Customs bureaucracy: Luxury cars rot at Ctg port
A striking example is a Suzuki car, imported in 1995, which remained unclaimed due to legal issues. Despite multiple auction attempts by the Custom House, it lingered, exposed to the elements for 30 years. By February 2025, it was a stripped, rusted hulk, finally scrapped for a mere Tk24.25 per kilogram
Highlights:
- Vehicles rot at port, sold as scrap for minimal return.
- Unrealistic reserve prices prevent timely auctions and vehicle clearance.
- Luxury cars repeatedly fail auctions due to exorbitant valuations.
- Laws block sales if bids don't meet minimum reserve price.
- Bureaucratic inertia worsens port congestion and unpaid dues accumulate.
- Experts urge urgent auction process reform and legal accountability measures.
This is a stark tale of how rigid policies and bureaucratic inertia are bleeding government coffers and condemning valuable national assets to decay. At Chattogram Port, vehicles, once worth crores, are left to rust for decades, eventually sold for a pittance as scrap, highlighting systemic flaws in customs and auction procedures.
A striking example is a Suzuki car, imported in 1995, which remained unclaimed due to legal issues. Despite multiple auction attempts by the Custom House, it lingered, exposed to the elements for 30 years. By February 2025, it was a stripped, rusted hulk, finally scrapped for a mere Tk24.25 per kilogram.
This single instance is part of a larger, alarming pattern. In the same month, 74 other vehicles – including luxury cars, trucks, and dump trucks – met an identical fate. With an estimated combined original value of Tk70 crore, these vehicles were sold as 147.68 tonnes of scrap, yielding the Customs a paltry Tk42.80 lakh. Astonishingly, the Custom House holds no records on the original importers, the number of auctions held, or the reasons for their repeated failure to sell.
Unrealistic reserve prices: A recipe for decay
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These vehicles were imported by individuals who, for various reasons, failed to clear them from the port. The critical question arises: why were they not sold at fair or even reduced prices, instead of being left to deteriorate for years? The answer often lies in unrealistic reserve prices.
Consider the case of 112 luxury vehicles – Mercedes, BMW, Jaguar, Toyota Land Cruiser, Range Rover, Mitsubishi, Ford, and Lexus – imported under the Carnet de Passage facility between 2008 and 2012. This temporary import scheme allows duty-free entry for foreign vehicles, typically for travel or official use.
These high-end cars have been put up for auction at least eight times since 2016, with reserve prices set exorbitantly high, some as much as Tk4.3 crore per vehicle. In the last auction in 2022, the total reserve price for these vehicles was Tk180 crore, yet bids amounted to only Tk17 crore. It took a special order from the relevant ministry to finally sell them, with some Mercedes models fetching as low as Tk9.35 lakh.
Another recent example vividly illustrates how sky-high reserve prices create an auction deadlock: some 30 duty-free SUVs (Land Cruiser ZX, 3346cc, model year 2024), imported by lawmakers of the ousted Awami League government. After the government's fall on 5 August 2024, most of these vehicles remained unclaimed. Customs put 24 of them up for online auction in January this year, but had to suspend the process due to exceptionally low bids.
The cost of exorbitant valuations
Each of these Land Cruiser SUVs was imported from Japan at a cost of Tk1.1 crore. However, the Custom House set the reserve value at over Tk9.67 crore, applying the National Board of Revenue's (NBR) fixed duty rate of 826% on the import price.
"If the Custom House sets such sky-high reserve value, not a single car will sell even in 100 auctions," asserted Md Habib Ullah Dawn, former president of the Bangladesh Reconditioned Vehicles Importers and Dealers Association (Barvida).
"A reconditioned Land Cruiser ZX – two to three years old – typically sells for Tk4 crore to Tk5 crore in Bangladesh. These MPs' cars came duty-free, so the government loses nothing by clearing them. If the customs duty were recalculated at a lower rate, the cars could sell quickly," he told The Business Standard.
Some of these SUVs attracted bids as low as Tk1 lakh, though one even saw a bid as high as Tk3.10 crore. Yet, Customs did not sell it due to regulations. As SM Arif, the businessman who placed the Tk3.10 crore bid, explained, "Since my offer didn't meet 60% of the reserve price, the car wasn't sold. Customs returned my 10% deposit of Tk31 lakh two months later." Customs law stipulates that a sale in the first auction can only proceed if a bidder offers at least 60% of the reserve price.
Traders involved in the auction process allege that Customs repeatedly re-auctions the same vehicles without lowering the initial assessed reserve value, leading to persistent failures to sell. Despite Customs law stating that a higher bid in a second auction must finalise the sale, a second auction for these MP-imported luxury cars is still pending NBR's decision. KM Corporation, the private operator managing Chattogram Custom House's auctions, notes that each auction costs over Tk300,000 for newspaper advertisements, logistics, and staff.
Calls for reform amidst allegations
Zia Habib Ahasan, a Supreme Court lawyer and secretary general of the Bangladesh Human Rights Foundation, urged reform. "If an auction fails, steps should be taken to sell the auctionable goods through negotiation. A tripartite agreement involving Customs, the importer, and the buyer could help secure a better price for the goods." He added, "Letting national assets and revenue go to waste without auctioning them is an outdated practice. The auction process should be reformed by following models from developed countries and incorporating expert opinions."
Customs officials acknowledge a provision to sell cars at lower prices in a second auction, but express fear of exploitation by "bidder syndicates" who intentionally place low bids in the first round. However, they provided no proof of how online auctions could be manipulated or why a vehicle wasn't sold despite a Tk3.5 crore bid.
Sakib Hossain, assistant commissioner of the Chattogram Custom House's Auction Department, told TBS, "We are waiting for instructions from the NBR on setting a realistic minimum price for the vehicles. Once that's received, the 24 cars will be re-auctioned, along with six more that were not listed in the first auction." Md Moazzem Hossain, NBR member (Customs, Export, Bond, and IT), confirmed, "The second auction is pending. We are exploring alternatives to set fair minimum prices."
Mohammad Yakub, general secretary of the Auctioneers Welfare Association, outright rejected the claim of a bidder syndicate, emphasising that online auctions allow anyone from anywhere to bid. "The brand-new SUVs imported by former MPs have already become old, and no one would pay over Tk2.5-3 crore for them since similar reconditioned vehicles are available for that price. Unless prices are set realistically, these vehicles will decay further," he warned. Bidders accuse Chattogram Custom House of creating hurdles that could lead to these duty-free vehicles being scrapped as they deteriorate and become unsellable.
Port gridlock and unpaid dues
Meanwhile, the rigid auction policies have caused a severe pile-up of unsold goods at Chattogram Port, with 10,032 TEUs (twenty-foot equivalent units) of containers now stuck in limbo. Port officials report that these containers occupy a staggering 19% of the port's total 53,518 TEU capacity, severely disrupting operations.
The Chattogram Port Authority raised this issue in a joint meeting with Customs on 1 June, formally requesting the NBR to relocate these containers to off-dock facilities to ease congestion. Compounding the problem, Customs routinely fails to pay port charges for sold goods, despite repeated requests. As of now, the Chattogram Custom House owes the port Tk142.72 crore in unpaid auction-related fees, with the Port Authority having sent at least 59 letters seeking payment since November 2011.
Advocate Akhtar Kabir Chowdhury, president of Transparency International Bangladesh (TIB)'s Chattogram chapter, lambasted the mismanagement, noting the irony that while foreign reserves are depleted through import payments, valuable goods, including vehicles, are left to decay at the port due to bureaucratic delays. He called for urgent legal reforms to ensure the timely disposal of auctionable goods and accountability for officials responsible for such gross wastage.
