Tender violations turn bidders away from Bangladesh Biman Airline
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Tender violations turn bidders away from Bangladesh Biman Airline
Tender violations turn bidders away from Bangladesh Biman Airline
Monday December 13 2004 00:05:16 AM BDT
M Abdur Rahim
International aircraft makers and aviation equipment suppliers are increasingly turning their back on Biman Bangladesh Airlines, as it cancels procurement tenders at will and frequently violates globally accepted practices in the tender process.
Tenders are postponed or cancelled if the commission bidders offer Biman high-ups is not to their liking. The highest offer of commission, not the lowest or highest quotation, determines who wins a tender, according to sources.
The commission issue has surfaced once again recently when Biman moved to revive an international tender cancelled last year. Sources said Biman recently asked the previous participants in the ATR 72-500 or Dash 8-Q400 procurement tender to redeposit earnest money.
A source alleged that Biman suddenly revived the tender as the high-ups have settled the commission issue with Bombardier Aerospace, the manufacturer of Dash series planes. The Biman board at its meeting on December 12 is going to approve a $67 million tender for purchase of three brand new Dash 8-Q400 -- $20 million more than the ATR offer -- and trade-in of Biman's five old aircraft.
As the practice goes rampant, the national flag-carrier is fast losing its international credibility. Biman found no bidder against a recent tender for purchase of three Airbus 320 or Boeing 737 planes. Biman attached a condition that age of the mid-range planes should not exceed 10 years.
Given the fact that such planes are widely available in world market, the lack of interest from aircraft makers and suppliers in the tender embarrassed the Biman management, sources said.
Sources said Biman previously cancelled a good number of international tenders without citing plausible reasons. On numerous occasions, tenders were whimsically cancelled and earnest money was refunded.
"We have spent two weeks to gather all documents to submit a bid. It takes a lot of time, money and effort to drop the bid in the tender box. We were declared eligible on technical evaluation, but there was no response from Biman. The validity of our offer expired in the meantime. Finally, Biman said the tender had been cancelled," said a local agent of an aircraft maker.
"We have other airlines to do business with. Why should we participate in any future Biman tender?" he asked.
Biman's Managing Director Mahmoodur Rahman, however, defended the airline's procedure in handling tender. "All things are done to ensure a sound financial footing of Biman. It is the right of every organisation to postpone or cancel a tender in its interest," he told The Daily Star on Monday.
On the ATR and Dash issue, the Biman MD said it is the authority of the board to decide about purchase. "The proposals will be placed at the board meeting and it is up to the board to make a decision on purchase," Mahmoodur said.
Asked about the criteria for awarding tender, he said there is no hard and fast rule. "Financial offer is not the only thing (that comes under consideration) in selecting a tender winner. Long-term benefits, maintenance cost and other things are also taken into account," he pointed out.
The ATR and Dash tender was closed on August 21, 2003 where European aircraft consortium Avions de Transport Regional (ATR) quoted $16.9 million for each of the 68-seater ATR 72-500 while Canadian Bombardier quoted $26.66 million for each of its 74-seater Dash 8-Q400. The technical evaluation committee declared the two bidders eligible as suppliers.
After a few months of foot-dragging, the tender was finally postponed and bidders were asked to withdraw the $5,000 in earnest money. After a year's recess, a meeting of Biman's executive directors on November 27, 2004 decided to invite bidders to submit the earnest money and extend validity of earlier tender offer.
Sources said two political pressure groups inside Biman, one headed by a minister and the other backed by a flight engineer with strong connections, are influencing the purchase decisions, which insiders say would push the carrier's losses up.
Aviation experts say although the Dash series has six seats more than ATR, its maintenance cost is much higher than the ATR. The planes will fly on domestic and regional routes where many seats usually remain empty.
The Biman board, however, is highly likely to give its nod to the expensive offer as the pressure group has reached a deal on hefty commission with the local representatives of Bombardier, sources said.
Biman's fleet planning sub-committee itself last year in a report on aircraft replacement found that although ATR 72-500 takes eight minutes more than Dash 8-Q 400 on Dhaka-Chittagong route (124 nautical miles), ATR requires 188 kg less fuel than Dash.
Sources said with jet fuel price on the rise, the Dash's six-seat advantage cannot make up for ATR's 188kg less fuel consumption.
According to ATR comparative study, Dash's maintenance cost is 17 percent higher than ATR, fuel consumption is 20 percent more and operating cost each trip is 40 percent higher than ATR.
According to Pratt Whitney, engine manufacturer of both Dash and ATR, Dash requires 1,661kg fuel for a one-hour flight, 713 kg more than ATR's 948kg.
Monday December 13 2004 00:05:16 AM BDT
M Abdur Rahim
International aircraft makers and aviation equipment suppliers are increasingly turning their back on Biman Bangladesh Airlines, as it cancels procurement tenders at will and frequently violates globally accepted practices in the tender process.
Tenders are postponed or cancelled if the commission bidders offer Biman high-ups is not to their liking. The highest offer of commission, not the lowest or highest quotation, determines who wins a tender, according to sources.
The commission issue has surfaced once again recently when Biman moved to revive an international tender cancelled last year. Sources said Biman recently asked the previous participants in the ATR 72-500 or Dash 8-Q400 procurement tender to redeposit earnest money.
A source alleged that Biman suddenly revived the tender as the high-ups have settled the commission issue with Bombardier Aerospace, the manufacturer of Dash series planes. The Biman board at its meeting on December 12 is going to approve a $67 million tender for purchase of three brand new Dash 8-Q400 -- $20 million more than the ATR offer -- and trade-in of Biman's five old aircraft.
As the practice goes rampant, the national flag-carrier is fast losing its international credibility. Biman found no bidder against a recent tender for purchase of three Airbus 320 or Boeing 737 planes. Biman attached a condition that age of the mid-range planes should not exceed 10 years.
Given the fact that such planes are widely available in world market, the lack of interest from aircraft makers and suppliers in the tender embarrassed the Biman management, sources said.
Sources said Biman previously cancelled a good number of international tenders without citing plausible reasons. On numerous occasions, tenders were whimsically cancelled and earnest money was refunded.
"We have spent two weeks to gather all documents to submit a bid. It takes a lot of time, money and effort to drop the bid in the tender box. We were declared eligible on technical evaluation, but there was no response from Biman. The validity of our offer expired in the meantime. Finally, Biman said the tender had been cancelled," said a local agent of an aircraft maker.
"We have other airlines to do business with. Why should we participate in any future Biman tender?" he asked.
Biman's Managing Director Mahmoodur Rahman, however, defended the airline's procedure in handling tender. "All things are done to ensure a sound financial footing of Biman. It is the right of every organisation to postpone or cancel a tender in its interest," he told The Daily Star on Monday.
On the ATR and Dash issue, the Biman MD said it is the authority of the board to decide about purchase. "The proposals will be placed at the board meeting and it is up to the board to make a decision on purchase," Mahmoodur said.
Asked about the criteria for awarding tender, he said there is no hard and fast rule. "Financial offer is not the only thing (that comes under consideration) in selecting a tender winner. Long-term benefits, maintenance cost and other things are also taken into account," he pointed out.
The ATR and Dash tender was closed on August 21, 2003 where European aircraft consortium Avions de Transport Regional (ATR) quoted $16.9 million for each of the 68-seater ATR 72-500 while Canadian Bombardier quoted $26.66 million for each of its 74-seater Dash 8-Q400. The technical evaluation committee declared the two bidders eligible as suppliers.
After a few months of foot-dragging, the tender was finally postponed and bidders were asked to withdraw the $5,000 in earnest money. After a year's recess, a meeting of Biman's executive directors on November 27, 2004 decided to invite bidders to submit the earnest money and extend validity of earlier tender offer.
Sources said two political pressure groups inside Biman, one headed by a minister and the other backed by a flight engineer with strong connections, are influencing the purchase decisions, which insiders say would push the carrier's losses up.
Aviation experts say although the Dash series has six seats more than ATR, its maintenance cost is much higher than the ATR. The planes will fly on domestic and regional routes where many seats usually remain empty.
The Biman board, however, is highly likely to give its nod to the expensive offer as the pressure group has reached a deal on hefty commission with the local representatives of Bombardier, sources said.
Biman's fleet planning sub-committee itself last year in a report on aircraft replacement found that although ATR 72-500 takes eight minutes more than Dash 8-Q 400 on Dhaka-Chittagong route (124 nautical miles), ATR requires 188 kg less fuel than Dash.
Sources said with jet fuel price on the rise, the Dash's six-seat advantage cannot make up for ATR's 188kg less fuel consumption.
According to ATR comparative study, Dash's maintenance cost is 17 percent higher than ATR, fuel consumption is 20 percent more and operating cost each trip is 40 percent higher than ATR.
According to Pratt Whitney, engine manufacturer of both Dash and ATR, Dash requires 1,661kg fuel for a one-hour flight, 713 kg more than ATR's 948kg.
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I don't get it, but everytime Biman wanted newer equipment, it has been through special tenders that are so complicated and condition them to exchange of their old and ragged planes..
I think this also applies to Air India. I am glad suppliers are catching up to these miserable methods of doing business and realise there are better opportunities elsewhere...
I think this also applies to Air India. I am glad suppliers are catching up to these miserable methods of doing business and realise there are better opportunities elsewhere...
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Tenders
As a Biman employee for the next 36 hours, the answer is very simple.
Tenders are simply at the mercy of whoever offers the 'high-ups' the greatest bribe, baksheesh or gush.
Corruption is endemic within the company and without it in the mechanism used to procure new equipment.
'Losing their credibility', I didn't know they had any left. They have become a laughing stock internationally and I am most relieved to be leaving them.
Management (I use the term loosely) is inept, incompetent and corrupt at just about every level.
If you wish to sell them new equipment be prepared to offer BIG backhanders. With a total of about 16 aircraft in long and short haul, they cannot conceive that they are not BIG players in the international airline business.
The flight engineer with connections is the Prime Minister's brother. There is a cadre within that office that runs everything their way. There are quite a few people afraid to utter a word.
A year ago, I didn't either feel this way or know the reason. I do now and I've refused the Haj to get away from them.
Tenders are simply at the mercy of whoever offers the 'high-ups' the greatest bribe, baksheesh or gush.
Corruption is endemic within the company and without it in the mechanism used to procure new equipment.
'Losing their credibility', I didn't know they had any left. They have become a laughing stock internationally and I am most relieved to be leaving them.
Management (I use the term loosely) is inept, incompetent and corrupt at just about every level.
If you wish to sell them new equipment be prepared to offer BIG backhanders. With a total of about 16 aircraft in long and short haul, they cannot conceive that they are not BIG players in the international airline business.
The flight engineer with connections is the Prime Minister's brother. There is a cadre within that office that runs everything their way. There are quite a few people afraid to utter a word.
A year ago, I didn't either feel this way or know the reason. I do now and I've refused the Haj to get away from them.
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The point IS that they think they are so SPECIAL.
It's sordid, it's seedy and they are most welcome to it.
I'm just glad to be away from it and not feeling as if I need to shower.
In Bangladesh these guys live like kings - they are RICH.
Yet they feel that they are hard done by - it's quite nauseating.
It's sordid, it's seedy and they are most welcome to it.
I'm just glad to be away from it and not feeling as if I need to shower.
In Bangladesh these guys live like kings - they are RICH.
Yet they feel that they are hard done by - it's quite nauseating.
