Bangladesh Services continues running BICC despite end of deal
The BSL has to run the Bangabandhu International Conference Centre for only 20% of the revenue earned from it
Despite the completion of lease term and failure to clear its dues, the Bangladesh Services Ltd (BSL) is running the Bangabandhu International Conference Centre (BICC).
The BSL owes Tk391 crore as rents to the Public Works Department (PWD) – owner of BICC – which sent a letter to the housing and public works ministry in June this year, recommending not to renew the contract with the BSL and exact the dues before the end of the lease period.
When no new operator was appointed at the end of the lease period in June, the BSL and the PWD agreed that the BSL will continue running the BICC until a tender process in this regard is completed.
As a result, the BSL – a state-owned company – has to run the BICC for only 20% of the revenue earned from BICC, while the PWD will get the remaining 80%.
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Under the 10-year contract signed with the PWD in 2012, the BSL received 100% of the revenue earned from managing the BICC.
Sources said the revenue earned by the BSL – a company listed in the stock exchanges – will decrease as a result of the new arrangement.
BSL Managing Director Md Atiqur Rahaman told The Business Standard, "There has been no decision on a new deal or extending the previous one. The Bangladesh Services Ltd is still in charge of the BICC. It will continue operating the conference centre until a new tender is awarded in this regard."
According to the PWD sources, the BSL paid full rents for the first three years and the partial rent for the fourth year after taking lease of the BICC in 2012, but after that it has not paid a single penny for over six years.
So far, the BSL has paid Tk117.50 crore to the PWD.
Sources at BSL said after taking lease, the company was earning well from the BICC, but it later declined. Due to the Covid-19 pandemic, the revenue from the convention center has decreased drastically, increasing losses.
According to BSL financial reports, the company earned well from BICC till the pandemic hit the country, but it could not reach a break-even point at which expenses and revenue are equal.
From FY17 to FY21, the BSL earned around Tk161 crore from managing BICC.
The company posted Tk92 crore loss in total in FY17, FY18, FY19 and FY21. In FY20, the company posted Tk4.75 crore profit.
Bangladesh Services Limited was listed in the capital market in 1984.
It operates InterContinental Dhaka, the first five-star hotel in the country.
BSL also operates the Balaka Executive Lounge at Hazrat Shahjalal International Airport, and other two complexes.
In the first three months of FY22, the BSL's revenue increased to Tk77.45 crore, a 116% increase from Tk36.66 crore during the July-March of FY21.
Despite the revenue growth, the BSL incurred Tk74.87 crore loss in that period, which was lower than Tk81.80 crore loss in the same time of the previous fiscal year.
