Premier port needs further reform
Thursday, 5 July 2007
Shahiduzzaman Khan
News Analysis
Some positive developments are taking place at the country's premier seaport. Once avoided as perennially dangerous one, many ocean-going vessels are now favouring the port for calling at. Vibrancy in multiple activities has added new dimension to the port.
A report published in the FE this week suggested that the Chittagong Customs House (CCH) has been segregated in line with the government's ongoing tax-administration reforms. An ever-growing volume in the shipments of both exports and imports through the Chittagong port prompted the authorities to separate the existing commissionerate into two entities. Nearly 80 per cent of the country's total imports and more than 90 per cent of the total export enter and exit through the seaport.
The creation of two separate commissionerates is expected to accelerate the overall customs clearance procedures and help boost the government's revenue collection. At present, about 35 per cent of the government's tax revenue and nearly 80 per cent of the customs duties are earned
Shahiduzzaman Khan
Some positive developments are taking place at the country's premier seaport. Once avoided as perennially dangerous one, many ocean-going vessels are now favouring the port for calling at. Vibrancy in multiple activities has added new dimension to the port.
A report published in the FE this week suggested that the Chittagong Customs House (CCH) has been segregated in line with the government's ongoing tax-administration reforms. An ever-growing volume in the shipments of both exports and imports through the Chittagong port prompted the authorities to separate the existing commissionerate into two entities. Nearly 80 per cent of the country's total imports and more than 90 per cent of the total export enter and exit through the seaport.
The creation of two separate commissionerates is expected to accelerate the overall customs clearance procedures and help boost the government's revenue collection. At present, about 35 per cent of the government's tax revenue and nearly 80 per cent of the customs duties are earned from the Chittagong zone alone. Although two customs houses will initially function at the existing Customs House building, one commissionerate will be shifted to a nearby place soon.
In fact, the move to separate the Chittagong Customs House into two wings was initiated last year. It could not be implemented due to some technical problems, especially with regard to placement of officials and employees for the two administrations. Besides, a vested coterie was also active to nullify any development works relating to Chittagong port.
Available reports suggest that port efficiency has increased by 30 per cent and cost of running business has been reduced by 40 per cent since the proclamation of emergency in January this year. The turnaround time of ships calling at the port has been reduced to 4.48 days in June compared to 11.65 days in January this year. The rate of handling of vessels at the port has also accelerated -- 86 in April against 70 in January last. There is no congestion of ships at the port despite remarkable rise in cargo handling.
In fact, no magic worked here behind the scene. The change occurred with the same groups of people who worked inside the port before proclamation of the emergency. Soon after the deployment of the army personnel to help the civil administration on 11 January this year, a taskforce under the joint forces began assisting the port officials in running the facilities. They reviewed the problems with all the stakeholders and got hold of the corrupt trade union leaders, port officials and other criminals. Private operators, who were not allowed to work by the so-called union leaders, quickly got going with the job as part of the reform measures, and suddenly, the improvements were visible.
Now there is no waiting for the vessels at the outer anchorage. Ships now can enter the Karnaphuli channel straight, without wasting any time at the outer anchorage. It means a tremendous improvement and saving for the shipping companies because the cost of waiting for a medium-size vessel at the outer anchorage is estimated between $10,000 and $15,000 a day.
Previously, the image of the Chittagong Port suffered badly and the port users paid the penalty. They were forced to pay 20 to 22 per cent higher freight charges than what is being charged for other ports of similar distance by the shipping companies and the port users can do nothing about it. The World Bank (WB) and the Asian Development Bank (ADB) made repeated appeals to Bangladesh to rein in the highly politicised trade union leaders and improve port functioning. But the situation only kept worsening.
According to a Transparency International's (TI) study, a staggering amount of over Tk 9.43 billion had been realised from the importers and exporters at the Chittagong Port during the year 2006 as bribe. The report says that the port users had to bribe at least at 30 points in the Chittagong Port and Chittagong Customs House. Reports say that while the incidents of bribing have become less visible since the declaration of emergency but the malpractice has not stopped - bribery has gone 'underground'. The trade union leaders also want to control port activities at their whims. State of emergency suspended all trade union activities. There are 29 trade unions at the Chittagong Port but only nine of them are registered. Five trade union bodies represent the employees of the Chittagong Port Authority (CPA) and the workers belonging to the Dock Management Board are represented through another four. But the CPA has no authority over the 20 other trade union bodies. Most of these trade unions should be banned.
The smooth and efficient functioning of Chittagong port is crucial to the country's continued development. As long as the port remains hostage to the extortion and bribery of port and customs officials, it will never be able to perform optimally its needed function, and the country will continue to suffer for its poor business climate.
A radical reform needs to be implemented to make Chittagong port highly efficient. Transparency and accountability need to be ensured. In addition, the cumbersome procedure still being practised to clear the documents at the port and the customs house also need to be reformed. Once this is done, the degree of corruption would come down substantially. The premier port may then compete with neighbouring Colombo and Singapore ports in every count.
News Analysis
Some positive developments are taking place at the country's premier seaport. Once avoided as perennially dangerous one, many ocean-going vessels are now favouring the port for calling at. Vibrancy in multiple activities has added new dimension to the port.
A report published in the FE this week suggested that the Chittagong Customs House (CCH) has been segregated in line with the government's ongoing tax-administration reforms. An ever-growing volume in the shipments of both exports and imports through the Chittagong port prompted the authorities to separate the existing commissionerate into two entities. Nearly 80 per cent of the country's total imports and more than 90 per cent of the total export enter and exit through the seaport.
The creation of two separate commissionerates is expected to accelerate the overall customs clearance procedures and help boost the government's revenue collection. At present, about 35 per cent of the government's tax revenue and nearly 80 per cent of the customs duties are earned
Shahiduzzaman Khan
Some positive developments are taking place at the country's premier seaport. Once avoided as perennially dangerous one, many ocean-going vessels are now favouring the port for calling at. Vibrancy in multiple activities has added new dimension to the port.
A report published in the FE this week suggested that the Chittagong Customs House (CCH) has been segregated in line with the government's ongoing tax-administration reforms. An ever-growing volume in the shipments of both exports and imports through the Chittagong port prompted the authorities to separate the existing commissionerate into two entities. Nearly 80 per cent of the country's total imports and more than 90 per cent of the total export enter and exit through the seaport.
The creation of two separate commissionerates is expected to accelerate the overall customs clearance procedures and help boost the government's revenue collection. At present, about 35 per cent of the government's tax revenue and nearly 80 per cent of the customs duties are earned from the Chittagong zone alone. Although two customs houses will initially function at the existing Customs House building, one commissionerate will be shifted to a nearby place soon.
In fact, the move to separate the Chittagong Customs House into two wings was initiated last year. It could not be implemented due to some technical problems, especially with regard to placement of officials and employees for the two administrations. Besides, a vested coterie was also active to nullify any development works relating to Chittagong port.
Available reports suggest that port efficiency has increased by 30 per cent and cost of running business has been reduced by 40 per cent since the proclamation of emergency in January this year. The turnaround time of ships calling at the port has been reduced to 4.48 days in June compared to 11.65 days in January this year. The rate of handling of vessels at the port has also accelerated -- 86 in April against 70 in January last. There is no congestion of ships at the port despite remarkable rise in cargo handling.
In fact, no magic worked here behind the scene. The change occurred with the same groups of people who worked inside the port before proclamation of the emergency. Soon after the deployment of the army personnel to help the civil administration on 11 January this year, a taskforce under the joint forces began assisting the port officials in running the facilities. They reviewed the problems with all the stakeholders and got hold of the corrupt trade union leaders, port officials and other criminals. Private operators, who were not allowed to work by the so-called union leaders, quickly got going with the job as part of the reform measures, and suddenly, the improvements were visible.
Now there is no waiting for the vessels at the outer anchorage. Ships now can enter the Karnaphuli channel straight, without wasting any time at the outer anchorage. It means a tremendous improvement and saving for the shipping companies because the cost of waiting for a medium-size vessel at the outer anchorage is estimated between $10,000 and $15,000 a day.
Previously, the image of the Chittagong Port suffered badly and the port users paid the penalty. They were forced to pay 20 to 22 per cent higher freight charges than what is being charged for other ports of similar distance by the shipping companies and the port users can do nothing about it. The World Bank (WB) and the Asian Development Bank (ADB) made repeated appeals to Bangladesh to rein in the highly politicised trade union leaders and improve port functioning. But the situation only kept worsening.
According to a Transparency International's (TI) study, a staggering amount of over Tk 9.43 billion had been realised from the importers and exporters at the Chittagong Port during the year 2006 as bribe. The report says that the port users had to bribe at least at 30 points in the Chittagong Port and Chittagong Customs House. Reports say that while the incidents of bribing have become less visible since the declaration of emergency but the malpractice has not stopped - bribery has gone 'underground'. The trade union leaders also want to control port activities at their whims. State of emergency suspended all trade union activities. There are 29 trade unions at the Chittagong Port but only nine of them are registered. Five trade union bodies represent the employees of the Chittagong Port Authority (CPA) and the workers belonging to the Dock Management Board are represented through another four. But the CPA has no authority over the 20 other trade union bodies. Most of these trade unions should be banned.
The smooth and efficient functioning of Chittagong port is crucial to the country's continued development. As long as the port remains hostage to the extortion and bribery of port and customs officials, it will never be able to perform optimally its needed function, and the country will continue to suffer for its poor business climate.
A radical reform needs to be implemented to make Chittagong port highly efficient. Transparency and accountability need to be ensured. In addition, the cumbersome procedure still being practised to clear the documents at the port and the customs house also need to be reformed. Once this is done, the degree of corruption would come down substantially. The premier port may then compete with neighbouring Colombo and Singapore ports in every count.