FE Report
The Ministry of Shipping (MoS) has sought a block allocation equivalent to €54.31 million as equity for the Payra Port Authority (PPA) in the revised budget for the current fiscal year, officials said.
The ministry has sought equity funds aiming to create a joint venture company for dredging of the main channel of the seaport, they added.
The Payra port is one of government's fast-track projects. Its implementation deserves priority. To help implement the project successfully, development works have been divided into 19 components under short, medium and long-term plan, according to the PPA.
Of the components, dredging of the main channel is the most important and priority work.
The authority has already signed a memorandum of understanding (MoU) with a Belgium-based company, Jan De Nul NV (JDN), for capital dredging of the main channel of the seaport.
Besides, an agreement has been signed to create a joint venture company named "Payra Jan De Nul dredging company limited" after getting approval from the prime minister and the law ministry.
In line with Public-Private Partnership Law-2015, a process is underway to create the company.
Approximately €532.54 million worth of fund will be required in the first phase of the dredging project.
Equity will account for €106.48 million of €532.54 million. Of the total amount of equity, the PPA will have to provide €54.31 million.
"We have sought a block allocation for PPA in the revised budget for the fiscal year 2017-18," a high official of the shipping ministry said.
"The finance ministry has received a letter sent by the shipping ministry. It is now working on the issue," a desk official said.
The PPA signed a memorandum of understanding (MoU) in December 2016 with China Harbour Engineering Company Ltd (CHECL) on implementation of the core port infrastructure, and another MoU with China State Construction Engineering Company Ltd (CSCECL) on implementation of the component named riparian liabilities.
The port authority has set a target for a full-fledged operation of the country's third-largest seaport in Patuakhali district by 2019. Prime Minister Sheikh Hasina on November 19, 2013 formally inaugurated the port so that a limited operation could be carried out before the construction of the full-fledged port.
According to a feasibility study, conducted by British consultancy company Wallingford, construction of the full-fledged port may involve US$ 20 billion.
Of the amount, some $ 3.5 billion will be spent on capital dredging to make the port channel navigable. The rest of the money -- $ 16.5 billion -- will go for establishing connectivity of the port towards Dhaka through waterways and railways, buying equipment, and building terminals and jetties.
The study also said each year some $ 350 million will be needed for maintenance dredging of the port channel.
Officials said neighbouring India has already been allowed to use Chittagong and Mongla ports for carrying goods to its remote states via Bangladesh territory.
Bhutan and Nepal have also expressed interest to use these seaports.
The capacity of these seaports will go down in the near future, thus establishing the third seaport is a priority need of the country, they noted.
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