Govt leans on alternative buy, sell deal amid crisis

The government is planning to import essential commodities – including coal – through alternative sale and purchase agreements instead of the letter of credit (LC) method, in a bid to tackle the ongoing economic crisis.

As part of the initiative, under the import policy order, the commerce ministry has decided to increase the price limit under Telegraphic Transfer (TT) method from $5 lakh to $50 lakh. The move would help Bangladesh import essential commodities to cover domestic demand.

The decision came on Thursday at a ministry meeting chaired by Senior Secretary Tapan Kanti Ghosh.

Representatives from the Bangladesh Bank, National Board of Revenue, Power Division, industries ministry, Department of Energy and Mineral Resources, Bangladesh Trade and Tariff Commission, Chief Controller of Imports and Exports, and ITT were also present there.

Sources say the commerce ministry had called the meeting to discuss the idea of importing industrial raw materials and capital equipment through sale and purchase agreements.

As coal import costs are high, at the meeting, the participants decided to increase the limit to $50 lakh. This move will help keep running the power plants that have shut operations, or on the way to close doors due to fuel shortage.

Ministry sources further say importers have already submitted a number of applications to the commerce ministry for importing coal, and they want to import coal through the TT method. Coal imported this way will be supplied to the power plants. So, the government will grant these importers this permission in a speedy manner.

Speaking to The Business Post, commerce ministry Senior Secretary Tapan Kanti Ghosh said, “An importer will need ministry permission to import using the TT method. We will permit this on a case by case basis for import of essential commodities.

“We are increasing the import price limit for this purpose.”

Ministry sources say the hike in import price limit will also help the country bring in industrial raw materials.

According to the existing Import Policy Order 2021-2024, registered industrial sector importers can import raw material to use in their factories, capital machinery, and fire doors without any price limit, and commercial importers can import goods and products worth up to $5 lakh by making payment from Bangladesh.

However, the government – on a case by case basis and without any price limit – can grant import permission through TT instead of LCs, in a bid to expand exports.

Ministry of Power, Energy and Mineral Resources sources say the power development has been unable to pay power plant bills due to the financial crisis. This is why coal-fired power plants are struggling to import coal.

Among those, Patuakhali 1,320MW Power Plant shut down operations from last Wednesday. Rampal 1320MW Power Plant in Bagerhat got shut down twice in recent times due to coal shortage. Later, some coal was imported to keep the plant running.

Bangladesh India Friendship Power Company Ltd (BIFPCL) Managing Director Engineer Sayeed Akram Ullah said the plant will be able to run for a week more with the current coal reserves.

Though the power plants are trying to open LCs with banks for importing coal, they are not getting any responses.

On the issue, BCPCL Director, BCPCL (Ex-officio) & Managing Director Engineer AM Khurshedul Alam said, “We are unable to open LCs at the moment. The government’s move regarding TT is a good initiative.

“This will allow power plants to keep running.”

He continued, “BCPCL has made a 10-year deal with Indonesia. As part of the agreement, we cannot import coal from anywhere else. We have to import coal from Indonesia until 2028. We cannot import coal from them unless we pay their dues.

“And we cannot import coal from anywhere else.”