Syful Islam
The World Bank (WB) has tagged a condition on operating New Mooring Container Terminal (NCT) under 'landlord' system with its proposed funding for construction of Karnaphuli Container Terminal (KCT), sources said.
The WB officials labelled the condition at a meeting at the ministry of shipping (MoS) Thursday where they made a presentation on a pre-feasibility study report on construction of 15 jetties in KCT of Chittagong port, they added.
A seven-member WB team led by Diep Nguyen-van Houtte, Senior Transport Specialist of Trade and Transport Facilitation, raised the issue at the meeting with MoS officials as the Chittagong Port Authority (CPA) recently floated tender for buying equipment for NCT violating a parliamentary committee recommendation.
The parliamentary committee on MoS in its first meeting on April 30 last had suggested that the CPA should not spend any money to procure equipment for the terminal as the NCT would be operated by private sector operators.
The 'landlord' system for a port operation means the government will only develop the infrastructure while the private sector will invest for buying equipment and operate it.
"Almost half the time of the meeting the WB team discussed the operational procedure of the NCT as they were aware of the CPA move to spend money to buy equipment for the terminal," said a participant of the meeting.
"At one stage they said they won't invest in the KCT if CPA spends any money for buying equipment for the NCT instead of letting the same be bought by private operators," he said.
Quoting the WB officials he said globally most of the big ports and terminals are now being operated by private sector operators where they themselves buy necessary equipment.
"Costs go up in public sector procurement while private operators buy equipment at much lower costs," he added.
MoS officials said operation of ports or terminals by private sector investment helps raise efficiency and output. "Competition rises when several private operators are there in a port and thus quality of service improves and output increases," said an official.
He said the WB team wants that at least one operator of NCT and two operators of KCT should be from the International Terminal Operators which will raise competition and quality of service.
The official also said the WB team has agreed in principle to provide US$ 5.0 million to carry out detailed feasibility study on KCT, dredging of rivers, and some other land ports.
"If in the meantime the issue of buying equipment for NCT by private operators is not ensured, the WB may not invest in the KCT," the official added.
Another official, quoting WB team members, said KCT has good potential. Once the terminal is developed, the turnaround time of the Chittagong port will decrease significantly and handling capacity of the country's prime seaport will reach 25 million TEUs (twenty-foot equivalent units).
He said the MoS has forwarded a project worth Tk 10 billion for the KCT. The amount may go up further after the detailed feasibility study. The proposed WB investment may face hurdle if the issue of buying equipment for NCT by private operators is not confirmed.
When contacted, CPA member Nazrul Islam told the FE Friday that he has received a directive from Finance Minister AMA Muhith to hold the tender procedure which was floated for buying equipment for NCT.
"Our chairman is now abroad on a visit. So a decision relating to holding back the tender procedure will be taken when he returns," he said.
In reply to a question he, however, said the WB team in a meeting with CPA officials last week did not raise the issue of operating NCT under the landlord system.
