do various types of work, such as building cargo sheds, yards, and roads, from time to time. So, the port authorities end up having no surplus, the letter explained.

The shipping ministry said it is not possible to implement the project by fulfilling the conditions given by the Finance Division.

Earlier on June 22, the finance ministry sent a letter to the shipping ministry’s secretary, saying the government had agreed to finance 90 per cent of the project’s estimated cost with a loan, subject to several conditions.

The conditions are that the loan’s interest rate will be 5 per cent and the repayment period will be 20 years with a five-year grace period.