Irrational enhancement of port charges

Our Ctg Correspondent Chittagong Metropolitan Chamber of Commerce and Industry (CMCCI) has been fighting for long against hike of tariff charges including un-stuffing, storage rent on FCL containers, wharf rent, hoisting charges etc. Traders especially the garments exporters have protested the move, held several meetings with the port authority and finally lodged complaints with the shipping ministry in 2009. The traders alleged that the government following the 111 of 2007 arbitrarily enhanced the tariff charges in the Chittagong Port by 300 times in one go without consulting with the stakeholders, which enraged the traders. They protested against the hike and held several meetings with the port authority officials but the port authority could not give any decision, said CMCCI acting president AM Mahbub Chowdhury. "We, on behalf of the Chittagong Metropolitan Chamber of Commerce and Industry and all importers and exporters of the country, especially of Chittagong region, have urged Chittagong Port Authority to cancel the government order on enhancement of charges in the port," Mr Mahbub Chowdhury said. He told the FE that the government after two years realized the irrational increase of port tariffs and decided to reduce it by at least 33 per cent in a meeting held at the Secretariat with the Shipping Minister Shajahan Khan in the chair. But the government could not implement it, he alleged adding that the Finance Minister has reportedly stalled the decision. When the democratic government assumed power in 2009 the exporters and importers took the issue with the government high-ups following which the minister of shipping Shajahan Khan convened a meeting with representatives of all concerned sectors. In the meeting the traders argued that the enhanced tariff will ultimately put a negative impact on the commodity prices. "When the CPA is suffering from persistent yard congestion the port authority during the caretaker government enhanced 300 per cent on container handling charges, space rent charges, reefer container charges, gantry charges, import and export charges etc compared to other regional ports in India, Pakistan and Sri Lanka," he said. This is simply irrational and unjustified, observed Mahbub Chowdhury, also advisor of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) for Port and Shipping who has been fighting against many irrational steps taken by Chittagong Port Authority for a long time. "I should say Chittagong Port has turned to be the most costly port in Asia, according to a report of the World Bank survey. The authority during the time of joint forces operation in the port during the last caretaker government enhanced 300 per cent charges that has put a negative impact on the prices of consumer goods." "At the backdrop of protest by the representatives of importers, exporters, industries and trade bodies the government decided to reduce the charges by 33 per cent of the enhanced rates in a meeting held in the Ministry of Shipping. A committee was also formed by the ministry to monitor implementation of the ministry's decision over the last two years," he said. "The decision for reducing 33% on the exorbitant rates of different port charges remains non-complied by the government as the ministry of finance did not approve it in the last two years," he alleged. Mr Chowdhury opined that the Port Authority Ordinance of 1976 under which the CPA is running should be thoroughly amended bestowing maximum authority to function smoothly and independently for the sake of national interest. "If the government wants Chittagong Port to be the regional hub which is located at a very strategic geo-political location in this part of the world, then this port should be developed to its full potential under the dynamic leadership of a man with full power and authority to work independently. But the reality is that the present port has no power at all. It can raise the tariff charges but fail to reduce the same. The country's prime sea port cannot run in this way. I am doubtful if this port will play the role of a regional hub when the entire South and Southeast regions are looking up to Chittagong Port to exploit the best of its potential," Mahbub Chowdhury said. Giving a comparative level of charges prevailing with the ports of the neighbouring countries he said, the shipping charges in import and export of a 20-feet container in India are US$ 200 and $ 150 respectively. The same charges in Pakistan ports are $ 239 and $ 115, in Sri Lanka $ 245 and $ 155 while in Chittagong Port they are $585 and $420 respectively. Handling charge of a 20-feet container in the Singapore Port is $ 106, in Malaysia $ 53, in India $ 80-90 and in Chittagong Port $ 200. Pakistan port of Karachi provides storage free time of 10 working days, in JNPT of India five working days excluding the weekly holidays and in Chittagong Port the storage free time is only four days including two weekly holidays and two days including holidays."unlike anywhere in the sub-continent we have two holidays in a week," he pointed out. Taking advantage of the enhanced charges fixed by the port authority the shipping agents and freight forwarders claim 300% extra rent on the container boxes. They don't follow any specific rule but make the charges free-style, Chowdhury alleged. He blamed the CPA for all these free-style activities and said the port authorities in other countries fix up the rates of the shipping agents and freight forwarders. It is only in Bangladesh that the port authorities remain away from monitoring activities of the shipping agents and forwarders. He cited example of America where the Federal Maritime Commission (FMC) fixes up all tariffs of the concerned agencies regarding the sea-borne trade of that country. The government of Bangladesh should authorize the port authorities to determine charges relating to sea-borne trade of Bangladesh, he suggested. Recent global recession has rather brought fortune for Bangladesh garments exporters. Following recession in most of the European countries and USA the buyers of these and some other countries have opted for cheaper varieties of RMG from Bangladesh. "It has helped the local RMG exporters. The recession in Europe and the USA, the two principal export markets of Bangladesh, reduced their income and consumption spending and consumers in these countries switched from expensive RMG items to cheaper varieties. Bangladesh garments industry cashed in on the increased demand helped by its low cost," Chowdhury observed.