CAAB to spend Tk 700cr despite proposal to install free of cost

Staff Reporter :
The Civil Aviation Authority of Bangladesh (CAAB) has taken a billing software project — Automated Revenue Management System (ARMS) — as the government wants to develop the airport in line with global modernization and increasing aeronautical revenues.
Though the CAAB has received a proposal to develop the billing software system free of cost from a local private organization, the CAAB is in the process to implement the project for 10 years at a cost of over Tk 700 crore ignoring the private company proposal, according to sources in the Ministry of Civil Aviation and Tourism (MOCAT) and CAAB.
According to multiple sources, CAAB has been collecting revenue manually with its own manpower through air traffic controllers since its inception in this modern era when the global airports are modernized with latest equipments.
The numbers of local and international aircrafts have been increased and operating them using Bangladesh’s airspace, sources said, adding that it is taking long time to generate and send manual bills.
As per last year financial report, the state-owned organization is owed more than Tk 5,000 crore from various airlines and the CAAB’s total annual revenue earning stands at Tk 1,700 crore at this moment, sources said.
According to CAAB sources, it is going to implement the project to modernize the automation system in the shortest possible time.
Despite having CAAB’s own manpower and without utilizing them, the authority is in the process of introducing automation (billing software) system through private institutions which raised question in the CAAB, sources said.
A decision was taken to implement the Automated Revenue Management System (ARMS) project in the board meeting of CAAB in October last year highlighting the limitations of the manual method, ministry sources said.
Meanwhile, country’s non-governmental organization (The City Bank Ltd.) has proposed to develop the ARMS project free of cost, but CAAB did not accept their free proposal, which could save Tk 700 crore of the public funds.
Ignoring the free proposal, CAAB has forcefully called for tender where five companies have shown their interest in implementing the project. Among them, three companies have also provided budget proposals too, sources said.
According to the project information, a private company/bidder will be given the job for 10 years to generate revenue through automation as per CAAB’s plan. If project is given to the implementing agency/organization, a 5% fee of CAAB’s current income shall be paid to the contractor and CAAB will have to spend Tk 700 crore in this regard.
The complaint letter which was sent to the Prime Minister’s office recently stated that two directors from CAAB and some other officials are planning to wastage this money by completely misleading the government in the name of “automation” and they are also going to implement the plan by handing over the system to a foreign company to take the money abroad (out of Bangladesh) into the pockets of dishonest officials, sources said.
An official from The City Bank Tahsin Haque said that they have proposed CAAB to set up revenue management automation free of cost and they have also conducted several meetings with CAAB.
 He said that The City Bank is also working with foreign specialists/organization in this field with proven experience for the support in all technical areas of the project.
The City Bank is keen to work with the government to ensure that there are no technical complications and that the country’s money remains in the country, he added.
State Minister for Civil Aviation and Tourism Md Mahbub Ali told this correspondent that the automation system will be developed very soon to increase the revenue of civil aviation and make it more modern. For this, various companies have also submitted their proposals, which are being considered by CAAB, he added.
Chairman of Civil Aviation Authority of Bangladesh Air Vice Marshal Md. Mofidur Rahman told this correspondent, “Automation is the need of the hour, which must be done. We will do it through the institution that is best to do it while maintaining transparency and accountability.”
Regarding the proposal of the local organization to implement the project free of cost, the CAAB chairman said, “After studying their proposal, we felt that they cannot give us what we want. They are also not able to guarantee the revenue. Apart from it, all the money has to come through them as per their terms and conditions. We have to tell our customers to deposit the money through City Bank which could risky for us.”
Air Vice Marshal Md Mofidur Rahman also said, “There are some international wire houses where the money will be deposited and who will take responsibility for the entire amount.”
Considering the reality, “Airlines are responsible to the International Air Transport Association (IATA) and they can take our money, so we (CAAB) don’t have any risk,” he added
CAAB Chairman also said that the automation project is being conducted maintaining with 100% transparency and accountability. For which this work will be done through a company with at least 5 years of experience. Authority is not in favor of giving this job to any company which has no previous experience, the CAAB Chairman said.
In the meantime, we have information from IATA in this regard and found out that IATA does not give any kind of guarantee for collection and disbursement, he said and added “IATA also states that they can collect fees from the IATA member airlines only.”
Sources said, many of the airlines operating in Bangladesh are not the members of IATA. Moreover, the IATA or any other organization will not be giving liquid cash to CAAB. Such large sums of money can only be transferred through a local bank. It is also understood that IATA will not pay CAAB on daily basis.
In addition, if any company collects fees on behalf of CAAB, then the question will raise how they will be deposited in the fund of IATA (assuming abroad), the sources added.
Moreover, it is not clear whether this fund of IATA will be deposited in Bangladesh or outside of the country, according to multiple sources sources.