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Bangladesh Parjatan Corporation (BPC) continues making big investments in new ventures, although most of its existing commercial units are incurring losses.
The corporation is now implementing hotel and motel projects at Hatia, Nijhum Dweep, Anwara Parky, Shyamnagar in Satkhira, Ratargul, Sherpur, Birishiri and many other places.
Of them, the Anwara Parky project is being executed at a cost of Tk 660 million while the Hatia project that includes construction of restaurant, a rest house and a recreation centre has an estimated cost of Tk 500 million and the Nijhum Dweep project is also costing the BPC over Tk 500 million.
Now 48 commercial entities are run by the BPC, of which 22 are hotels and motels. The rest are training institutes, picnic spots, duty-free shops, restaurants and bars.
Most of the hotels and motels belonging to the BPC are loss-making entities.
In the fiscal year 2018-19, the corporation earned revenues worth only Tk 1.13 billion. A total of 46 entities under its control incurred a loss of Tk 0.91 million during that year.
The government allocates Annual Development Programme (ADP) funds for construction of infrastructure under the BPC, although the corporation is run with its own income.
BPC hardly records better performance in running its commercial units profitably while sometimes they use bad business as an excuse.
Talking to the FE, BPC chairman Ram Chandra Saha said that the financial situation of the commercial units of the corporation is average, although some commercial units which are small are incurring losses.
New investments are made only after a feasibility study is conducted as per the government rules, he added.
"The financial situation of the commercial units is at break-even point. We are meeting our expenditure with our income. We have appointed consultants to conduct a study to ascertain why some of the units were making losses," he said.
"We are not saying that BPC commercial units will run at losses. We will continue investment only based on suggestion of the consultants with a target not to incur loss," he said.
Regarding the aim of making limited profit, Mr Ram Chandra said that profit is not the only target of BPC. The corporation has to invest at different places to show private sector investors how to promote tourism and uplift the life of that community, he added.
Meanwhile, the BPC has given Tk 33 million to the deputy commissioner of Sylhet to create primary infrastructure at Ratargul, Bicchhanakandi and Jaflong.
A feasibility study is being conducted on these tourist spots to construct modern resorts to attract more tourists.
In FY 2018-19, Bangladesh Tourism Board (BTB) gave Tk 13 million to the DC of Habiganj for development of Panchhori eco resort at Chunarughat and creating other facilities on the spot.
There is no specific data on the amount of investment BPC made in various infrastructure projects. But the cumulative amount was approximately Tk 3.0 billion over the past 10 years.
Experts wondered whether a loss-making corporation should invest this way in hotels and motels with the philosophy of public welfare like a charitable organisation.
Kazi Wahidul Alam, editor of the fortnightly magazine Bangladesh Monitor, told the FE that if there was no return on investment (ROI), then the BPC should not invest the public money.
"Commercial entities should be run as commercial entities and not like an NGO or a charitable organisation. They must have a profit target to make the commercial units viable," he said.
Mr Wahid noted that the commercial entities having a huge potential showed poor performance due to mismanagement and lack of planning by the BPC authority.
If the government has to provide subsidy for them, they should not make further investment in new ventures. Involvement of the private sector may make those loss-making entities viable, he added.
When asked, Planning Minister MA Mannan told the FE that the government finances BPC projects just to support a large number of employees there and to sustain the government property. There was never a strong and acceptable management in the corporation and it was plagued by corruption, he added.
"There was mismanagement in the corporation from the very beginning. Although the situation has improved, overall management has not rectified," said the minister. The BPC has deviated from the main principle of business which is profit, he added. "There cannot be anything like doing welfare by BPC. Because they will provide service to the tourists on receiving money. Their job is not kindness rather it is service delivery," Mr Mannan said.