To boost income, struggling Parjatan Corp to provide catering services to govt offices

The Cabinet Division has ordered all ministries, divisions and their subordinate offices to avail catering services from the Bangladesh Parjatan Corporation in an effort to help the struggling national tourism organisation increase its revenue.

The order was issued on 26 May in response to the corporation's request that they be allowed to supply food for national day celebrations, as well as for meetings, seminars, workshops, and symposiums held in those offices.

Earlier on 23 April, the corporation requested the tourism ministry to communicate with the Cabinet Division in order to issue such an order to boost its income.

AKM Aftab Hossain Pramanik, secretary of the corporation, told The Business Standard that Parjatan hotels, motels, and restaurants have long been supplying food to Ganabhaban, Ecnec, and Cabinet Committee meetings. 

"This recent letter ensures that the Cabinet Division endorses the corporation's supply of food to other government offices," he said, adding that several others have ordered catering services from the corporation following the order.

Pramanik mentioned that the Election Commission, University Grants Commission, and Ministry of Education recently used Parjatan services for events such as meetings, talent search, and training workshops. 

"Many other organisations have also reached out," he added 

According to the Parjatan Corporation's website, the organisation operates 51 hotels, motels, restaurants, and bars nationwide. Of these, 35 are managed directly by the corporation, while 16 are leased out.

Parjatan's losses

According to the Parjatan Corporation's June meeting minutes, the organisation aimed for Tk12.68 crore in revenue for May but earned only Tk11.87 crore. In May, its expenses totalled Tk15.11 crore, resulting in a net loss of Tk3.24 crore.

Its revenue target for FY24 is Tk161 crore, which includes income and expenses from leased units. However, annual reports show net losses from these units.

The organisation recently applied to the revenue board recommending a closing down of its unprofitable diplomatic bonded warehouse or liquor shop in Mohakhali, Dhaka, and about its plans to open a pastry shop in part of the space.

Pramanik explained that despite increased tourism, the corporation faces losses due to outdated infrastructure and gaps in staff skills. 

He explained that the corporation relies on its own income to operate, with significant expenses for salaries, pensions, and gratuities. "Even though business has been shut down for a long time due to Covid-19, these costs continue."

He added that the authorities are working on infrastructure and operational reforms and seeking partnerships with the private sector to sustain their operations.

The corporation's financials for FY23 audit report reveal that many projects are running at a loss, especially when accounting project costs. 

If the number of loss-making projects grows, the corporation risks becoming financially unsustainable, said the report.

The report shows that the corporation incurred a loss of Tk22.37 crore in FY23, compared to Tk20 crore in FY22.