Saudi firm to operate Patenga container terminal for 22 years

The Red Sea Gateway Terminal (RSGT), a Saudi company, has been confirmed as the operator of Patenga container terminal for 22 years, according to officials involved in the matter.

This development marks a milestone for Bangladesh, as it is the first time in the country's history that a foreign company will be engaged to operate a port, which reflects the growing confidence of foreign firms in the country's future growth prospects.

The Chattogram Port Authority (CPA) and Red Sea Gateway which currently operates in the King Abdulaziz Port in Jeddah are expected to sign a deal in either August or September this year, officials said.

However, businesses have expressed frustration over the considerable delay in launching the port's operations, despite it being developed using CPA's own financing. They are urging the government to expedite the commencement of operations, as it would bring them significant cost and time reduction benefits.

According to the Public Private Partnership Authority (PPP Authority), procurement of equipment and additions to the terminal will be undertaken within two years of the 22-year contract. Red Sea Gateway is known for its use of the latest machinery and technology in port management.

Md Abul Bashar, director general (Programming and Investment Promotion) of the PPP Authority, told The Business Standard that the terminal operator appointment Request for Proposal was given on 12 June this year.

He added that Red Sea Gateway will have 42 days, as per international standards, to submit their proposal, which is expected by the end of July. Following proposal evaluation, other formalities, and Cabinet approval, the agreement with Red Sea Gateway is expected to be signed within the next two months.

The timeline for completing operational work, including procurement and installation of equipment, will depend on Red Sea Gateway. The faster the equipment can be made operational, the better it will be for the company.

Details about profit-sharing between Chattogram port and Red Sea Gateway in the operation of Patenga container terminal will be known after the proposal is submitted and approved, according to PPP Authority.

Businessmen have emphasised the importance of expediting operational activities of Patenga container terminal for the benefit of traders.

Mahbubul Alam, president of the Chattogram Chamber of Commerce and Industry, believes that progress in the recruitment process for the Patenga container terminal operator is positive news for the country's import and export trade.

He urges the swift appointment of operators to ensure 100% operational activities at the terminal.

The International Finance Corporation (IFC) was appointed by the Chattogram port as the transaction adviser in August of last year to appoint a foreign operator for Patenga container terminal. The agency was given the responsibility for preparing the investment proposal for Red Sea Gateway.

According to the shipping ministry, the transaction adviser will provide advice and proposals on the process of appointing an operator to manage the Patenga container terminal. After the proposal, the port will negotiate with Red Sea on the terms of operating the terminal.

When contacted, Mustafa Kamal, secretary of the shipping ministry, referred the matter to the Chattogram Port Authority.

CPA Secretary Md Omar Faruk told TBS that the PPP Authority is currently negotiating with Red Sea for the appointment of the Patrenga container terminal operator and that the CPA will take actions in this regard once it gets information from the PPP Authority through the shipping ministry.

Patenga container terminal was completed in July last year. Initially, it was supposed to be operated by the CPA, but the government later decided to run it with a foreign operator under the PPP model.

According to Chattogram port, Patenga container terminal has three container jetties and one dolphin oil jetty, allowing for the simultaneous docking of three container ships and one oil tanker.

To reach the main jetty of Chattogram Port, ships have to traverse a river route of approximately 14 kilometres from the mouth of the River Karnaphuli. However, the distance from Patenga container terminal to the Karnaphuli estuary is only six kilometres.

Once the operation starts, the terminal has the capacity to handle 450,000 TEUs (Twenty Foot Equivalent Unit) containers annually.

According to the Chattogram port, the project was supposed to be completed in December 2019 after receiving the Development Project Proposal (DPP) approval on 13 June 2017. However, the duration of the project was extended until July 2022.

On 26 January this year, a 200-metre-long vessel anchored at Patenga container terminal. On the occasion of the inauguration of four new ships of the Meghna Group, one of the ships namely MV Meghna Victory also anchored at the terminal. Earlier, in November last, the terminal was inaugurated on a trial basis by unloading goods from the cargo vessel MCL-19 imported from Myanmar.