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The government will develop container terminal-1 at the Payra Port under a Public Private Partnership.
The decision was made at a meeting of the Cabinet Committee on Economic Affairs (CCEA) on March 20, with Finance Minister Abul Hasan Mahmud Ali in the chair, reports UNB.
According to official sources, the CCEA has given its nod in principle to a proposal of the Payra Port Authority (PPA).
The Ministry of Shipping moved its subordinate body’s proposal to the CCEA meeting.
The CCEA has been the highest authority in approving any unsolicited offer in the purchase of the government.
Sources said that after such approval, the PPP Authority will now invite interested international companies to express their interest in implementing the project.
Payra Port was established in 2013 in the Patuakhali district of the country and has now been trying to expand its activities.
It is the country’s third-largest seaport, after the Chattogram Port and the Mongla Sea Port, and handles a significant portion of Bangladesh’s international trade.
Officials said that the main goal in establishing the port was to reduce the burden on the overcrowded Chattogram Port and improve the country’s transportation infrastructure.
About the development of container terminal-1, the PPA Authority on its official websites mentioned that there are some objectives behind the project.
These include providing a major gateway for the country's trade with the outside world, improving the quality of services, developing adequate facilities, decreasing the pressure on the existing ports, and enhancing the competitiveness of the country’s exports as prices of imported and exported commodities decrease as a result of shorter shipping times and lower shipping costs.
“Exporters would incur lower financial costs for their shipments due to the shorter processing and shipping time for their cargo," it said.
The PPP Authority also mentioned Bangladesh has a vast coastline, and in spite of that, there are only two sea ports. With the increased demand for sea-centric trade, congestion is quickly becoming an issue.
Officials said the Ministry of Shipping has also decided to develop five components of the Payra Port through Public-Private Partnership modality.
Shipping industry insiders said that one of the major advantages of the Payra Port is its location, which is convenient for the movement of cargo to and from the southwestern region of Bangladesh. This is one of those five.
The port is also well connected to the country’s transportation network, with road, rail, and waterway links to other parts of the country, they said.
They said that in recent years, the Payra Port has undergone a number of expansion and modernization projects to improve its infrastructure and efficiency. One such project is the construction of a new container terminal, which will increase the port’s capacity to handle 1.5 million twenty-foot equivalent units (TEUs) per year.
The industry insiders also mentioned that the Payra Port still faces a number of challenges as well.
One of the major challenges is the limited capacity of the port, which often leads to congestion and delays in the movement of cargo, they said.
The port is also struggling to compete with other regional ports, which have more advanced infrastructure and facilities, said a port user.
Another challenge for the port is that it has also been facing environmental concerns as it is located in an ecologically sensitive area, and there are concerns about the impact of its operations on the local ecosystem, he said.