Govt opts for Chinese yuan to buy Russian choppers

The government has taken an initiative to complete the purchase procedure for two Mi-171A2 helicopters from JSC Russian Helicopters for Bangladesh Police by the end of the current 2021-22 financial year.

Both parties have also agreed that the payment will now be made in Chinese currency, the yuan, following an amendment to the procurement agreement since it’s not possible to pay in US dollar using SWIFT because of the sanctions imposed on Russia as a result of its invasion of Ukraine.

Officials concerned at a meeting at the Home Ministry on May 23 discussed the issues. It was presided over by the ministry’s Public Security Division Senior Secretary Md Akhter Hossain.

According to the meeting minutes, manufacturing company JSC recently sent a draft of the revised agreement with two amended provisions to the Bangladesh Police. The deal to buy the helicopters on a government-to-government basis was signed in November last year.

These medium-class civil passenger transport helicopters will further enhance the law enforcement agency’s capacity and efficiency. They will also enable the police to conduct key operations and increase surveillance in remote and inaccessible areas, apart from helping their fight against militancy and terrorism.

As per the Home Ministry’s proposal, the two helicopters will cost 42.60 million euros or around Tk 428.12 crore. Now it will be converted to Chinese currency to make the payment. As of Thursday’s rate, it will be 327,868,575 yuan.

According to sources who attended the May 23 meeting, the money allocated for the helicopters will be taken back if the procurement is not done before this fiscal year ends and it will be difficult to get an allocation for this next year. So, with the current fiscal nearing the end, there is an obligation to buy the helicopters as soon as possible.

Since JSC says it will take payment in Chinese currency through the Bank of China’s Moscow branch and no letter of credit (LC) was opened until now, there should not be any problem with making the payment once the Law Ministry vets and clears the amended agreement, they said. “Yes, the payment will be made in Chinese currency. There will be no problem in procurement as there is still enough time to execute the deal,” Md Jahangir Alam, additional secretary (Police and NTMC Wing) of the Public Security Division, told The Business Post.

The meeting minutes were sent to the Finance Division, Financial Institutions Division and the Legislative and Parliamentary Affairs Division. “We have received the draft of the amended agreement and reviewing it. We are feeling positive on this matter,” a senior Finance Division official, seeking anonymity, told The Business Post. Bangladesh Police signed a Memorandum of Understanding (MoU) with JSC Russian Helicopters on February 10, 2021.

The Cabinet Committee on Economic Affairs approved the proposal in principle on October 6. On October 27, the proposal received the final approval from the Cabinet Committee on Public Purchase.The deal between Bangladesh Police and JSC was inked on November 20 last year.