Govt mulls partnership with DP World for Gazipur railway ICD

The inland container depot (ICD) project in Gazipur's Dhirashram area is finally going to be implemented under the public-private partnership (PPP) model as the government is considering making Dubai-based terminal operator DP World a partner in the venture.

Officials of the Public Private Partnership Authority Bangladesh said DP World has already agreed to work on the project. Now, discussion is going on to fix the terms and conditions of the final agreement.

Dr Najmus Sayadat, director (investment promotion) of PPP Authority, said, "We are preparing a document for DP World, which may take six months. The investment of DP World will be finalised based on the document."

The ICD will be built on a 160-acre site near Dhirashram Railway Station in Joydevpur, Gazipur.

According to Bangladesh Railway, the cost of the project could be up to $300 million. Once it is complete, the Kamalapur ICD will be relocated to Dhirashram.

This is expected to help container transport by rail go up by as high as 30%.

In July 2013, the Cabinet Committee on Economic Affairs approved the project aimed at building a full-fledged ICD under PPP.

Finding no suitable private investor, Bangladesh Railway in August 2020 decided to construct Dhirasram ICD with government funds.

In December last year, the Asian Development Bank (ADB) pledged $200 million in loans for the project and in January this year, the Prime Minister's Office (PMO) decided to implement the project through ADB funding.

But in March, the PMO changed its stance and decided to build the ICD in collaboration with DP World under the $1 billion investment proposal the firm had made in the beginning of 2020. The company wanted to invest the money in Bangladesh's container supply chain infrastructure, including ports, rail network and inland container terminals.

The government's latest decision was taken in view of the technical expertise of DP World in the construction and operation of port and container terminals, according to officials concerned.

DP World is a multinational logistics company based in Dubai, United Arab Emirates. It specialises in cargo logistics, port terminal operations, maritime services and free trade zones.

The company will also build one of the three terminals in Chattogram port under PPP arrangements. To this end, it signed a memorandum of understanding (MoU) with the PPP authorities in March this year.

Meanwhile, the government has undertaken another project involving an estimated cost of Tk3,473 crore for land acquisition and construction of a six-kilometre rail link for the Dhirashram ICD.

The railway expects to start the project this year with government funding.

SM Salimullah Bahar, chief planning officer of Bangladesh Railway, said, "The construction of the proposed multi-modal transit hub at Kamalapur Station, starting station of high-speed train in the Dhaka-Chattogram corridor and the Padma Rail Link will start from Kamalapur ICD. As a result, the government decided to set up a full-fledged ICD in Dhirashram with uninterrupted facilities for handling and transporting goods."

He said the capacity of the Kamalapur ICD is 90,000 TEUs (twenty-foot equivalent units).

"Around 80% of the containers from Chattogram port are transported towards Dhaka. Only 10% of this bulk is transported by rail. We are planning to increase the railway container transport to 30%," said Salimullah.

"The container capacity of the Kamalapur ICD will soon be exceeded. For this reason, the government has decided to shift the Kamalapur ICD to Dhirashram. This will increase the container transport of railways at a significant rate. At the same time, railways' revenue will also increase," he further said.

According to PPP authorities, the handling capacity ‍of the proposed ICD is 3,54,000 TEUs. The railway authorities will acquire 222.46 acres of land for the ICD and 6km connecting rail tracks.

The Bangladesh Railway is forming a new company named Container Company Bangladesh Limited (CCBL) to encourage traders to transport goods by rail.

The company will transport goods from warehouses and port to the station.

Bangladesh Knitwear Manufacturers and Exporters Association Vice-president Mohammad Hatem told The Business Standard, "The ICD in Kamalapur should have been shifted out of Dhaka long ago. If this is done, the pressure on Dhaka will be reduced. It will also reduce container congestion. Moreover, most of our factories are based in Gazipur-Tongi areas. The ICD in Dhirashram will benefit importers and exporters."

Dhaka Chamber of Commerce and Industries (DCCI) President Rizwan Rahman, however, thinks PPP projects are slow in implementation which can increase the expenditure.

Rizwan thinks the Dhirashram ICD should be built on the funding of ADB to reduce time and cost.