Bus owners in a good spot
Bus operators in Bangladesh are losing Tk 500 crore each day as they have already been off the road as a result of the lockdown, which might turn many owners into loan defaulters as their income has fallen to zero.
Based on the Bangladesh Road Transport Owner Association (BRTOA), around 80,000 buses, including aired-conditioned (AC), non-AC, and minibus, ply different routes.
The Bangladesh Road Transport Authority puts the number at 75,348.
"We don't have any alternative but to check out the government directive to make sure public health safety despite the fact that we are incurring losses," said Moshiur Rahman Ranga, president of the BRTOA.
He fears the owners of buses risk turning into loan defaulters because they will not be in a position to make timely payment of instalments.
The passenger bus segment didn't avail financing beneath the stimulus package despite giving essential service to the general public, he said.
"We wish to request the prime minister to set up relief for the transport workers," he added.
In his view, the owners owe around Tk 10,000 crore to banks in loans, which have been secured against the vehicles. "It is tough to repay the lender loans under these situations."
Bangladesh Bank data showed Tk 33,800 crore in loans were disbursed in different segments of the transport sector within the last fiscal year. Tk 17,100 crore was lent through the July to December period of the existing fiscal year.
"According to your estimate, bus service operators face a earnings loss of around Tk 500 crore per day as a result of lockdown," said Khondaker Enayet Ullah, secretary-general of the BRTOA.
"This loss is a severe challenge for investors. If we can not operate buses, how will we pay the interest of loans and the wages to the drivers and helpers?"
The leader said that they had demanded exemption on the interest of bank loans several times to survive the business enterprise. "But we've not received any cooperation beneath the stimulus package announced by the federal government."
He said there were around 30,000 bus owners, and every person had loans against their vehicles.
"This is a challenging time for the investors in this sector," he said.
In line with the BRTOA, around Tk 22,600 crore has been committed to the bus segment, which includes created around 15 lakh jobs, directly and indirectly.
Mohammed Shahidul Islam, chairman of HNS Group, which operates a bus service, has Tk 30 crore loans and is facing troubles in repaying loan instalments on a monthly basis.
"I have been facing difficulties to remain afloat since the start of the pandemic in March this past year."
Throughout the pandemic, the number of passengers was lower in comparison to regular times, and it was tough to recover the operational cost and earn enough to pay the bank instalment, he said.
The bus service segment incurred a earnings lack of at least Tk 33,000 crore through the pandemic-induced 66-day lockdown this past year, Islam said.
"The sector is providing services to the people, therefore the government should give incentive for the welfare of the people," he said, adding that the passenger bus service segment contributes around 3 % to the gross domestic product.
Abdus Sattar, general manager of Green Line Paribahan, said the engine of the buses gets damaged if they do not operate.
He has Tk 70 crore in loans.
The central bank has deferred the instalment payment for 90 days, giving little relief to the borrowers, he admitted, however.
Green Line has 150 buses that operate in various routes of the country and employs 1,200 people.
Monzur Hossain, research director of the Bangladesh Institute of Development Studies, said there is a opportunity that the borrowers might become loan defaulters as a result of lockdown as their income has fallen to zero.
Considering the situation, the central bank should extend the loan moratorium period for at least half a year, he said.
Md Serazul Islam, a spokesperson of Bangladesh Bank, said the transport industry falls beneath the service sector, so they could borrow from banks under the stimulus package.
In March last year, the federal government unveiled a Tk 33,000 crore package for large industries and the service sector. In October, the volume of the package was enhanced by Tk 7,000 crore to Tk 40,000 crore.
All sectors meet the criteria to avail of the benefit under the stimulus package, the central banker said, adding that nobody would receive funds without meeting the criteria.
