Bangladesh News

Bangladesh Navy is procuring Tk 1.5 crore worth of spare parts for its six high-speed boats for an exorbitant Tk 6.19 crore violating rules and bypassing the director general of defence purchase (DGDP), sources said.
On November 5, based on a restricted tender the Naval Store Sub-Depot (NSSD) issued three separate work orders for spares for these speedboats. Two of these work orders worth Tk 2.66 crore and Tk 3.42 crore were issued to one firm — AJA International — and the other worth of Tk 11 lakh to a firm — Habib Enterprise.

Interestingly, this supply will be delivered to Bangladeshi peacekeeping mission in Sudan, and not in Bangladesh. The Bangladeshi peacekeepers there are using these boats purchased in 2005 only for Tk 8.5 crore. The boats were delivered in Bangladesh.

Sources said while the price of Tk 6.19 crore itself is highly inflated, it includes import duty and taxes to be payable to Bangladesh. But these will not be paid to Bangladesh as the goods will be delivered in Sudan this month and in January.

Navy sources said actual price of the spare parts would be Tk 1.5 crore, and even if taxes are included, the price would be around Tk 4 crore.

The deal was pushed by a relative of the immediate past prime minister along with a former political appointee of the Prime Minister’s Office (PMO).

One of the in the deal includes a former official of the PMO during the Awami League (AL) rule. He was included as a ‘future strategy’. In case the AL returns to power in the next elections and starts punishing those involved in corruption in naval procurements, he would ’save’ them. The suppliers who were given the job do not include names of any of these beneficiaries.

Sources said the procurement process is a gross violation of defence rules that demand purchases through the DGDP. The navy authorities are buying these parts directly without holding any open tender despite such high cost involvement.

An official of Bangladesh Navy, requesting anonymity, said, “Among the defence forcers, only the navy can procure anything directly.”

But DGDP sources contradicted him saying that in case of emergency, the naval base station can procure goods worth Tk 2 lakh directly and the navy chief can buy goods worth Tk 2 crore directly through an open tender. Anything worth above this sum have to be procured through the DGDP or other higher authorities. Procurement on non-emergency basis should also be processed through the DGDP.

Again, in emergency, the navy can also purchase equipment or spares valued beyond Tk 2 crore without the DGDP’s involvement. But in that case, it will have to buy those only from the original manufacturer through the Bangladesh embassy concerned with approval from the principal staff officer (PSO) of the Armed Forces Division (AFD) or the minister concerned.

None of these procurement rules was followed in this case.

When these rules were brought to the notice of navy official concerned, he expressed his ignorance about these.

The deal was initiated in May this year as an “emergency procurement”. But the “emergency” procurement followed two rounds of restricted tender floating and killing of more than six months time. Sources said both the tenders were notified in the naval headquarters blackboards but not in any newspaper or other mass media. The first tender gave seven days time to submit proposal and the second only three days.

The first tender was based on the navy chief’s approval to procure spares worth Tk 70 lakh. This restricted tender was cancelled without any explicit reasons. The navy then floated the second tender in August and amid the chaotic political situation, hurriedly issued the work order this month.

“If the navy could afford to wait for six months to issue its urgent work order, it could have done the same through the DGDP and get the best transparent deal,” noted a navy source.

It is not clear why the NSSD issued two separate orders to the AJA International when one was sufficient, sources said. One work order asks the supplier to deliver spares worth Tk 2.66 crore by November 27 and the other worth Tk 3.42 crore by January 5. Habib Enerprise has been asked to deliver goods worth Tk 11 lakh by November 26.

The sources pointed out that prices of the spares were highly inflated in the work orders. For instance, a “socket for cockpit” for this of speedboat is sold at euro 26 (Tk 2288) by its manufacturer. But the work order priced it at Tk 26,000 each. A gasket worth euro 20 (Tk 1,760) has been priced at a staggering Tk 8.32 lakh each. Different types of rubber tubes have been priced between Tk 2,000 and Tk 6,760 each while these are sold at prices below euro 20 (Tk 1,760) each.

A ring drive (complete assembly) is sold by the manufacturer at 2,000 euros (Tk 17,600) but the work order priced it at Tk 24.34 lakh.

A 12-volt battery has been astonishingly priced at Tk 28,000 and alternator battery charger at Tk 2.59 lakh.

Again there are inconsistencies in the pricing of same things in two work orders. For instance, Habib Enerprise was given an order for merely three types of spares. The first is rubber pipe, number 2,13,02,688. Here the unit price of each of these pipes were estimated at Tk 19,700. But in the work order for AJA International, ‘rubber hose’, number 2,13,02,488 (which is the same) has been priced at Tk 6,760 each.

Moreover, both Habib and AJA were separately ordered to supply lub oil pipe (three each).

The other order to AJA International actually asks for full engines and propeller. Navy sources said engine is not a spare part but a major component. Again, price of the engine is around 15,000 euros (Tk 13..2 lakh) each but the work order priced it at Tk 50 lakh. The euro 2,000 propeller was given a price tag of Tk 7 lakh.

Back in July, the same business lobby made the navy seek approval for procuring six high-speed boats at a higher cost of Tk 14.5 crore. Following objections by the comptroller general of audit against this purchase and reports in The Daily Star, the PMO rejected the bid and asked the navy to re-tender the procurement.