After a span of five years, state-owned enterprises jointly incurred a loss in the outgoing fiscal year largely because of Bangladesh Power Development Board’s (BPDB) higher use of subsidy.
The government takes into account estimates of losses and profits made by 49 state-owned enterprises in a year before calculating the final outcome. In the outgoing fiscal of 2018-19, the combined loss came at Tk 4,325 crore.
The data came in the draft of the Bangladesh Economic Review 2019, an annual publication of the finance ministry which will be released today alongside the documents of the upcoming fiscal year’s budget.
Since 2013-14, the enterprises had been, in the overall sense, making a profit and it was Tk 9,295 crore in the last fiscal year.
But the scenario has been the opposite when it came to BPDB for it incurred losses in almost every year for the last 10 years, with the end figure being nearly double than what was at the start.
In 2018-19, BPDB incurred the highest loss of Tk 10,271 crore, among the enterprises. It was Tk 9,284 crore in the previous fiscal year.
Responsible for buying and distributing electricity, BPDB incurs the losses when using subsidies to offset prices paid to private and public power generating companies in order to ensure lower prices for consumers.
“We produced more electricity and we bought more electricity and finally we paid more subsidy to the companies. This is the main reason for incurring losses,” a senior BPDB official told The Daily Star over the phone yesterday.
Another enterprise whose losses nearly doubled in the outgoing fiscal year is Bangladesh Jute Mills Corporation (BJMC).
The losses amounted to Tk 695 crore this year whereas it was Tk 497 crore in the year before. BJMC reasons that it had to pay wages to workers.
The Bangladesh Telecommunication Regulatory Commission (BTRC) saw a drastic drop in profit in 2018-19 to Tk 2,548 crore from the previous fiscal’s Tk 6,262 crore.
A BTRC official said 2017-18’s profit jump came from 4G spectrum sales, bringing in some Tk 5,000 crore.
One more enterprise witnessing such a profit drop is Bangladesh Petroleum Corporation (BPC). In 2018-19, BPC made a profit of Tk 1,944.73 crore, down from Tk 2,548 crore a year ago.
The drop in the profit ratio occurred amidst a hike in prices of petroleum products in international markets, while BPC remained dormant when it came to adjusting domestic prices.
The corporation had been incurring losses for many years for failing to make such tweaks but encountered profits in the last two years on remaining nonchalant to a decline in international prices.
In 2015-16, BPC made its highest profit of Tk 9,040 crore. It was Tk 8,653 crore in the following year.
Since 2017-18, the profit margin started to decline and the trend continued in the outgoing fiscal year.