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Taking a tougher stance on default loans

Focus on Chattogram

Chattogram Correspondent | December 11, 2018 00:00:00

Nurul Qayyum Khan

Private off-docks have become an integral part of the domestic port services. To address the ever-growing demand for the country's export and import, the inland container depots (ICDs) which are called off-docks, are contributing immensely to the port activities and services, thus contributing to the national economy. As the port services are growing, the country will require more off-docks to augment the services. The Chittagong Port is the lifeline of the country's exports and imports and is serving the nation for more than 100 years. But the off-docks have emerged as the secondary port or ports in the port, as the most dependable helping organ of the port. Although the concept of ICD developed in the middle of the last century, the ICD sector in Bangladesh started its journey in mid-1980s. They handle containers laden with import and export cargoes.

These are the crux of disclosures, made by Bangladesh Inland Container Depots Association (BICDA) President Nurul Qayyum Khan in an interview with The Financial Express marking the FE's stepping into the 26th year of publication.

Briefing on the ICD activities, Nurul Qayyum Khan, who is also Chairman of QNS Container Services Ltd, further said when the containerisation in shipping started getting introduced in 1981 the Chittagong Port got adapted to the newly-introduced process of the global supply chain, which encouraged exporters and importers to transport cargoes in containers across the international borders at sea. At that crucial juncture the Chittagong Port Authority requested the local entrepreneurs to invest in the sector by setting up ICDs.

The businessmen at that time were hardly familiar with the new idea of ICD and they were not interested in venturing into this area. From 1985 to 1998, at least five ICDs were set up and they handled only empty containers. In 1998, the ICDs started handling export goods: storage of export goods in the Cargo Freight Stations (CFS), stuff them into containers and dispatch the containers to the port for shipment. In 2007, the ICDs started handling a selected number of containerised bulk imported goods. The ICDs are now handling 91 per cent containerised export goods and 28 per cent containerised import goods.

There are 19 ICDs operating with the licences of the Chittagong Customs House. There is a customs station/cell in every ICD headed by a deputy commissioner/assistant commissioner and also comprising a group of revenue officers or assistant revenue officers of the CCH. All activities of the ICDs are fully controlled by customs officials while import assessment and duty collection, if any, are done at the Chittagong Customs House.

Hailing the recently-signed Bangladesh-India bilateral agreement on port use, Mr Khan, founder and current president of BICDA, said it was a good bilateral step, since it would benefit both the countries.

"Our country can benefit" through earning more revenue from transhipment of Indian cargoes. The Chittagong Port Authority has also said its cargo handling capacity will grow further with construction of the Bay Terminal and other terminals, he opined.

Business between the two countries would be cost-effective. "Both of us will have to take measures for development and widening of the roads" so that the roads can contain the huge volume of cargo - both inbound and outbound. Roads connecting the northeast seven-sister states of India need to be developed alongside dredging of the coastal rivers for smooth plying of vessels. Indian cargo carriers are "too heavy for our roads to take the extra load and pressure". They need to shoulder the greater responsibility in this regard, he mentioned.

The veteran trade body leader and commercially important person (CIP) for two consecutive times - 2015 and 2016, said there is a large bilateral trade imbalance in favour of India. The huge trade gap should be reduced to a great extent by the way of raising the volume of their imports and by lifting the tariff barriers. As regards capability of local ports to take the extra load of the Indian cargoes, "all I can say is that we can take the load but we will have to expand our port facilities. My view is that participation of global port operators and the foreign investments are required for our port development projects and running of its administration under close government monitoring", he said.

The government has taken a lot of projects and many of them are under construction. These projects will be completed in 2/3 years. The work on the Patenga Container Terminal is running fast while the work on the Bay Terminal is set to start initially with the construction of the delivery yard. At the same time, the projects for strengthening capacity of Mongla Port through continuous dredging, infrastructure development of Pangaon Terminal needs to be undertaken in phases. What is most important is that an international standard tariff regime for using the ports of Bangladesh by India should also be applicable, he said.

Praising the government policy for attracting investment from home and abroad, he said an open door policy has been adopted in the country, so investment is likely to come as expected through the Bangladesh Economic Zones Authority (BEZA) and the Bangladesh Export Processing Zones Authority (BEPZA). Foreign investors are looking for huge investments in Bangladesh as the government has liberalised the policy for alluring investments.

"I think the commercial banks both in the public and private sectors are not following the dictates of the Bangladesh Bank regarding the rate of interest on industrial and commercial loans. The rate of interest is the highest in the country compared to other developing countries in the world. For investment of any sort the interest rate should be 6.0-7.0 per cent. Although the government has instructed the commercial banks to bring down the interest rate to a single digit (9.0 per cent), it is not being followed by most of the banks.

The government should take it seriously to compel the banks and financial institutions to abide by the rules and regulations of the government. The case may be same with the huge default loans lying with dishonest borrowers. The wilful defaulters should be brought to book and the money borrowed from the banks must be realised at the cost of anything. The rules regarding realisation of the money in the existing Artha Rin Adalat must be made harsher which will effectively help the lenders and the concerned authorities in the government. Management of the concerned banks must also be held accountable for their misdeeds or evil motive.


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