Transshipment deal: Chattogram port to provide priority services for India

The Chittagong Port Authority (CPA) will handle Indian cargo and provide space for their goods on a priority basis under the transshipment agreement.

Quoting article 4 of the agreement, titled "Port and Other Facilities," the CPA said on Wednesday that India initially wanted a dedicated space for its goods at Bangladeshi ports, but the port authorities decided to give the country space on a priority basis instead.

"Indian goods will be prioritised in terms of handling, and the port will provide them space on a priority basis," Mohammad Omar Faruk, secretary of the CPA told The Business Standard.
CPA Traffic Director Enamul Karim echoed the statement.

During the draft phase of the agreement, the CPA sent a letter to the Ministry of Shipping Secretary, saying, "The CPA will provide the same facility to Indian cargo as Bangladeshi cargo gets [imposing tariffs] during export and import.

"Additionally, for Indian cargo, the port authorities will provide priority-based space, instead of dedicated space."

Defending the decision to provide priority services to India, CPA secretary Faruk said, "India will use our port as transit to transport goods to their north-eastern states. If we had given them dedicated space at our port, it might have been left unused as Indian cargo might not always have arrived.

"Considering that we have limited space at our port, we will give them priority in terms of berthing, unloading and using space."

However, a number of Bangladeshi business leaders said the agreement discriminates against Bangladesh's businessmen. 

They added that the local exporters and importers are incurring huge losses due to current container vessel congestion at the port. The transshipment agreement would surely increase business, but ports should increase their efficiency to handle the growth of the container handling sector. 

Mahbub Alam, president of the Chattogram Chamber of Commerce and Industry (CCCI) told The Business Standard, "It is discriminatory against our businessmen and it will lead us to more competition. 

"Giving India dedicated space would have been better, as Indian cargo shipments would have had a specific space. It would not have led to more waiting time for us."

Meanwhile, Ahsanul Haque Chowdhury, president of the Bangladesh Shipping Agents' Association said, "I do not see any preparation of the Chattogram port to handle India's transshipment goods. If India starts sending goods through Chattogram port to their seven sister states, the volume of vessels will increase. 

"We are struggling with the space available for holding containers. Where would we keep their [India's] containers? If we give them service on a priority basis, the waiting time for vessels will increase further, which in turn will affect our local market and economy."

He continued, "I do not see any logic in this idea without increasing the capacity of the port. It will surely increase business, but increasing port capacity is also important. 

On October 25, 2018, India and Bangladesh signed an agreement to allow India to use Bangladesh's two seaports – Chattogram and Mongla – as transit points to carry goods to-and-from India's north-eastern states. 

A standard operating procedure (SOP) was signed in this regard – one year after a meeting between Prime Minister Sheikh Hasina and her Indian counterpart Narendra Modi – in New Delhi on October 5, 2019.

This transshipment will formally begin after two trial runs carrying cargo to-and-from Bangladesh's Chattogram port and India's Kolkata port.

"However, the date for the first trial run has not yet been set," said CPA chairman Rear Admiral Zulfikar Aziz.

The Chittagong port has a capacity of 49,018 twenty-foot equivalent units (TEUs) container spaces in their port yard. On average, around 40,000 TEUs containers are lying there, and over 16 percent of them are unclaimed, occupying the available space for years. 

During crises in transportation or natural calamities, the port faces container congestion at its yards because it overshoots its capacity. Last year, the port handled over three million containers.

In the fiscal year 2018-2019, the average container vessel turnaround time at the country's premiere port was 2.88 days (69.12 hours), while in India, port vessel turnaround time was only 0.90 days (21.6 hours).   

The CPA chairman told The Business Standard, "As the capacity of the port is being overshot, the port authority has started constructing the Patenga Container Terminal (PCT). Around 52 percent of the under-construction PCT has been completed and this terminal is scheduled to begin operations this year."

"Once the terminal is launched, a total of four lakh TEUs containers will be able to be handled annually; while three container vessels and an oil tanker will be able to be berthed, at a time, there."

The port's existing jetties can handle 12 vessels at a time. 

Last year, the port handled more than three million TEUs containers, a growth of more than six percent from the number of containers it handled the previous year.  

The port yard and the under-construction PCT will only be able to handle four million TEUs – any more and the port capacity will be overshot.

The CPA chairman said that the port has been expanding its capacity, including the port limit, to handle an increasing number of containers. Moreover, the Bay terminal and the Matarbari terminal are under construction.

He added that the port limit has been expanded six-fold from seven nautical miles (12.97 kms) to 50 nautical miles (92.6km).

Meanwhile, the port has bought 51 pieces of key equipment, including 10 ship-to-shore gantry cranes for the New Mooring Container Terminal. The first phase of the New Mooring Overflow yard has been completed at a cost of Tk91 crore. 

Two mobile harbour cranes have also been added to the port.

Aziz added that the government has already approved a detailed project proposal to buy 104 pieces of new equipment, and the process to buy them is underway.