Six years not enough to build 2 BIWTC vessels

New Western Marine Ship Builders – a company based in Chattogram – had signed a Tk 67.76cr crore deal with the Bangladesh Inland Water Transport Corporation (BIWTC) back in 2016 to build passenger vessels MV Bangmata and MV Banga Tori.

The contractor took out around Tk 64 crore as payment, but over the span of nearly six years, completed less than 65 per cent of the work. These unfinished vessels, previously set to join the BIWTC fleet to serve passengers by 2019, are now gathering rust.

Under the circumstances, the BIWTC blacklisted New Western Marine Ship Builders, and terminated both the contract and work order earlier this year, insiders said, adding that the BIWTC then planned to float a new tender so that another company may finish the project.

The contractor – which is a sister concern of Western Marine Shipyard Ltd – then approached the shipping ministry, requesting cancellation of the work order termination and blacklisting by the BIWTC.

Insiders say the ministry has decided to give another chance to New Western Marine Ship Builders for completing the two vessels, after the company promised in writing that they would finish work.

However, sources say the contractor has gone nearly bankrupt, and the bank is not letting it open letters of credit (LCs). This issue is preventing them from importing machinery for the two BIWTC vessels.

Under such circumstances, the shipping ministry asked the company to import the items by alternative means, because opening LCs under another identity is not possible.

‘There have been some irregularities’

When approached, the shipbuilding company’s Executive Director Retd Captain Nasrullah declined to comment on the matter, and recommended contacting the BIWTC for any queries.

“The shipping ministry issued some directions to the BIWTC, but we do not know anything about it,” he claimed. Moreover, Nasrullah neither confirmed nor denied that his company may be facing financial difficulties.

Speaking to The Business Post, an insider on condition of anonymity said, “The executive director was one of the company officials who participated in the negotiation process with the ministry.

On the issue, Shipping Secretary Md Mostafa Kamal said, “A committee formed by the ministry has already submitted its recommendations. These recommendations have been forwarded to the BIWTC for implementation.”

Meanwhile, BIWTC Chairman Ahmed Shamim Al Razi said, “We will wait and see what the shipbuilding company does now. The company has been given a second chance by the ministry. If they can finish the work, it would be good for them in the future.”

When asked how exactly the contractor managed to withdraw most of the pay without ever finishing the work, Razi said, “There have been some irregularities in the whole process, and we will look into that as well.”

Razi was not the BIWTC chairman when the deal with New Western Marine Ship Builders was signed back in 2016.

Another BIWTC official, preferring not to be named, said, “Despite fresh initiatives, we have serious doubts regarding the fate of the two vessels. The shipbuilder did not comply with the deadline when they were under the contract.

“Imagine what they would do when there is no valid contract. The work order too has been terminated already.”

He added, “If we could call a fresh tender, we would have to spend some additional money, but the remaining construction work of the two vessels would be completed for certain. With this move, the vessels could be added to the fleet sooner.

The passenger vessels MV Bangmata and MV Banga Tori were supposed to join the BIWTC fleet in 2017. Later, the deadline was extended to 2019. However, the company did not apply to extend the deadline again.

The BIWTC was not supposed to have a project manager after the contract term expired, but an official was given “interio honor” as project director, and insiders say it is a breach of regulations. They claim that the project director cleared bills of the contractor illegally.

The BIWTC gave the company Tk 5 crore to open LC for importing machinery, but they could not do so in one and a half years, sources told The Business Post.

Initiative was launched back in 2015

The BIWTC in April, 2015 took the initiative to have two vessels built under the project titled “Procurement of Two New Passenger Vessels for the Dhaka-Barisal Khulna Route.” The New Western Marine Ship Builders got the construction contract for Tk 67.76cr.

On June 1 and December 19 in 2016, BIWTC signed two agreements with the company.  Despite the fact that the work was not completed by 2019, of the contract money of Tk 68 crore, the shipbuilder already managed to take a payout of Tk 64 crore from the BIWTC.

As the company could not finish the work, the BIWTC issued warning letters, also wanted the shipbuilder company to hand over the incomplete ships, but nothing came out of the efforts.

The shipping ministry then formed a committee to decide the fate of the ships. The committee filed their report with a set of recommendations two months ago. The ministry held meetings with the ship builder to somehow get the work done.

Because of failure in completing the vessels’ construction, the BIWTC in February this year cancelled the contract.

In a letter sent to the shipbuilding company, the authorities said the ships are part of the government’s implementation of development projects. Passengers are being deprived of services as the two ships are not put into service following construction.

This is causing financial loss to the organisation and tarnishing the image of the government, the letter had pointed out. It also requested the handover of the two ships in their existing condition.

Md Saiful Islam is the Chairman of both the New Western Marine Ship Builders and Western Marine Shipyard Ltd. The former however is not listed with the stock exchanges.

Between July 2019 and June 2020, New Western marine Ship Builders’ opening balance was Tk 37.52 crore, which was Tk 40.79 crore in the previous FY. During the same period, their closing balance was Tk 44.42 crore, according to the company’s annual financial report.

The Western Marine Shipyard has earned Tk 3.89cr through interest from New Western Marine between July 2019 and June 2020.