Coordination and modernisation needed to make Chattogram Port a regional hub
Experts, representatives of stakeholders and high government officials exchanged views about the port’s potential for becoming a regional hub
The Chattogram Port has a rich history of international trade that goes back thousands of years. Recent initiatives by the government have been instrumental in improving the port, which handles over 90% of the country's export-import trade.
With the new ambitious projects like the Bay Terminal promising to enhance the port's capacity further, the government now aspires to make the Chattogram Port a regional hub.
In a recent roundtable discussion organised by The Business Standard, experts, representatives of stakeholders and high government officials exchanged views about the port's potential for becoming a regional hub.
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The State Minister for Shipping, Khalid Mahmud Chowdhury attended the event as the chief guest. The event was moderated by Executive Editor of The Business Standard, Sharier Khan. Editor of The Business Standard, Inam Ahmed was also present.
Kahirul Alam Sujan
Vice President, Bangladesh Freight Forwarders Association
The Chattogram Port handles nearly 93 percent of the shipping for export and import. This port keeps the country's economy alive. There is a possibility now for this port to become a regional port. It will begin its journey as a regional port after the implementation of the port expansion project.
The current government is implementing many port-related projects and expansion work of other ports are also ongoing. Modern terminals and other modern facilities are being added.
Container handling at Chattogram port began in 1977. Chattogram Container Terminal (CCT) was built and started container handling in 1991. The Patenga Terminal built during the period of the current government is waiting to begin operation.
The Chattogram port is now more important than ever after 50 years of independence, given that infrastructure at other ports are not as developed. 93% of the import and export through the sea go through the Chattogram port. On average, 18 lakh TEUs (twenty feet equivalent unit) were handled per year at the Chattogram port between FY2012-13 to FY2016-17. In the next five years, FY2017-18 to FY2021-22, this volume increased to 28 lakh TEUs containers per year. The growth rate in the five year period was 46%.
The growth happened as a result of the growth of international trade. Between FY2012-13 to FY2016-17 the port handled 2,592 ships per year on average. In the following five years the number went up to 3,942. Last year, 11 crore and 66 lakh tonnes of commodities were handled by the port.
During FY2021-22 $89 billion dollars of import and $52 billion of export came through the port. This was a $40 billion dollar increase from the previous year.
A treaty was signed between Bangladesh and India in 2018 for container transport through Chattogram port to the seven Indian states. A test shipment was conducted and full operation is expected to begin. This is the beginning of Chattogram port as a regional port.
Honourable Prime Minister Sheikh Hasina said Bhutan is welcome to use the Mongla and Payra ports, as well as inviting the country to build warehouses in Bangladesh if necessary.
Bangladeshi freight forwarders will also benefit greatly from warehouse facilities like that and it will relieve pressure on the port.
Even though the Chattogram port has begun acting as a regional port, it is not currently possible to handle containers from neighbouring countries, as the port already struggles to handle the local containers. This is why new terminals and infrastructure is needed.
The ports were being neglected before, but the current government has taken many initiatives to develop port facilities, including building the Payra Sea Port, new terminal at Mongla, with the most projects being at the Chattogram port, where the Matarbari terminal was constructed as part of the planned extension.
Goods transport via roads from the Matarbari terminal will begin by 2026. Matarbari will be used as a transhipment facility. This terminal will be able to park ships directly from Europe and America. Neighbouring countries can use this as a transhipment facility.
However, only infrastructure will not make Chattogram a regional port. It will need paperless trade like in Singapore and Colombo. The start of the electronic delivery order has been really impactful. This is a very big achievement.
The Shipping Ministry offices should be under one roof. Container release system should be modernised. A distribution park like Singapore should be built. Opening containers at the jetty is also something that needs to stop. No other port has this practice.
The two big projects for the Chattogram Port, when finished, will start a new era. The government should make policies to allow local companies to run the port, so that the revenue stays within the country. But do local companies have the capabilities to undertake this task? We have many different organisations, new and old.
These companies are increasingly capable of running the terminals. They are running depots, not just terminals. However, it is true that there should be provisions for allowing foreign operators. But there should be a policy that mandates making local companies partners. This will also help develop expertise of local companies.
Local companies are capable of providing equipment for the Patenga Terminal. Giving this to foreign operators will be tantamount to compromising the country's own interest.
Capt Kamrul Islam Majumdar
Director, Bangladesh Inland Container Depot Association
The efficiency of the port should not be questioned, given how the growing volume of export and import commodities, especially from the garments sector, have been handled successfully. How exactly this was done can be scrutinised, but Chattogram port got the job done.
When the Chattogram Port received its first six containers by foreign ships, it did not have spreaders to discharge. From there, it has come a long way, and is now handling 3.2 million TEUs (twenty feet equivalent unit). This is a great achievement.
Those of us who run the inland container depots, assist the port [management]. We are very proud to say that we have contributed to the vast expansion of Bangladesh's garments export industry.
Before thinking about becoming a regional hub, we have to focus in the next 10 to 15 years on meeting the local demands for service. We have to develop infrastructure and change the way we operate. We have to think about whether we can increase our handling capacity.
We single handedly handled the huge volume of the readymade garment export. We processed, consolidated, put in containers, and delivered to port. This alleviated the pressure on the port massively.
The first obstacle to handling at the Chattogram Port is import release work. About 3,000 trucks come in everyday. This takes up a lot of space and creates a chaotic situation. If we are given the chance to handle import containers then we can work toward building capacity toward that goal.
Mohammad Hatem
Executive President, Bangladesh Knitwear Manufacturers and Exporters Association
The Bay Terminal project work should be sped up, so that we can reach our goal of reaching $100 billion readymade garments export by 2030.
Pangaon Inland Container Port is still being under-utilised. At least one ship should go to Chattogram from Pangaon per day. Freight forwarder and the shipping line should come forward to make this happen. This will help alleviate the pressure on the roads.
Kamalapur ICD (inland container depot) should be moved to Dhirasram, as this will optimise the shipment process for us.
Amirul Haque
Managing Director, SEACOM Group
You cannot simply bring in a foreing contractor for a KPA (key-point installation). This is not against foreign operators.
The Bay Terminal work must progress quickly. And we do not want any foreign operator for the Bay Terminal. The Chattogram Port should be in charge of the Bay Terminal with an associate company. It could be an associate company like a holding company.
You can not just buy shares of the Port of Singapore Authority. Similarly, you can't buy shares of the King Abdul Aziz Port if you just wish it. We can find out the modus operandi for how the Chittagong Port Authority will run the port or be the regulator. The stakeholders can talk about it.
We could have listed companies who will operate and shares can be bought by the public. Local companies are capable and we need policy support.
And in a conference like this all stakeholders should be present.
Mahfuzul Haque Shah
Former Director, The Chittagong Chamber Of Commerce and Industry (CCCI)
From one perspective, the Chattogram port doesn't have any problem. It is clearly operational. But from another perspective, there are some problems.
The root problem lies in limitation in the Board's capacity. The Board (National Board of Revenue) has to be accountable. Its financial capacity has to be increased for infrastructure development. There are always some officers of the Chittagong Port Authority (CPA) who have to be in Dhaka. This is not practised anywhere else in the world. Work should be done via online, otherwise it is a major decision making matter. The shipping minister should take the initiative so that this stops.
Complications surrounding HS Code should be resolved.
Kabir Ahmed
President, Bangladesh Freight Forwarders Association
Bangladesh can be a regional hub, but only if we address the prevalent issues. The Chattogram port already is a vibrant port. We have to explore the regional connectivity and evaluate if the port is ready to cater to the needs.
Customs is the main element, whether it is transit, transhipment, regional connectivity or making the Chattogram port a hub. Customs authorities should be easy to reach.
Air-sea or sea-air is a big business. A lot of shipments can come to the Chattogram port and then get transhipment by air.
If we want to make it a hub then we must provide warehouses to freight forwarders.
Syed Mohammad Arif
Chairman, Bangladesh Shipping Agents' Association
I think the Bay Terminal deserves the most amount of attention right now. If we can finish it, we will begin to get benefits immediately. And Matarbari is also important.
Ships often have to wait depending on the tides condition. Sometimes ships need to wait 12-13 hours, only for a two-hour discharge. And a ship pays Tk15-20 thousand for per day of wait. If the Bay Terminal gets operational, many big ships can embark there. Our costs will come down by a lot.
The rule for 10% increase per year of labour salary needs reassessment. It is not sustainable, as there is no limit to this increase.
Dr Rashed Al Mahmud Titumir
Professor and Chairman, Department of Development Studies, Dhaka University
Deltas are always rich in natural resources. We have to talk about how we will utilise these resources. But proper utilisation is not possible without mitigating or limiting risks.
You have to decide whether you will tilt one certain way or you will pursue inclusive independent policy. This is a big decision. You have to know if you want to be a Japan or an India or a China.
This discussion needs to be coordinated and holistic, so that we can create our Bay of Bengal masterplan. The discussion surrounding the port will be more fruitful if we can think about the issues in the context of our geographical and political realities.
Professor Ainul Islam
General Secretary, Bangladesh Economic Association
We need a sound assessment of where Bangladesh will be in 2030 and onwards. We have to think clearly about where we could be in 50 years or 100 years. 93% of the international trade is done through the Chattogram port.
We have a number of goals to reach by 2030. We will have to move toward high-value items, especially for export. We have to evaluate if we are ready for that.
We have to address irregularities, corruption, bureaucratic complexities and lack of safety at the Chattogram port that studies have found. The situation has improved but we have to be vigilant so that it does not regress.
Anjan Shekhar Das
Director, The Chittagong Chamber Of Commerce and Industry (CCCI)
The Chattogram and the Port Authority are very efficient. The port is ready to become a transhipment hub. There are challenges and obstacles that others pointed out.
The port is operational for 24/7. But the Customs does not have enough human resources. The capacity of Customs needs to improve.
The country is progressing toward development. We need ease of business. When we talk to foreign investors, they are aware of the obstacles.
Priti Chakraborty
Director, The Federation Of Bangladesh Chambers Of Commerce And Industry (FBCCI)
We are dealing with $52 billion export currently. But our goal is reaching $300 billion, in order to meet our Sustainable Development Goal (SDG) targets. So, we don't have a choice but to make the port a regional hub.
My proposal to you from the Federation is that we should consider PPP (public-private partnership) whenever we face obstacles.
Bangladesh now has a lot of big entrepreneurs. I believe, if you include them then that can help a lot in solving many of the problems.
Md Zafar Alam
Member, Administration and Planning, Chittagong Port Authority
If the Chattogram port was to become a regional hub, then among the key destinations would be the seven-sister states of India. But we have to ask if they have enough business volume.
The same is true for Bhutan and Nepal, as neither of the countries have a very large population. It would be difficult for the Chattogram port to become a short-haul shipping hub.
Expanding the shipping facility will not necessarily make it a hub, because businesses will choose wherever cost is lower. We need to study the market more.
Rear Admiral M Shahjahan
Chairman, Chittagong Port Authority
The Chattogram port began by handling six containers. Now we handle 3.2 million containers. Our growth is very high. We are gradually developing our capacity to adapt to this growth. We challenge our own performance every year, and we surpass ourselves every year.
We have very limited resources and what we try to do is to utilise these limited resources and provide the best possible service to our stakeholders.
During the Covid-perios, 41% of ships got berthing on arrival. We could do even more, but our port is tide-dependent. Currently, 80% of ships are berthing on arrival.
We are also not dependent on manual systems, our processes are now automated. Trucks used to get in after paying cash money, but now we have a vehicle management system and trucks can pay money in advance. We trained truck drivers.
We now have an electronic delivery system. But we need to educate people for this to work fully. A support staff of a shipping agent, for example, needs to be acquainted with this. Now Customs has to automate their processes.
An important point I want to mention that relates to the media is that we should not publish something that will have a negative impact on the reputation of the port and on the country's ease of doing business.
We get blamed for every negative thing related to the port. But what is often not understood is that we are actually not the only authority for the port. There are other bodies but people and media do not distinguish and we have to take blame for the mistakes of others.
The Sheikh Hasina government is a people-friendly government. The Chattogram port has been reorganised fully under her guidance. The port has changed. We can now release ships in 48 hours. In the past ships used to wait three to four days.
We are working according to the vision of our prime minister. She said, "We can serve as the economic hub for the sub-region. Beyond 162 million, Bangladesh can be the connecting landmass to a combined market of 3 billion people." So, that's our directive for making Chattogram port the sub-regional transhipment hub.
Khalid Mahmud Chowdhury
State Minister for Shipping
Honourable Prime Minister Sheikh Hasina did not just think about the maritime sector, she also took initiatives. The sector is slowly growing into a massive sector.
The Chattogram port has always had incremental development. There was never a master plan. By contrast, the Payra Port is being developed according to a plan.
There are a number of problems that have been mentioned. But these problems did not arise overnight. The National Board of Revenue may not be represented here today, but other government representatives are here. The government belongs to the people. The government is being accountable to those that are working.
When Matarbari is completed, it will automatically be a regional hub. We are already on the way to becoming a regional hub. We do have weaknesses in logistics. But this is being upgraded.
But there is another problem. The businesses do not want to recruit skilled people, because they have to be paid more than unskilled workers.
Some have expressed anxiety about foreign operators, but if we look at ourselves, everything we are wearing from head to toes are foreign. So, the question is which foreign operators should we be afraid of? We should be only afraid of predatory foreign operators.
The honourable Prime Minister does not compromise the country's interests. The port authority's duty is to look after the interests of the port and the government's duty is to protect the interests of the country.
The honourable Prime Minister's government is a patriotic government. You have to trust that stakeholders will not be harmed when this government is in power.
