Chattogram customs house is going to hold its first online auction on October 27 as it seeks to offer a simplified and transparent participatory process to draw more bidders, attain higher prices and free up space at the port’s yards.
Some 547 tonnes of unclaimed goods will be auctioned off, including 262 tonnes of scrap iron, 169 tonnes of soda ash, 87 tonnes of ginger, 12 tonnes of dates and 11 tonnes of fabrics.
With physical tendering no longer necessary, bidders will have to submit documents and place their offers using an e-auction link on Bangladesh Customs’ website. For this, they will get two days, October 25 and October 26.
Through the electronic process, the customs will be seeking to attain prices higher than the reserve value, which is 60 per cent of the price of the goods plus tax. It has already made the reserve value public.
Most of the items had been imported through the Chattogram port between 2010 and 2018 and the importers have not taken the delivery on time.
Asked why the deliveries were not taken, customs officials and importers cited several reasons, including a fall in the prices of goods in the local market, failure to submit original documents in support of the shipment, failure to get clearance and importers’ refusal to pay fines for anomalies.
Some 7,980 import consignments worth Tk 12,308 crore have been occupying the port’s yards for the past six years as September, according to the Chattogram Port and customs data, all because auctions had not been held.
This delay resulted from, among other reasons, non-disclosure of reserve values, putting off interested buyers who lack the skill of estimating prices, resulting in limited participation, said customs officials.
There is also a shortage of workforce and equipment. Importers sometimes obtain suspension orders from courts after challenging the customs’ process, delaying the auction, they said.
Conventionally, three auctions are held for the sale of non-perishable goods. In the first auction, customs try to attain a price higher than the reserve value.
If that is not possible, a second one is held where customs try to attain prices higher than the highest offer of the first auction.
If that too fails, a third auction is held where the item is sold simply to whoever bids the highest.
Insiders revealed that although conventionally reserve values are never made public, they do get leaked. The bidders then just wait for the third auction to secure a low price.
Disclosure of the reserve value this time around will help attract ordinary people and organisations, thereby increasing the number of bidders and ensuring good prices, they said.
“We are conducting the e-auction on a small scale,” Deputy Commissioner (auction) Faisal Al Mamun told The Daily Star, adding that its successful completion would usher in the clearance of bigger quantities of goods.
“Most bidders from outside of Chattogram usually do not show interest in participating in auctions due to the need for physical attendance,” he said.
The National Board of Revenue took up the initiative of setting up the automated auction system for all customs houses under the Bangladesh Trade Facilitation Activity project in 2015.
The first e-auction took place in Benapole Customs House in mid-2019.
Other six customs houses have adopted the method, including Dhaka Customs Bond Commissionerate, Dhaka Customs House, Kamalapur Inland Container Depot, Mongla Custom House and Pangaon Customs House.
