Bangladesh Services continues to manage BICC despite the end of the agreement

BSL to manage Bangabandhu International Conference Center for only 20% of revenues

August 17, 2022, 10:35 p.m.

Last modification: August 17, 2022, 11:07 p.m.

Infographic: TBS


Infographic: TBS

Despite the completion of the lease term and non-payment of its dues, Bangladesh Services Ltd (BSL) operates the Bangabandhu International Conference Center (BICC).

BSL owes Tk 391 crore as rent to the Public Works Department (PWD) – owner of BICC – who sent a letter to the Ministry of Housing and Works in June this year recommending not to renew the contract with the BSL and to demand the contributions before the end of the rental 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 would continue to manage the BICC until a tender process in this regard is completed.

As a result, the BSL – a public company – has to manage the BICC for only 20% of the revenue generated by the BICC, while the PWD will receive the remaining 80%.

Under the 10-year contract signed with the PWD in 2012, the BSL received 100% of the revenue generated from the management of the BICC.

Sources said revenue generated by BSL – a listed company – will decrease due to the new arrangement.

BSL chief executive Md Atiqur Rahaman told The Business Standard: “There has been no decision on a new deal or an extension of the old one. Bangladesh Services Ltd is still in charge of the BICC. It will continue to operate the conference center until a new tender is awarded in this regard.”

According to PWD sources, BSL paid full rent for the first three years and partial rent for the fourth year after taking the lease from BICC in 2012, but after that it did not pay a single penny. for more than six years.

So far, BSL has paid Tk 117.50 crore to PWD.

BSL sources said that after taking the lease, the company was earning well from BICC, but then declined. Due to the Covid-19 pandemic, the convention center’s revenue has dropped significantly, increasing the losses.

According to BSL’s financial reports, the company earned well from BICC until the pandemic hit the country, but it was unable to break even at which expenses and revenue are equal.

From FY17 to FY21, BSL earned around Tk 161 crore from BICC management.

The company recorded a total loss of Tk92 crore in the financial years 2017, 2018, 2019 and 21. In the financial year 2020, the company recorded a profit of Tk 4.75 crore.

Bangladesh Services Limited was listed on the capital market in 1984.

It operates the InterContinental Dhaka, the country’s first five-star hotel.

BSL also operates the Balaka Executive Lounge at Hazrat Shahjalal International Airport and two other resorts.

In the first three months of FY22, BSL revenue grew to Tk 77.45 crore, an increase of 116% from Tk 36.66 crore in the July-March period of FY22. exercise 21.

Despite the revenue growth, BSL incurred a loss of Tk 74.87 crore during the period, which was lower than the loss of Tk 81.80 crore in the same period of the prior year.

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