Making Chittagong Port a regional maritime hub

Bangladesh's logistical paucity is endemic. It ranges from all ports -- land, sea and air -- to digital system to road and rail communication to distribution and supply chains. It goes to the credit of the interim government for making an attempt to develop a multimodal logistics system centring around the country's premier Chittagong Port and connecting other two sea ports, Mongla and Pyra. Obviously, the emphasis is on the development of the capacity of the Chittagong Port. Facts speak for the overwhelming necessity of doing this. 

Right now, the Chittagong Port's handling capacity is limited to just 2.86 million TEU (Twenty-foot equivalent unit), a standard unit of measurement for volume in the maritime shipping industry but it has to overstress itself to handle 3.3 million TEUs a year. No wonder that at a seminar organized by the FE recently, the keynote deliverer, Prof Md Mamun Habib of the School of Business and Entrepreneurship at the Independent University, Bangladesh cited that Bangladesh lags far behind its South Asian peers in global logistics ranking. How does it trail is evident from the World Bank's Logistics Performance Index (LPI). The country's ranking was as low as 88th compared to India's 38th and Sri Lanka's 73rdin 2023. Chairman of Policy Exchange, Manzur Reaz, was even more critical in observing that the country is 'five decades behind' in developing logistics as a sector and 'a decade behind' since the formulation of the National Logistics Policy. 

The result is for all to see: container handling, as revealed by a BGMEA's senior vice-president, at the Chittagong Port takes five to six days compared to the global standard of one to two days. It is against all these constraints, Bangladesh has taken up an ambitious plan to elevate the Chittagong Port to a regional hub of maritime operation. The challenges are daunting but if executed under the integrated National Logistics Policy, this is not beyond reach within a reasonable time frame. 

A follow-up story carried in the FE yesterday shows that some progress in processing the system has already been made. At the seminar of the FE, mention was made for development of three bay terminals which will achieve the capacity to handle 5.36 million TEUs by 2036. Now, the latest report asserts that the Chittagong Port Authority has planned to 'implement, upgrade and operate' four major terminal projects under the Public-Private Partnership (PPP) model. The year 2036 is a long way off. But to go by the Bangladesh Investment Development Authority chairman, international tendering process for several Chittagong Port was underway and the plan was to appoint the first operator at the New-mooring Container Terminal (NCT), Laldia Container Terminal and one bay terminal by December this year at the latest. 

Earlier, though, the three bay terminals were scheduled to be developed by the Chittagong Port Authority, PSA Singapore and DP World under a PPP G-to-G model. Now the latest report holds that four projects to be implemented under the model are Laldia Container Terminal, bay terminals (1 and 2), the new NCT including the overflow container yard and Patenga Container Terminal. The government has already decided to hand over the responsibility of handling the bay terminals to foreign operators preferably to PSA Singapore and Dubai-based DP World. Saudi RSGT is likely to take over the handling of Patenga Terminal under a 22-year PPP agreement. Finally, Denmark's APM will take the responsibility of constructing the automated Laldia Terminal. 

Here are two phases in the projects -- development or expansion of facilities and operation. Operation can be efficient and timely only if the supporting system is geared to trigger the entire process. Development of infrastructural facilities take time, particularly when it concerns bay terminals and their integration with the communication system, supply and distribution chains. There is no point repeating rhetoric, better it would be to inform the public of the phase-wise development of the logistics that also envisions connecting the other two ports. Allowing just one dedicated train under the private operation to maintain the supply chain when the multimodal logistics are equipped to support the country's projected foreign exchange earnings targeted at $1,000 billion.

Efficient operation of the terminals by foreign companies may reduce costs slightly but there may still remain many a slip between the cup and the lip. This is certainly not going to help the cause much because businesses have already resented the sudden 40 per cent hike in charges at the Chittagong Port. Their grievance may further deepen with further escalation of charges, if it happens anyway after the foreign companies take over the responsibility of terminal handling. The priority ought to be putting in place the advanced and automated infrastructure first and then proceed to hand over the handling responsibility to foreign companies with genuine track records. 

Their performance will tell the story. If by the end of December, they take over the responsibility, it is not a long way off. Let the nation wait until that time to see how far progress in installing advanced and automated system has been made. Sure enough, the other challenge involving connection of the ports under a multimodal network to turn the other two seaports efficient and the Chittagong Port a hub must also be taken up quite seriously. 

nilratanhalder2000@yahoo.com