Transit fees should be used to facilitate trade: Mashiur

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Sheikh Shahariar Zaman
Transit or transshipment fees should not be seen as a tool to augment revenue collection; rather it should be used for facilitating trade, Economic Affairs Adviser to the Prime Minister Dr Mashiur Rahman told the FE, referring to the principles of the WTO.
"The basic principle of economics is to supply goods at the lowest costs and if any such fees are applied, it will increase the costs and free flow of movement of goods will be hampered," he explained.
Speaking on the recent controversy over transit or transshipment fees announced by the National Board of Revenue (NBR), he said the main objective of transit is to facilitate trade and revenue is incidental to more trade.
"If more trade occurs, the national income will go up and eventually the government will get more tax," Dr Mashiur said.
The NBR in June slapped transit and transshipment fees to the tune of Tk 10,000 per container and Tk 1,000 per tonne for bulk cargo but on Thursday the SRO was withdrawn.
"The government has formed a committee which will evaluate and analyse everything and fix a charge considering the basic principles of economics and rules and regulations of WTO," he said adding, "It may be applicable from the next budget after the re-negotiation of protocol."
He said there will be a marginal cost to provide transit facility and Bangladesh should estimate it carefully and collect a charge for using the facility.
"Infrastructure including roads or railway network needs to be built to provide smooth movement of cargoes inside the country for transit purpose and the users will pay a toll to use the facility," he explained.
"The Indian government last fiscal gave Bangladesh Tk 42.5 million for river maintenance and the BIWTA earned over Tk 45 million as different charges under the Protocol on Inland Water Transit and Trade (PIWTT)," Dr Mashiur said.
A total of 1.28 million tonnes of cargoes were carried under the protocol in 2009-10 fiscal and 99 per cent of the vessels used were of Bangladeshi origin.
PIWTT had been in force since 1947, and was renewed in 1972 under which Indian cargoes can be shipped to North-eastern part of the neighbour through Bangladesh.
"Bangladesh did not sign any new transit agreement; rather it was agreed to find out honest use of protocol to fulfil its purpose," Dr Mashiur said.
About the implementation of joint communiqué declared by Prime Minister Sheikh Hasina and Indian Premier Dr Manmohan Singh, Dr Mashiur said there was a huge expectation from the declaration.
"But for the full implementation, a procedural change is needed and it takes time to do that," he said adding, "It will take time to develop Chittagong and Mongla as transit ports, infrastructure development for transshipment and other works."
He said there was some progress in importing electricity from India and Baharampur-Bheramara grid connection line will be completed within short time.
About regional integration, he said Nepal and Bhutan will use Mongla and Chittagong ports and their vehicles will carry the cargoes up to port to facilitate easy movement of goods.
"We will have to sign protocol agreements with Nepal and Bhutan under the same concept of PIWTT," he said.
A Bangladesh delegation will leave for Nepal and Bhutan on November 21 to finalise agreements with them, Dr Mashiur said.
"We are going to formulate the strategies by Sunday next and place them to the government high-ups for their consideration," he said.
Water, power and transit issues will be discussed with Nepal and power, transit and climate issues will be discussed with Bhutan, he added.