UAE group getting MoU on Bay terminal investment extended

The government is extending the tenure of a memorandum of understanding (MoU) under which the Abu Dhabi Ports Group wants to invest in the potential port sector of Bangladesh, while an impasse keeps other scrambling foreign investors at bay.

An impasse over appointment of a foreign operator for New Mooring Container Terminal (NCT) has been persisting for some time now amid contentions.

The AD Ports Group had signed the non-binding Memorandum of Understanding (MoU) with the Chittagong Port Authority (CPA) one year back and its tenure expired last week, officials said.

Under the MoU, AD Ports Group had planned to invest $1.0 billion in construction of a multipurpose terminal under the Bay Terminal project near the Chittagong seaport, dubbed Bangladesh's commercial lifeline.

Also, PSA Singapore and DP World of the United Arab Emirates have put on stake $1.5 billion each to develop two container terminals under the Bay Terminal project.

The World Bank this past April signed a deal with the government to provide $650 million for construction of a 6-kilometre breakwater and access channels linking the Bay Terminal on the Bay of Bengal.

Moreover, local conglomerate East Coast Group and its foreign partners bet $3.5 billion on building a liquid bulk terminal in the Bay Terminal project.

Saif Powertech, the lone operator of the New Mooring Container Terminal since its inception, the biggest box terminal of Chittagong port, is local partner of AD Ports Group in Bangladesh.

Members of various political parties and labour organisations have stood out against the government move to appointment of a foreign operator, DP World, to operate the NCT.

According to Shipping Ministry officials, the high-ups of AD Ports Group met shipping adviser M Sakhawat Hussain on Tuesday morning to discuss an extension of the MoU and progress in Bay Terminal project implementation.

Sources say at the meeting the shipping adviser agreed that the tenure of the accord will be extended.

Contacted, Mr Hussain told the FE that the CPA chairman is now staying abroad and that "steps will be taken on the MoU after his return".

However, shipping secretary Mohammed Yousuf said following the expiry of tenure of the memorandum, AD Ports Group officials met the adviser and sought extension of the deal.

"Since this is not a legal document, we informed them that we will extend the MoU," he told the FE writer.

The Public-Private Partnership Authority (PPPA) had appointed UK-based Ernst & Young LLP transaction adviser in 2022 for the terminal. However, the company has yet to submit any report to the authorities, sources said. The tenure of this contract has also lapsed.

The Bay Terminal will enhance Chittagong Port's annual handling capacity to 5.0 million twenty-foot equivalent units (TEUs) from the current handling of around 3.2 million TEUs.

The Bay Terminal will have at least 12-metre water draft allowing 300-metre-long ships with 5,000-TEU-container-carrying capacity to take berth in the jetties any time at day and night.

The terminal will be built on 2,500 acres of land near the Bay of Bengal, now under global spotlight, according to officials concerned.

syful-islam@outlook.com