Govt moves to delist Khanpur ICD project from Indian LoC

The interim government has now started procedure to delist the Khanpur Inland Container Depot (ICD) project from the Indian line of credit (LoC) after rejecting a proposal for cost-and tenure extension in January, said officials.

The Ministry of Shipping (MoS) recently sought the opinion of Economic Relations Division (ERD) regarding the exclusion of the project from the LoC, sources said.

According to officials concerned, the ERD is now consulting relevant ministries to determine if delisting the project will have any legal complications or any financial implications. Once opinions are received, the ERD will request the Indian High Commission in Dhaka to delist the project from the LoC, according to a joint secretary of the ERD.

Earlier in March, during a review meeting on Bangladesh-India bilateral LoC, both sides agreed not to proceed with the project, sources said.

Prior to that, a meeting of the Executive Committee of the National Economic Council (ECNEC), chaired by Chief Adviser Prof Muhammad Yunus, sent back the revised project proposal with instructions for further review, citing a failure in timely execution and flaws in project proposal.

The shipping ministry had sought approval to hike the project cost by 57.08 per cent to Tk 6.16 billion from Tk 3.92-billion and to extend the implementation period by four more years. Officials alleged that the feasibility study for the container depot project was flawed and the cost was inflated.

Although the project's implementation timeline was from January 2020 to June 2023, no progress had been made. The project was initially approved at the ECNEC meeting on December 24, 2019, aiming to boost cargo transport by waterway. The government extended the deadline for two more years until June 2025, but to no avail.

The Public-Private Partnership (PPP) authority on its website mentioned that nearly 70 per cent of containers at the Chittagong port originate from or are destined for Dhaka, of which only 17 per cent are transported by road and rail.

The remaining containers are transported to and from Dhaka by truck that results in severe congestion on the Dhaka-Chittagong Highway and causes significant delays in shipment. As an alternative, inland water transport (IWT) system has strong potential considering there is only one ICD in Dhaka connected to Chittagong port through railway.

Once the Khanpur container and bulk terminal is built, carrying boxes by waterway will help reduce congestion on highways and also the transportation cost. The terminal will have the annual handling capacity of 80,000 TEUs (twenty-foot equivalent units) of containers.

syful-islam@outlook.com