A visionary plan has been drawn to modernise the fleet of state-owned Bangladesh Shipping Corporation, which has been running at a loss for decades, its managing director said.

Commodore Moqsumul Quader said the age-old ships that are no longer economically viable would be sold to make way for modern ships for the corporation and meet all the requirements of International Maritime Organisation.

After the corporation was formed in 1972, a number of ships were bought and the BSC had in its ownership a total of 32 ships, he said.

However, being plagued by continuous losses over the last two decades, no new ships were bought since 1991 and the average age of a ship is about 28 years. The number of ships in its fleet is 13 now.

Quader said the strict regulations imposed by the IMO do not allow the shipping corporation to operate throughout the world, especially in the developed countries and the Middle East.

“Despite these impediments, our ships are operating regionally, in particular, in India, Myanmar and China and also in Qatar in the Middle East.”

When asked why no ships were added to the fleet since 1991, Quader said although the BSC is a state-owned entity, it is self-financed and capital constraint was the main reason behind the delay.

He also said when the new management took over in 2010, only five ships were operational. All the 13 ships were repaired and operated during the last three years.

Since 2009 world recession had its adverse impact on the shipping industry and all the shipping lines had to suffer, and the BSC was no exception, he added.

Small and medium shipping lines were the most vulnerable and many of these had to close down. In this backdrop, the BSC could bring its books out of the red during the last three years, for the first time.

With expenditure in all sectors escalating, especially maintenance, wages and salaries and fuel costs, the old ships are becoming more expensive to operate, Quader said.

“We have now decided to sell out all the ships that are not economically viable.”

The fixed operating cost of a ship whether “it is in the jetty, in the Bay of Bengal or in the Atlantic” is $5,000 per day.

The BSC has now decided to sell five ships that were built in the 1980s and it is expected that these ships will fetch around Tk 8 crore to Tk 10 crore each.

The remaining eight ships would continue to operate until the new ships are procured, but if these cannot be run at a profit, these would have to be disposed off as well, he added.

The BSC plans to have at least twenty modern, latest technology-equipped ships by 2020 and once again become one of the leading shipping lines in the region, he said.

In 2011, the shipping corporation had offloaded some of its shares through repeat public offer and this added Tk 313 crore to its capital.

The corporation has now begun the process of acquiring a ‘product oil tanker’ using its own funds. The tanker would have a capacity to carry 40,000 tonnes costing around Tk 120 crore.

“The tender was opened on July 24 and it is expected to be in BSC’s fleet by September,” Quader said.

The government’s public procurement rules often hinder the ‘quick process’ of acquiring new ships, he said. The BSC has now entered into a joint venture to get a mother tanker with a capacity in excess of 100,000 tonnes costing around Tk 300 crore.

“This would facilitate transportation of crude oil for Bangladesh Petroleum Corporation.”

The mother tanker is expected to join the fleet by November, he added.

In the long-term, the BSC, under a government-to-government soft loan agreement with China, is heading to have six more ships — three product carriers and three bulk carriers — to be built by Chinese shipbuilders.

“We hope to sign the final agreement within the next few months and get delivery within 18 months of signing.”

The BSC must have a good and efficient fleet, able to serve the nation, and at the same time become a profit-making entity, he said.

Quader said he would like to see the BSC being able to meet the emergency requirements of the nation and also contribute to the maritime sector by producing skilled manpower.