BSCIC suffers Tk 25cr losses for dues

The BSCIC suffered a loss of Tk 25.32 crore in 2018-2019 and 2019-2020 as it did not realise dues related to service charges and lease money from a number of plot owners in several industrial estates, according to an audit report.

The Office of the Comptroller and Auditor General of Bangladesh (CAG) found 12 counts of financial irregularities and violations of rules during the audit at various industrial estates owned by the Bangladesh Small and Cottage Industries Corporation (BSCIC) during the two years.

The report showed the agency incurred a loss of Tk 9.50 crore as it did not collect service charges from several plot owners in the API Industrial Park in Munshiganj and the Savar Tannery Industrial Estate.

In its response, the BSCIC said that the owners of the industrial units applied to the industries minister, seeking a waiver of service charge amounting to Tk 7.08 crore.

The Office of the Comptroller and Auditor General of Bangladesh found 12 counts of financial irregularities and violations of rules during the audit at various industrial estates owned by BSCIC

The application is currently under process. Steps will be taken to collect the service charges after getting instructions from the ministry, the agency told the auditors.

The report, however, describes the response from the BSCIC as "not being helpful" for resolving the objections since the service charge has remained unpaid for a long time.

Set up in 1960, the corporation works to develop industrial plots equipped with utility connections and connectivity to spur industrialisation.

Currently, about 4,570 factories are in operation in more than 80 estates across the country with total investments amounting to Tk 63,318 crore.

The audit report said the BSCIC witnessed a loss of Tk 1.11 crore in the two fiscal years as a number of plots at the Savar Tannery Industrial Estate were left unused by the companies that got the allotment for a long time in violation of rules.

It lost Tk 8.73 crore in FY20 due to the non-payment of lease money by several plot owners in Naogaon, Panchagarh, Lalmonirhat and Pabna, all under the control of the BSCIC's Rajshahi office.

No steps have been taken to collect the dues or cancel the ownership of the plots, the report said.

As a result, the agency incurred financial losses and the responsibility for these irregularities falls on the officials concerned, the report said.

The BSCIC told the auditors that the lease money would be recovered.

Similarly, the BSCIC suffered a loss of Tk 4.30 crore in FY20 as the service charge was not realised from a number of plot owners in the estates in Panchagarh, Lalmonirhat, Pabna, and Rajshahi.

A financial loss of Tk 23 lakh took place in FY19 and FY20 at the Narsingdi industrial estate expansion project under the head office of the BSCIC as it received less land than it should have despite making full payments for the property.

In Panchagarh, the agency suffered a financial loss of Tk 26 lakh in FY20 as it did not realise lease money and service charge from Bablu Specialised Cold Storage, which was awarded 12 plots.

The plot owner set up a cold storage on seven plots without an approved plan, the report added.

In Pabna, the agency lost Tk 87 lakh in FY20 as allotments of six plots were not cancelled despite unpaid installments of lease money and service charges, it added.

Md Sabdhan Ali, chief audit officer of the BSCIC, said of the 12 audit objections, one was related to a case of fund misappropriation while the rest are related linked to service charges and lease money arrears and the violation of plot allotment rules.

BSCIC's main purpose is to support entrepreneurs. Service charges and lease money are not cleared when entrepreneurs are in trouble in conducting businesses, he said.

However, the dues are later recovered along with the interests, Ali added.