Launch industry seeks govt help to avoid sinking

The launch industry, valued at approximately Tk2,100 crore, is struggling to stay afloat due to a combination of factors, including a decrease in passengers and a lack of government support. 

Once a preferred mode of transportation, launches lost their appeal after the opening of the Padma Bridge. This, coupled with mismanagement at Sadarghat, the main passenger terminal in Dhaka, has worsened the situation.

The recent hike in fuel prices has further burdened the businesses, leading to financial losses, making owners plead for assistance to prevent the industry's collapse.

Industry players are asking for exemptions from the 10% Value Added Tax on AC cabin fares, exclusion of wharf leases, and improved access to Sadarghat to attract passengers.

Bangladesh Inland Waterways Passenger Carrier Association (BIWPCA) Senior Vice President Badiuzzaman Badal said, "We are becoming destitute. If the government does not support the launch industry, this sector, which significantly contributes to the economy, will be destroyed, and thousands of workers will lose their jobs."

Before the current difficulties, about 650 vessels operated in Bangladesh's inland waterways, including 220 of the largest and most luxurious vessels serving routes from Dhaka to the southern parts of the country.

However, due to ongoing financial losses, owners of 238 vessels, including 35 of the largest ones, have had to scrap their vessels. Now, only 412 passenger vessels remain in operation, with 185 in the largest category.

The financial investment for each vessel is substantial, averaging Tk10 crore for larger vessels and Tk1 crore for smaller ones. The total investment in the sector is now around Tk2,100 crore, posing a significant risk to stakeholders.

At a recent meeting of the advisory committee of the National Board of Revenue (NBR), Mahbub Uddin Ahmed, president of BIWPCA, highlighted the challenges faced by the industry, saying, "Due to the passenger crisis, it is becoming impossible for us to meet fuel costs.

"Our labour costs are rising daily. In this situation, I believe this sector will soon become extinct. I request an exit policy for us."

BIWPCA Secretary General Siddiqur Rahman Patwary added, "We demand to make Sadarghat traffic-free. The government should relocate the hawkers and connect Sadarghat by flyover or metro rail to enable Dhaka residents to reach it quickly."

Proposal submitted to NBR

Meanwhile, the launch owners' association has submitted a written proposal to the NBR chairman, requesting benefits in the next fiscal year's budget. The Business Standard has obtained a copy of the proposal.

The proposal highlights that the government-fixed fare for a single cabin on the Dhaka-Barisal waterway is Tk1,636, which rises to Tk1,800 with 10% VAT.

In contrast, luxury bus fares for the same route are Tk1,200, with buses running every 30 minutes, leading to empty cabins on the launches as more passengers choose buses.

The letter states that there is no need for AC during winter, and AC is not used on some passenger vessels from November to February. Despite this, the NBR has not provided any VAT exemption during these four months.

The letter also points out that since the Padma Bridge opened, a severe passenger crisis has reduced the number of operating launches from 120 to 50-55, with only 5-6 trips per month instead of daily trips.

Traffic congestion from Gulistan to Sadarghat prevents passengers from reaching the launches on time, further decreasing passenger numbers.

Additionally, the letter notes that the fuel price hike of Tk34 per litre in August 2022 has severely impacted the launch business, with fuel costs comprising 80% of operating expenses.

This has increased operating costs more than tenfold, resulting in launch staff salaries and allowances being in arrears for 2-3 months due to the lack of passengers.

In light of this situation, there is a demand to waive VAT on AC cabin fares and reduce the tax on passenger vessels to keep the sector alive.

BIWPCA President Mahbub Uddin Ahmed said, "Currently, we are taxed in two ways. We pay VAT of Tk125 per passenger per year for vessels up to 10 years old, and Tk100 per passenger for vessels over 10 years old.

"We request that VAT be reduced to Tk75 instead of Tk125, and Tk50 per passenger instead of Tk100."

Additionally, the owners have requested the construction of a metro rail or flyover to Sadarghat in Dhaka and the cleaning of the road from Gulistan to Sadarghat.

The passenger shortage has resulted in the closure of several routes.

Four out of eleven routes between Dhaka and Barisal are temporarily suspended, and five out of six routes in Patuakhali are completely shut down. Even the remaining operational routes struggle to cover daily expenses, launch owners said.

On the Dhaka-Barisal route, a rotation system has been implemented, with vessels operating only one trip every four days. This has made it difficult for them to afford fuel costs or pay staff salaries.

Nizam Uddin, owner of the Adventure Launch on the Barishal-Dhaka route, said, "The waterway sector is on the brink of extinction since the Padma Bridge was built. Many routes have closed, and every owner is facing losses.

"While passengers increase during Eid-ul-Fitr and Eid-ul-Azha, this income is insufficient to sustain operations throughout the year. Government assistance is crucial to save this sector."

Passenger traffic from Dhaka has plummeted by 60% since the Padma Bridge opened, according to Bangladesh Inland Water Transport Authority data.

In May 2022, 3.51 lakh passengers used water transport from Sadarghat, Dhaka. However, after the Padma Bridge opening in June, only 2.77 lakh passengers were recorded, marking a continuous decline.

By May 2023, it fell to 1.54 lakh passengers, and as of March this year, it dropped further to 1.39 lakh.

The suspension of launch operations on various routes has significantly impacted passengers and businessmen. They are now compelled to use roads, leading to increased transportation costs for goods from Dhaka to the southern region, subsequently affecting the prices of essential goods.