Deep seaport: Chinese funding proposal a roadblock?
appropriate steps to speed up constructi | Wednesday, 21 December 2011
appropriate steps to speed up constructi
of footdragging on it Syful Islam The construction of proposed deep seaport at Sonadia in Cox's Bazar district in the near future seems to have dim prospect as the present government is less interested to receive assistance from China for the project. The offer from state-run China Merchants Holdings International Company Ltd (CMHI) is reportedly being ignored as the officials at the ministry of shipping are not getting green signal from the highest authority of the government. The shipping ministry officials say unless the political bosses take up the issue seriously and respond to the Chinese offer immediately, Bangladesh in the future may experience tough problem in the future to secure fund to construct the planned port. The other development partners are observing how Bangladesh is handling the assistance offer and practically how serious the government is to go forward with the project, the officials said. In 2006, Japanese firm Pacific Consultant International (PCI) first conducted a feasibility study for the proposed seaport. The seaport at the first stage will have five international-standard jetties with the capacity to handle a total of 704.01 million tonnes of containers a year. The cost was then estimated at Tk 600 billion. The government has opted for building a deep-sea port at Sonadia as Chittagong seaport faces worsening congestion. Besides, Bangladesh has plan to make Sonadia a major regional shipping hub, catering to the demands of north-eastern India, Myanmar, Nepal, Bhutan and the southern Chinese province of Yunnan. Bangladesh sought Chinese funding for construction of the deep seaport during Prime Minister Sheikh Hasina's visit to China last year. The Chinese authorities responded positively at that time, but the issue has not seen much progress so far. Chinese ambassador to Bangladesh Zhang Xianyi in September this year said that his country was ready to help Bangladesh set up the deep seaport. The Chinese company sent draft of a memorandum of understanding (MoU) in June this year as part of the decision taken at a meeting with the officials of the Ministry of Shipping (MoS) on May 30 in Dhaka. In the draft of the MoU, the company sought one year time to carry out geographical, administrative and diplomatic assessment of the proposed deep seaport. During the period they will examine both financial and business models of the proposed port to assess its viability. The CMHI officials informed the shipping ministry officials that if the assessment result was found positive, they would sit for negotiations on the possible funding arrangement for the port. However, the CMHI is yet to receive any response from Bangladesh government regarding their proposal. After waiting for a reply for almost six months the Chinese company has wanted to know about Bangladesh's position regarding construction of the deep seaport with Beijing's assistance. In September this year the cabinet committee on economic affairs has sent back for further scrutiny a shipping ministry proposal regarding construction of the deep-sea port under public-private partnership (PPP) initiative. Officials of the shipping ministry said construction of the seaport with Chinese or local funding was a part of the public-private partnership (PPP) bid. Since the cabinet did not response positively regarding construction of the port under the PPP arrangement, taking Chinese help for the project has become uncertain. It was learnt that even the setting up of a deep seaport authority, which is a pre requisite for implementation of the project, still faces various complications. The move to setting up the deep seaport authority has received go ahead of the ministry of finance after waiting there several months. After that months have passed but the process is moving very slowly. Good news is there since two key ministries have offered their no-objection to signing of the MoU with the Chinese state-owned company regarding construction of the deep-sea port. Months back, the shipping ministry had sought opinion of the ministries' and departments concerned about the draft MoU sent by the CMHI whether to move forward in line with the terms and conditions of the MoU.The Economic Relations Division (ERD) of the Ministry of Finance gave the no-objection to the draft MoU without any change of the terms and conditions, while the Ministry of Law insisted on a minor change. Business people saythe construction of a deep seaport is very much necessary for Bangladesh as increased commercial activities and possible use of the Chittagong port by the neighbouring counties as transit point has squeezed the cargo handling capacity of the port. The Chittagong port has now a capacity to handle an aggregate volume of 1.6 million TEUs (twenty feet equivalent units). Against the capacity, it handles now 1.3 million tonnes, leaving a surplus capacity of 0.3 million tonnes a year. On the other hand, the Mongla port has the capacity of handling 50,000 TEUs of containers a year, but only 20,000 TEUs of sea-borne cargoes are now handled by it. Experts said the increasing trend of the country's expanding volume of sea-borne cargo will hardly leave any surplus capacity for using the existing port facilities by others as a transit point within the next three years' time. India wants to use the Chittagong port to carry cargoes to its 'seven sister states' of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland and Tripura. It also wants to use the port for exporting goods from theses states. Nepal and Bhutan are also interested to use the Chittagong and Mongla ports to transit their external trade activities. South Asian nations like Pakistan have deep seaport named Gwadar Port situated at Gwadar in Balochistan province. India has two deep seaports--Dhamra Port and Jawaharlal Nehru Port Trust in Mumbai, and it has three proposed deep seaport named -Krishnapatnam, Vizhinjam International Seaport in Kerala and port of Dahej in Gujarat. Sri Lanka has two deep seaports- Colombo port and newly built Hambantota port and Myanmar has two deep seaports Thilawa port, 25 km south of Yangon and Dawei Port in southern Myanmar. India has another proposed deep seaport named Vizhinjam International Seaport in Kerala, Burma has another deep seaport named Kyaukphyu. Information available show the deep sea port in Dawei of southern Myanmar has the potential to become the gateway to Indo-China and world's biggest industrial estate. The US$8.0 billion project comprising deep-water harbor facilities, an oil refinery and an industrial estate, which the Thai engineering giant will overlook for the next ten years. Officials concerned at the ministry of shipping believe that the number of deep seaports constructed by the South Asian nations as well as the ports under plans has also made the fate of the proposed Sonadia port bleak. They think that since a good number of deep seaports have so far been constructed and some are under planning, none of the other nations will use the deep seaport. So, the port may not be economically viable after construction. Apart from the views they also think that Bangladesh has fallen into the political pressure of neighbouring India and China. This nation hardly can take any decision independently without considering the other's policy. They said if Bangladesh takes Chinese help for the proposed deep seaport, it may antagonise India. So, the government is in a quandary how to go forward with the mega venture. Experts believe that whatever is in the mind of the government, it should make it clear and take appropriate steps about the construction of the deep sea port instead of getting it protracted. It will be beneficial for the people and the country.
of footdragging on it Syful Islam The construction of proposed deep seaport at Sonadia in Cox's Bazar district in the near future seems to have dim prospect as the present government is less interested to receive assistance from China for the project. The offer from state-run China Merchants Holdings International Company Ltd (CMHI) is reportedly being ignored as the officials at the ministry of shipping are not getting green signal from the highest authority of the government. The shipping ministry officials say unless the political bosses take up the issue seriously and respond to the Chinese offer immediately, Bangladesh in the future may experience tough problem in the future to secure fund to construct the planned port. The other development partners are observing how Bangladesh is handling the assistance offer and practically how serious the government is to go forward with the project, the officials said. In 2006, Japanese firm Pacific Consultant International (PCI) first conducted a feasibility study for the proposed seaport. The seaport at the first stage will have five international-standard jetties with the capacity to handle a total of 704.01 million tonnes of containers a year. The cost was then estimated at Tk 600 billion. The government has opted for building a deep-sea port at Sonadia as Chittagong seaport faces worsening congestion. Besides, Bangladesh has plan to make Sonadia a major regional shipping hub, catering to the demands of north-eastern India, Myanmar, Nepal, Bhutan and the southern Chinese province of Yunnan. Bangladesh sought Chinese funding for construction of the deep seaport during Prime Minister Sheikh Hasina's visit to China last year. The Chinese authorities responded positively at that time, but the issue has not seen much progress so far. Chinese ambassador to Bangladesh Zhang Xianyi in September this year said that his country was ready to help Bangladesh set up the deep seaport. The Chinese company sent draft of a memorandum of understanding (MoU) in June this year as part of the decision taken at a meeting with the officials of the Ministry of Shipping (MoS) on May 30 in Dhaka. In the draft of the MoU, the company sought one year time to carry out geographical, administrative and diplomatic assessment of the proposed deep seaport. During the period they will examine both financial and business models of the proposed port to assess its viability. The CMHI officials informed the shipping ministry officials that if the assessment result was found positive, they would sit for negotiations on the possible funding arrangement for the port. However, the CMHI is yet to receive any response from Bangladesh government regarding their proposal. After waiting for a reply for almost six months the Chinese company has wanted to know about Bangladesh's position regarding construction of the deep seaport with Beijing's assistance. In September this year the cabinet committee on economic affairs has sent back for further scrutiny a shipping ministry proposal regarding construction of the deep-sea port under public-private partnership (PPP) initiative. Officials of the shipping ministry said construction of the seaport with Chinese or local funding was a part of the public-private partnership (PPP) bid. Since the cabinet did not response positively regarding construction of the port under the PPP arrangement, taking Chinese help for the project has become uncertain. It was learnt that even the setting up of a deep seaport authority, which is a pre requisite for implementation of the project, still faces various complications. The move to setting up the deep seaport authority has received go ahead of the ministry of finance after waiting there several months. After that months have passed but the process is moving very slowly. Good news is there since two key ministries have offered their no-objection to signing of the MoU with the Chinese state-owned company regarding construction of the deep-sea port. Months back, the shipping ministry had sought opinion of the ministries' and departments concerned about the draft MoU sent by the CMHI whether to move forward in line with the terms and conditions of the MoU.The Economic Relations Division (ERD) of the Ministry of Finance gave the no-objection to the draft MoU without any change of the terms and conditions, while the Ministry of Law insisted on a minor change. Business people saythe construction of a deep seaport is very much necessary for Bangladesh as increased commercial activities and possible use of the Chittagong port by the neighbouring counties as transit point has squeezed the cargo handling capacity of the port. The Chittagong port has now a capacity to handle an aggregate volume of 1.6 million TEUs (twenty feet equivalent units). Against the capacity, it handles now 1.3 million tonnes, leaving a surplus capacity of 0.3 million tonnes a year. On the other hand, the Mongla port has the capacity of handling 50,000 TEUs of containers a year, but only 20,000 TEUs of sea-borne cargoes are now handled by it. Experts said the increasing trend of the country's expanding volume of sea-borne cargo will hardly leave any surplus capacity for using the existing port facilities by others as a transit point within the next three years' time. India wants to use the Chittagong port to carry cargoes to its 'seven sister states' of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland and Tripura. It also wants to use the port for exporting goods from theses states. Nepal and Bhutan are also interested to use the Chittagong and Mongla ports to transit their external trade activities. South Asian nations like Pakistan have deep seaport named Gwadar Port situated at Gwadar in Balochistan province. India has two deep seaports--Dhamra Port and Jawaharlal Nehru Port Trust in Mumbai, and it has three proposed deep seaport named -Krishnapatnam, Vizhinjam International Seaport in Kerala and port of Dahej in Gujarat. Sri Lanka has two deep seaports- Colombo port and newly built Hambantota port and Myanmar has two deep seaports Thilawa port, 25 km south of Yangon and Dawei Port in southern Myanmar. India has another proposed deep seaport named Vizhinjam International Seaport in Kerala, Burma has another deep seaport named Kyaukphyu. Information available show the deep sea port in Dawei of southern Myanmar has the potential to become the gateway to Indo-China and world's biggest industrial estate. The US$8.0 billion project comprising deep-water harbor facilities, an oil refinery and an industrial estate, which the Thai engineering giant will overlook for the next ten years. Officials concerned at the ministry of shipping believe that the number of deep seaports constructed by the South Asian nations as well as the ports under plans has also made the fate of the proposed Sonadia port bleak. They think that since a good number of deep seaports have so far been constructed and some are under planning, none of the other nations will use the deep seaport. So, the port may not be economically viable after construction. Apart from the views they also think that Bangladesh has fallen into the political pressure of neighbouring India and China. This nation hardly can take any decision independently without considering the other's policy. They said if Bangladesh takes Chinese help for the proposed deep seaport, it may antagonise India. So, the government is in a quandary how to go forward with the mega venture. Experts believe that whatever is in the mind of the government, it should make it clear and take appropriate steps about the construction of the deep sea port instead of getting it protracted. It will be beneficial for the people and the country.