Businesses, govt officials push for foreign operators to boost port efficiency

Business leaders and government officials have urged support for the move to appoint foreign operators at Bangladesh’s ports to enhance efficiency and align with international standards, instead of opposing it.

They made the call at a roundtable on “Challenges and Opportunities in the Logistics Sector”, held at Lakeshore Heights hotel in Gulshan on Sunday. Dr Ahmed Ullah, director general at the Chief Adviser’s Office, attended as the special guest. Professor Md Mamun Habib of Independent University, Bangladesh, delivered the keynote address. The discussion was chaired by Shamsul Huq Zahid, editor of The Financial Express, while Shiabur Rahman Shihab, head of online at The Financial Express, moderated it.

The event was organised by The Financial Express with the support of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), Conveyor Group, Bangladesh Shipping Agents Association (BSAA), Anchorage Container Depot Limited, and Bangladesh Container Shipping Association (BCSA).

Mohammad Hatem, president of BKMEA, said foreign operators could help enhance management efficiency while enabling local manpower to learn modern technologies and international-standard practices.

Referring to the sudden 40 per cent hike in charges at Chattogram Port, he said, “A port is a service-oriented organisation. Such a steep rise in charges without any discussion or logical explanation is unjustified.”Hatem also questioned why a government institution should seek excessive profits.

He stressed the need to operationalise the Bay Terminal quickly and fully utilise the capacities of Mongla and Payra ports to help achieve the $100 billion export target. Beyond ports, he highlighted the urgency of addressing gas and electricity shortages, ensuring uninterrupted energy supply, and improving law and order to boost exports.

Echoing his concerns, BGMEA Senior Vice President Inamul Haq Khan said container handling at Chattogram Port currently takes five to six days, compared to the global standard of one to two days. “Often, we are forced to send goods by air to meet buyers’ commitments, which costs four times more than seaway shipments,” he noted.

Former Bangladesh Freight Forwarders Association (BAFFA) President Kabir Ahmed also backed the inclusion of foreign operators, saying a vested group continues to oppose such reforms. He further stressed the need for reforms at Biman Bangladesh Airlines and Hazrat Shahjalal International Airport, pointing out that all four Explosive Detection System (EDS) machines remain inactive.

Kabir Ahmed identified the National Board of Revenue (NBR) as the biggest hurdle for logistics, urging policy reforms to improve port efficiency and hold those responsible for delays accountable.

Bangladesh Garments Accessories & Packaging Manufacturers & Exporters Association (BGAPMEA) President MD Shahriar said every truck in metropolitan areas is forced to pay Tk 50–200 in bribes, while port delays keep trucks waiting an extra three to four days, pushing up exporters’ costs. He alleged that officials at Chattogram Port Authority behave as if they are running Singapore Port, while the reality is far less efficient.

BRVIDA President Abdul Haq observed that infrastructure costs in Bangladesh are higher than global standards, whereas countries like Vietnam have reduced costs through reforms. He lamented that multiple ministries are responsible for transport but none effectively manages multi-modal transformation.

BSAA Chairman Syed Mohammad Arif criticised the recent port charge hike imposed without consultation with stakeholders, which has triggered a chain reaction of rate increases across services.

BCSA General Secretary Shamsuddin Chowdhury said berth operator appointments should be decided by container agents. He warned that Chattogram Port has already reached its maximum capacity and that alternative solutions are essential to achieving the $100 billion export target by 2030.

Meanwhile, the government said infrastructure expansion is under way.

Addressing the event as chief guest, Senior Secretary of the Ministry of Shipping Mohammad Yousuf announced that construction of a multi-modal logistics hub at Bay Terminal in Chattogram would begin soon. The planned facility will integrate rail, road, and sea transport, along with a new railway container terminal in Halishahar.

He said the Bay Terminal Breakwater Project, financed by the World Bank, is advancing. “A subsidiary loan agreement will be signed today, following an earlier deal between ERD and the World Bank in Washington,” he noted.

Tender evaluation for the Bay Terminal is expected within one to two months. Three terminals will be developed there, one each by CPA, PSA Singapore, and DP World. By 2036, the Bay Terminal is projected to handle 5.36 million TEUs, compared to Chattogram Port’s current 2.86 million TEU capacity, which is already overstretched, handling 3.3 million TEUs annually.

“Although stakeholders are pushing to expedite the Bay Terminal, it is being implemented under a PPP model on a G-to-G basis, which requires the appointment of a transaction adviser,” Yousuf explained. Ernst & Young, the previous adviser, has exited, and the ministry is now in talks with ADB to reduce costs.

A report from the new adviser is expected by October, and by December at least one Bay Terminal will be handed over to a contractor, he said. Yousuf also expressed hope that the New Mooring Container Terminal (NCT) would be handed over to a global operator under a transparent agreement by October.

On the National Logistics Policy, he said it would be amended soon, with two high-powered committees—chaired by the Chief Adviser and the Principal Secretary—already formed. An action plan under the policy is expected within a month, incorporating recommendations from the FE roundtable, the World Bank, and relevant ministries.

While physical infrastructure is vital, Bangladesh continues to create barriers to foreign direct investment (FDI), he noted. In 2023, the country received only $3 billion in FDI, mostly from the expansion of existing investors rather than new entrants. “We are lagging behind India and Vietnam in attracting FDI. Without reducing logistics costs, we will not be able to enhance export competitiveness,” one official added.

The shipping secretary also disclosed plans to develop a Port Community System to integrate Mongla, Payra, and Chattogram ports, based on a World Bank design. He requested businesses to move empty containers to off-docks or return them to ships to ease congestion.

He said the railway adviser has agreed to hand over at least one container train on the Dhaka–Chattogram route to the private sector. A master plan for Matarbari Phase-II is also underway, including LNG and LPG terminals and a new dockyard to be constructed by CPA.

On port tariffs already approved by the Ministry of Finance, Yousuf said rates will only be finalised after consultations with stakeholders. CPA stressed the need to raise revenue to finance infrastructure development but assured that tariff hikes will not be implemented immediately.

Some equipment installed at NCT, which began operations in 2007, has become faulty and needs replacement. NBR, CPA, and the Shipping Ministry are working in coordination on port reforms.

Yousuf also conveyed the Chief Adviser’s instruction to waive 7.5 per cent VAT on ship imports, as the tax is discouraging investors. However, he added, the issue must be settled in consultation with the IMF.

Masrur Reaz, Chairman of Policy Exchange Bangladesh, said the country is “five decades behind” in logistics development, as the sector lacked a proper policy, regulatory framework, and market development until the recent logistics strategy was initiated.

He argued that higher export and production costs due to US tariffs and LDC graduation could be offset by greater logistics efficiency. Bangladesh could also benefit from shifts in global value chains and higher US tariffs on other countries, but only if it upgrades its logistics system.

Reaz criticised delays in enacting the National Logistics Policy, saying Bangladesh is already a decade behind. Stressing the need for reform, he argued that Chattogram Port must be opened to private operators. “There is no alternative to engaging a global operator at Chattogram Port to raise efficiency,” he said.

Bangladesh Ocean Going Ship Owners’ Association (BOGSOA) President Azam J Chowdhury accused the government of excluding the private sector from decision-making processes.

Delivering the keynote paper, Prof Mamun Habib of Independent University, Bangladesh, noted that Bangladesh continues to lag its South Asian peers in global logistics rankings.

According to the World Bank’s 2023 Logistics Performance Index, the country ranked 88th, compared to India at 38 and Sri Lanka at 73.

“We are consistently weakest in infrastructure and business fundamentals, which makes it difficult to compete globally,” Prof Habib said.

Key challenges, he added, include poor integration of transport networks, inadequate warehousing and distribution facilities, and delays in implementing the national logistics strategy. A lack of skilled manpower and limited adoption of modern technology further weaken the sector.

Despite these constraints, Prof Habib pointed to opportunities in the recently approved but still unimplemented national logistics strategy, growing private sector interest in ICD investment, and the potential of automation, AI, blockchain, and other digital technologies in supply chain management.

“Bangladesh must embrace automation, ethical practices, and human resource development to build a smart, resilient, and environmentally sustainable logistics ecosystem,” he stressed, calling for greater coordination among port authorities, customs, civil aviation, and regulatory agencies.

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