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Computer Supply Fiasco

Govt baffled over Dutch court fine

Mustak Hossain
The government is in a fix over payment of a Tk 31 crore fine sentenced by a court in The Hague for cancelling a contract with a Dutch companyforsupplying computers.
The computers and accessories were intended to be used for implementing an education ministry project funded by a grant of the Netherlands.
The Dutch court has asked Bangladesh to pay the amount as fine and compensation to the plaintiff, Tulip Computers International NV, immediately, a senior diplomat of the Netherlands Embassy in Dhaka confirmed.
The diplomat, who talked to The Daily Star on condition of anonym-
ity, however, refrained from commenting on the possible consequences of the fine on bilateral relationship. "The matter is now being dealt by the court, so no comment," he said.
The Netherlands embassy has informed the Bangladesh government that if the court order is not followed then ocean- and air-liners carrying Bangladesh's flag would become liable to confiscation in European Union countries, according to EU laws.
Bangladesh can't even appeal, as the case was settled about four months back.
In December 2000, the Netherlands government had agreed to provide about Tk 49.95 crore as grant for introducing computercourses at secondary and higher secondary levels in 3,382 educational institutions under a project that was scheduled to be implemented by March 2001.
After a series of discussions with Bangladesh government, the Dutch government selected Amsterdambased Tulip Computers, the lone computer manufacturer in that country, as the project implementation agency.
An inter-ministerial meeting approved the 'price offer' and the 'commercial contract' with the Dutch company.
Tulip Computers'offer amounted to 50 percent of the total project cost. It would be supplying 10,388 personal computers, uninterrupted power supply (UPS), printers and software for the project. Under the project, 6,768 teachers, two each from every beneficiary institution, were also scheduled to receive computer training.
In its first offer, the Dutch company had quoted a unit price ofTk 99,000 for the computers. Following negotiations, it later revised the rate to Tk 70,000, which too was found to be much higher than the prevailing market price, sources said.
The Cabinet Purchase Committee on December 20, 2000 cancelled the procurement initiative, finding the price offer to be 'inflated and unsolicited', Education Minister M Osman Farruk told The Daily Star.
Following the suspension of the project, Tulip Computers lodged complaint with a Dutch court accusing Bangladesh government of breaching an international contract.
Bangladesh could noteven contest in the case due to time constraint, said Osman Farruk: "We wrote to the Bangladesh embassy in the Netherlands to appoint a lawyer to represent Bangladesh in the case. But it was not possible due to a very tight schedule."
Now, facing the immediacy of the verdict, Bangladesh will try to reach an amicable solution through diplomatic efforts, so as to maintain existing bilateral relations, a senior official at the education ministry said yesterday.
"The education ministry also has written to the cabinet secretariat to convene an inter-ministerial meeting to fix the modus operandi of tackling the issue," the official said, adding representatives from the foreign, law, education and commerce ministries and the Economic Relations Division would be there.