The six ships, two product carriers, two bulk carriers and two container ships, will be built in China and the $171m cost will be funded through a preferential loan deal between BSC and China National Machinery Import and Export Corporation (CMC).
The highly favourable loan is done on a government to government level. After a two-year interest-free period the remaining 13-year term will be at a maximum 2%. The 22 private shipping companies in Bangladesh, however are complaining that it's biased against them as they find it difficult to buy new ships. The BSC loan terms are far better than what they can obtain from banks in Bangladesh, where the pay-back period for loans to buy small vessels worth around $12m is usually as short as five years. For larger vessels worth around $23m, the loan duration is around 10 years.
Interest rates are also much higher, at between 18% and 20%, and over 24% for even larger vessels.
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