PMO for removing barriers, cutting freight charges

The government has issued a set of instructions, including a cut in the freight charges, to make the Pangaon Inland Container Terminal (ICT) more operational and effective.
It also asked the authorities concerned to take steps for reducing existing tariffs for a certain period of time and frame a national policy in this regard.
The Prime Minister's Office (PMO) recently put forward the instructions based on a report on the river port on the outskirts of the capital that recommended removing barriers and making it fully operational. The FE obtained a copy of the report.
It also suggested removing the monopoly business by the existing lightering cargo vessels and a transport company, and taking steps to introduce container ships with a capacity of 100 TEUs (20-foot equivalent units) of containers besides the existing 150 TEUs ones.
The PMO has sent the report to the relevant ministries like commerce, shipping, fisheries and livestock, and public security division to take measures after examining the issues.
It also suggested forming a joint cell of high government officials to monitor the operations so that the port becomes capable of achieving the desired socio-economic goal.
Currently, the railway fares for container transportation are lower than that of the ship fares. As a result, importers and exporters are not that interested in using the port, said a source.
The inland haulage charge is levied by the Main Line Operator (MLO) for the inland waterway distance from Chittagong to Pangaon terminal, and an additional cost of truck or trailer rental to reach the final destination from Pangaon is more than the fares of road transportation, according to the report.
The shipping cost of import and export for a 10-tonne container to and from Pangaon ICT are US$132 and US$132 respectively, and an empty container is U$55, while the fare for transporting a container laden with import and export goods and an empty container to Dhaka ICD is U$114, U$58 and U$45 respectively.
Due to the high cost, the importers and exporters are not interested in using the port, according to the report.
The Pangaon-bound import container freight is determined by adding return empty fare due to exports at limited scale from the port. So, freight charges for containers handled at Pangaon are higher than normal charges.
Currently, there is no MLO and feeder vessel operator in the private sector of Bangladesh. Even Bangladesh Shipping Corporation (BSC) does not have this kind of capability.
The import-export activities at Pangaon ICT would have increased had there been such capability at the public or private sector in Bangladesh. Also, there is no policy that could have forced the foreign MLOs to use the Pangaon port.
It will be possible to reduce freight charges if the port utilisation increases substantially, suggested the report.
About 17 lighter vessels operate on the Chittagong Port-Pangaon route, which appears to be insufficient compared to the requirement. More vessels will be required If the use of Pangaon port increases, the report cited.
It mentioned that one or two shipping companies were making monopoly business on this route, and the use of any new company's ship is limited. The monopoly business has also caused the increased freight charges.
It suggested taking steps to check the monopoly business of the transport agency. The report viewed that a political decision should be taken to improve the environment of the terminal so that the port can be used by multiple transport agencies.
A transport company's trucks are being used to transport goods from the Pangaon ICT. As a result, an additional rent of Tk 4,000-5,000 has to be paid for each truck, according to the report.
Some Tk 4,000-5,000 from each export-bound vehicle and Tk 1,500-2,000 from each truck or trailer carrying imported goods are also being collected as illegal tolls by the local interest groups at Postogola Bridge, discouraging the importers and exporters from using the terminal.
The report has suggested upgrading the four kilometres link road from Postogola Bridge to Pangaon to four lanes.
Bangladesh Standards and Testing Institution (BSTI) office, quarantine centre, chemical laboratory facilities, etc. should be installed at the Pangaon ICT, added the report.
Officials at the ministries concerned said they were working on taking necessary steps to implement the PMO instructions.
The Pangaon ICT started operation on November 07, 2013. Bangladesh Inland Water Transport Authority (BIWTA) and the Chittagong Port Authority (CPA) have jointly built the inland terminal at a cost of Tk 1.54 billion.
The project aims to help ease the pressure of cargo movement from Dhaka to Chattogram on the railway and highway corridors.
The terminal has a storage capacity of 3,500 TEUs of containers and handles 116,000 TEUs containers annually.
Around 50-70 containers are now being handled at the port which is only 20 per cent of the capacity, the report mentioned.

[email protected]