'Karnafuly dry-dock, jetties to cut trade cost, boost port capacity'

Engineer Abdur Rashid founded the Karnafuly Ship Builders Limited (KSBL) in Chattogram in 1994 after visiting Japan for a training programme on shipbuilding. He was an employee of the Bangladesh Marine Fisheries Academy at that time but the six-month training changed his life and shaped the shipbuilding industry in Bangladesh for good. Since then, the KSBL has built around 1,200 ships and repaired around 800 in its three shipyards – two in Chattogram, one in Narayangonj – set up on 68 acres of land.

KSBL employs around 10,000 people and spends Tk10 crore per month as a salary while its yearly turnover is over Tk2,500 crore. KSBL Founder and Managing Director Engineer Abdur Rashid shared his journey with The Business Standard's Chattogram Bureau Chief Shamsuddin Illius.  

How will the jetties you are building facilitate trade? 

The government is spending thousands of crore taka on Payra and Mongla ports, but unfortunately, these ports cannot berth vessels with a draught of 8-9 metres. The Karnaphuli River is a blessing for us as here we are able to berth vessels with a draft of up to 11 metres in private jetties. 

The cost of doing business will decrease as more and more large ships will berth here, decreasing turnaround time as well. We are investing Tk600 crore to construct six jetties. I believe we will be able to handle our export-import trade for the next 20 years utilising the existing ports and these six jetties. 

Around 4,000 ships come into Chattogram port every year but currently, Bangladesh can only repair vessels of 20,000 DWT (or 175 meters in length) at Chattogram Dry Dock, owned by the Bangladesh Navy. Building this new dry dock will be a landmark achievement as Bangladesh will be able to repair vessels of 100,000 DWT or 253 meters in length.

It will help to gain the trust of foreign shipping operators to operate large ships in Bangladesh. This dockyard and jetties will create more than 3,000 jobs.

How much cargo do private jetties handle?

We have been operating two private jetties for one year, handling over 12,00,000 tonnes of cargo so far.

Securing a low-interest loan of over Tk800 crore from the World Bank, we are building a total of six private jetties with a capacity of berthing vessels of 11-metre draught, which will increase the container handling capacity of the Chattogram port. 

We hope to build the remaining four jetties within two years. It will open more possibilities of direct shipping with our Europe, the USA and Asia routes. Recently, representatives from different countries including England visited our jetties to open direct routes. 

Where did you first get your shipbuilding ideas?

In 1994, I visited Japan with seven other fellows from seven different countries for a six-month-long training programme on shipbuilding facilitated by the Japanese government. We have visited the leading industries across Japan. I returned from Japan on 25 June 1994. After returning home, it came to my mind that if Japan could do such things (shipbuilding) then why cannot we?

I was looking for land and found some on the south bank of Karnaphuli River for building a dockyard. The government leased me 1.1 acres of land for just Tk7 lakh along with some private land. I started my venture.

My company has built dredgers for the government through international tender worth over Tk6,000 crore so far and currently building Bangladesh's largest dredger with a capacity of 28-inch cutter suction. We are also constructing the country's largest dockyard with a capacity of 100,000 DWT (deadweight tonnes), which is expected to be completed by 2024. 

How did you manage funds for the business?

After securing land, I applied to Janata Bank for a loan. I had a good relationship with the Janata Bank chairman and after verifying my documents, they approved a loan of Tk2.28 crore for building the dockyard. 

Around two and a half years ago, the World Bank gave us Tk800 crore on easy terms for 20 years to build a jetty and dry dock. We will pay it back over a 20-year period using our earnings. We are the only company that has received a World Bank loan. 

Aside from the World Bank loans, we have some loans with local banks worth Tk600-700 crore. However, we now have assets worth more than Tk10,000 crore.

What are the challenges of repairing vessels?   

In 1984, Chattogram port placed an order with a shipyard in Dhaka for building a tugboat named "Kandari 1" with a cost of Tk6 crore. In 1986, the tugboat capsized in Chandpur while being taken to Chattogram port after construction. The ship was brought to Chattogram port finally but kept abandoned.

In 1997, the port decided to repair the ship again at the same shipyard with a spending of Tk2.16 crore but the boat could not be repaired, establishing a notion that building a tugboat in Bangladesh is not possible.

Then, I have taken the task of repairing it with a pledge – no cure, no payment. I got the tender with an offering price of Tk15 crore and I fixed the vessel as per the terms and conditions set by the port.

I have taken another big challenge to repair a vessel called "Banglar Shourabh". It was severely damaged in an onboard accident. In 2006, we participated in a tender to repair the ship under the "no cure, no payment" method. 

The government bought the ship from the insurance company with Tk4.20 crore as a scrap ship. After getting the tender, I rebuilt the ship as an original one, which is plying the sea routes to date.

Currently, we are building ships worth Tk2,500 crore for the government in our yard. We built tug boats for Chattogram port, BIWTC, Water Board and Mongla port. 

We build different kinds of ships including cruise ships, coastal ships and mother pilot vessels, ferries, buoy-lifting vessels, passenger vessels and dredgers.

How did the idea of building dredgers come to your mind?

I attended a shipbuilding fair in Dubai in 2009. We had a stall there. There was another stall of a Dutch company. They construct dredgers. At the time, the BIWTA intended to construct three dredgers and floated tenders. I asked the Dutch firm to partner with us in building dredgers in Bangladesh. They agreed. We jointly participated in the BIWTA tender with all of their documents. 

However, we did not get the tender, but we were able to secure a contract for three small dredgers (18 inches) worth Tk60 crore later on. During the 11-month construction of these three dredgers, approximately 15 Dutch experts worked at our yard.

By 11 months, our people had become dredger masters. Since then, we have not brought any people from the Netherlands while building dredgers, except equipment. They design the dredger, and we build it. We are currently constructing two dredgers, each with a capacity of 28 inches and costs Tk400 crore.

Why are you prioritising maritime routes?

I am interested in it because I studied marine engineering. We found success four years ago when we launched the Karnafuly Express from Cox's Bazar. Later we purchased Bay One, then Baro Awalia, and are now in the middle of purchasing a ship to carry Hajj pilgrims. The scope of exploring maritime routes is huge and will help boost tourism in Bangladesh.

What are the prospects of maritime tourism in Bangladesh?

The government must first construct certain jetties at various locations throughout the country, including Cox's Bazar, St. Martin's, Sonarchar, and Hironpoint, in order to facilitate maritime tourism. 

With so many new tourist destinations springing up all throughout the country, the government can make a significant profit by just building jetties. If the government made it easier for tourists to access these islands, there would be enormous potential for business. Tourists are eager to discover new areas.