The ministry of finance has initiated a move aimed at giving sovereign guarantee to Bangladesh Biman under certain conditions including a five-year strategic plan
to reduce chronic loss of the national flag carrier.
Officials said the strategic plan of Biman would include a diagnosis of its performance in the past years and a roadmap to check the losses.
The ministry of finance has prepared a proposal suggesting that the government might issue a sovereign guarantee if the Biman complies with the conditions.
The proposal awaited approval of finance minister Abul Maal Abdul Muhith, they said.
Biman, a losing company for years, has been seeking sovereign guarantee for purchase of two new aircraft from the US aviation manufacturer Boeing.
Without the guarantee, Biman would not be able to take a loan of over $300 million from the US EXIM Bank to clear payment liability and take delivery of the planes in next year.
The finance ministry showed reservation to give the guarantee because of certain conditions under the Extended Credit Facility deal with the International Monetary Fund.
However, the IMF changed its stance following an understanding with the ministry of finance in last March.
Among the other conditions, the ministry of finance has suggested the government to set up a fund for giving sovereign guarantee. Besides, the ministry of finance wanted Biman to conduct its audit on a regular basis.
Since last year, the US ambassador in Dhaka, Dan Mozena, have urged finance minister AMA
Muhith to give Biman the sovereign guarantee.
The US ambassador in a letter to the finance minister late last year said Biman had already missed a number of deadlines ‘for pre-delivery payments for the next two aircraft’ from the manufacturers.
Biman’s annual loss rose to Tk 545 crore in the last financial year 2011-12. The amount of loss was Tk 41 crore in 2009-2010 and Tk 190 crore in 2010-11.
-With New Age input
