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BPC fuel stoppage disrupts Biman's domestic flights

Meeting with finance ministry tomorrow

REAZ AHMAD
Domestic flights of Biman Bangladesh Airlines did not operate from Thursday midnight till yesterday noon as Bangladesh Petroleum Corporation (BPC) stopped supply of jet fuel due to Biman's failure to pay huge outstanding dues.
Sticking to its 72-hour ultimatum to the authorities of the national flag carrier on October 17 to clear the dues, the BPC stopped fuel supply for its aircraft flying on domestic routes. This resulted in suspension of Dhaka-Jessore and Dhaka-Rajshahi-Syedpur flights scheduled for 8:15am and 10:30am yesterday.
Biman's international flights however operated as usual.
As per directives from the Prime Minister's Office (PMO) and request from the Civil Aviation Ministry, the BPC resumed fuel supply at around midday yesterday on condition that Biman would no more get fuel on credit from tomorrow.
The national airlines faced such a fuel supply stoppage for the first time in its over 30-year history.
Biman claimed clearing a substantial amount of outstanding dues for fuel over the years but the BPC said it
could no longer carry the burden of paying huge bank interests due to non-payment of around Tk 500 crore by Biman.
State Minister for Civil Aviation and Tourism Mir Mohammad Nasir Uddin expressed anguish at the stoppage of fuel supply at a time, he claimed, Biman was trying to clear arrear dues.
Energy Adviser Mahmudur Rahman however told The Daily Star last night, “Since it is weekend, we've given them (Biman) two more days until Sunday but after that BPC will not supply fuel on credit.” Dismayed at 'no initiatives' from Biman to pay the dues, Mahmudur Rahman said, “The situation has worsened to the extent that Sonali Bank has declined to open L/Cs for the BPC. I'll meet the finance minister on Sunday and apprise him of the situation.”
He went on, “Forget about its (Biman's) outstanding fuel bills of Tk 500 crore, it is not even paying any heed to our inability to continue supply of fuel on credit. We expect that at least from now on Biman will buy fuel on cash.”
He quoted BPC figures to claim that in the last one year, excepting two months, Biman did not make full payment for its monthly fuel purchase. “This can't go on for ever. If we allow this to happen, the whole financial discipline will break down.”
Mir Nasir however told this correspondent last night “Biman paid Tk 321 crore in fuel bills during the period 1996-2001 of the Awami League rule, leaving outstanding dues of Tk 558 crore that we had to inherit.”
He claimed Biman paid Tk 929 crore in fuel bills to the BPC over the last four years. But it could not clear its accumulated previous dues largely
because of 'increased fuel price that we could not meet by enhancing Biman fares to that level'.
The state minister added, “Last year Biman used to get jet fuel at 26 cents per litre, which now stands at 56 cents. But we did not increase passenger fares to match that because it is simply not possible.”
On the BPC ultimatum, he said, “ Biman paid Tk 10 crore to the BPC in the last four days. Payment for fuel stood at Tk 29 crore this month.
“I have no language to express my anguish. If things go on like this, it will become a question of survival of Biman, which is facing a liquidity crisis.”
While the energy advisor and the BPC authorities found Biman very reluctant to resolve the matter urgently, Biman officials claim that in response to the BPC chairman's October 17 ultimatum, Biman's Managing Director-in-charge Abdus Salam made it clear that Biman would make all efforts to pay the fuel bills on a priority basis.
The overstaffed national flag carrier now operates flights to 26 international and seven domestic destinations with a fleet of five DC-10s, four Airbuses and three F-28s.