Chattogram Customs House managed to organise only two e-auctions in the last 10 months since its inauguration on 27 October last year.
E-auction activities – introduced with the aim of making auctions more transparent, modern, and up-to-date – could not move forward due to various obstacles, including software-related problems, complexities in uploading pictures of catalog-based products, and fears of pay order fraud.
Traders participating in the auction claimed that there is confusion among them about policy related to e-auction.
They are not taking part in the e-auction as they are not sure when the pay order money will be refunded if one cannot be the highest bidder in the auction.
Al Amin, deputy commissioner of the auction branch of Chattogram Customs House, said there are still problems in the software. As a result, the amount of money and other information mentioned in the submitted tender get changed.
"These have to be fixed in coordination with the relevant officials of the National Board of Revenue (NBR), which is time-consuming. Moreover, pictures of the products of each lot have to be uploaded separately, which requires additional manpower," he said.
"Permission from the port authorities is also required before entering the Chattogram Port to take pictures of the products eligible for auction. Due to these complications, e-auctions could not be organised even after several initiatives were taken."
Sources said the e-auction of Chattogram Customs House was scheduled to be inaugurated in July 2019. But it was delayed due to various complications and the onset of the coronavirus pandemic in the country. An e-auction was finally launched on 27 October 2020.
According to Chattogram Customs House, in the first e-auction, tenders were submitted in eight catalogs, out of a total of 16 catalogs. Of these, four lots were approved and only three lots were released.
The last e-auction was held on 20 January in 20 catalogs when 10,93,519 kg of onions were auctioned. Tenders were submitted in 19 catalogs. Of these, the products of 13 catalogs have been released.
Under the rules, delivery of goods imported from different countries has to be taken within 30 days after they are unloaded at the port yard. If any importer does not take the goods within this time, customs gives him a notice. If the product is not delivered within 15 days of the issue of the notice, the customs authorities can put up the goods for auction. Besides, products seized under false declarations can also be put up for auction. Chattogram Customs House organises an auction every month. At times, multiple auctions are also organised in a month.
According to Chattogram Customs sources, major frauds were detected in three pay orders submitted with tenders in two auctions held, following the previous system, in May and June. The customs authorities received a complaint against a bidder named Khalilur Rahman that he had fraudulently submitted three pay orders of Tk350, issued from Exim Bank's Sheikh Mujib Road branch, as pay orders of Tk47,67,858. Fearing that such fraud could take place in e-auction as well, the authorities canceled the e-auction scheduled for July.
Traders participating in the auction said e-auction is a call of the times. However, many bidders are not yet familiar with the process. The customs authorities need to take initiatives to organise more training and publicity.
Iqbal Hossain, proprietor of R&H Syndicate, which regularly participates in auction activities of the customs house, told The Business Standard that 10% of the total declared price has to be paid through pay order while submitting the tender. If the highest bidder is not selected in the auction, the customs authorities return the pay order to the bidder within five days. There is no policy on how many days it will take to refund the pay order if one is not selected as the highest bidder in the e-auction.
"Most of the traders take loans from banks to participate in the auction. The traders fear that they might face various problems, including increased interest on loans if the pay order gets stuck. That is why they are not interested in taking part in e-auction," he added.
According to Chattogram Customs House sources, traders will be able to submit bids by entering the e-auction link displayed on the website of the National Board of Revenue. Each lot consists of one type of product in e-auction. Bidders will be able to submit tenders and related documents as per the catalog from their homes.