Cash-strapped Biman waives Tk30cr demurrage charges for importers

At a time when Biman Bangladesh Airlines is in severe financial crisis, it has waived Tk30 crore in demurrage charges incurred against imported raw materials that remained undelivered in the warehouse of the Dhaka airport.

Biman took the decision in response to requests from business associations, including the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Federation of Bangladesh Chambers of Commerce and Industries (FBCCI), said its managing director Md Mokabbir Hossain.

Demurrage charges have been waived for keeping imported goods in the warehouse for an extended period beyond the free time during countrywide lockdown.

In a circular, Biman said that the waiver will be applicable to goods imported from March 23. The waiver will be cancelled if the goods are not taken by May 10.

Imported goods which have already been taken by this time will not come under the waiver, according to Biman.

The waiver of demurrage charges will intensify Biman's current cash crisis, said a senior executive of the company.

He said that though exporters who imported those raw materials got various incentives for their losses during the coronavirus crisis, the aviation industry did not get any attention from the government.

Biman sought for working capital of Tk1,500 crore from Sonali Bank to keep it operational but got approval for only Tk1,000 crore.

Until April 20, 2,033 tonnes of imported raw materials were lying undelivered in the warehouse. But the warehouse has a storage capacity of 800 tonnes, thus creating a problem for Biman.

Biman says that a large portion of the undelivered raw materials was imported by garment factories.

Usually, cargo importers get three days to keep their raw materials in the warehouse free of cost. Demurrage becomes applicable if they cannot take delivery of the goods within this period.

Biman initially charges Tk25 per unit for 10 days after the three-day period ends. Then it increases the charge to Tk100 for the next 10 days, and then to Tk300 for the 21 days after that.

Although passenger flights have been suspended since the last week of March to curb the spread of coronavirus, cargo transportation has remained normal.

The consequence of undelivered garment raw material is also reflected in the fall of export cargo that Biman experienced in April.

In the first 10 days of April, export through air cargo was 403 tonnes, down by 80 percent from the usual export trend before the coronavirus outbreak.

Biman would see cargo intended for export reach 200 tonnes every day before the Covid-19 crisis, according to the company.