Reforms add new dimension to Chittagong Port
Sunday, 30 September 2007
Shahiduzzaman Khan
Some positive developments are taking place at the country's premier seaport. Once known as perennially dangerous, many ocean-going vessels are now favouring the port for calling at. Vibrancy in multiple activities has added new dimension to the port.
The Chittagong Customs House (CCH) was 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 turnaround time of vessels at the country's premier Chittagong port dropped and container handling rose substantially in the recent times. Regular monitoring by the joint forces and introduction of private operation contributed to the remarkable improvement in activities at the port. The vessel stay-time at jetties in August averaged 3.10 days against 3.26 days in July this year. But it was only 48 hours at the modern Chittagong Container Terminal (CCT) of the port during August. The CCT is equipped with sophisticated rail-mounted quay gantry cranes and other modern facilities. The container handling rose by 8.8 per cent in August over that of July. The port handled a total of 85,116 containers of twenty-foot equivalent Units (TEUs) in August against 78,540 containers in July. The number of container vessels called at the port also rose in August in comparison with the month of July.
Feeder vessels, which ply mainly on Singapore-Chittagong route called at the port a total of 79 times during the month of August against 73 times in July. The privatisation of services by the CPA and regular close monitoring by the joint forces have improved the port situation. The ships' stay-time has been falling since the proclamation of state of emergency in January 11 this year. The vessel stay time at the port was 3.60 days in June and 3.48 days in May.
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 rule in January this year. 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.
So long, 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.
Indeed, port congestion, corruption, and inefficiency have been causing the economy a net loss of over $1.0 billion annually. The development agencies have even put the loss at a much higher level - between one and two per cent of the country's GDP. Port inefficiencies also lead to other losses, which becomes difficult to recover within a short period of time. 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 at 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'.
In a study on Dhaka-Chittagong Economic Corridor Development (DCEC), a government and ADB-funded project, the Bank said the country will see a hefty 30 per cent increase in export by simply making the port more efficient. It also said lack of port infrastructure and services are the key impediments to growth of export and investment as the port continues to be one of the slowest, most inefficient and costly in Asia. Chittagong Port can be turned into the economic hub of Bangladesh, eastern India, Myanmar, Nepal and Bhutan by upgrading it from the sub-regional cooperation perspective. As such, it is necessary to improve rail, road and inland water transportation linked with the port.
Country's rail network is poorly utilised by any international standard while Dhaka-Chittagong main road cannot handle container lorries due to capacity constraints. Initiative for sub-regional cooperation by the DCEC is expected to give a boost to trade and transit traffic from neighbouring countries. Besides, it will need a multi-lane access road as well as upgrading of the existing roads between Dhaka and Chittagong, high-speed direct railway, and high-speed ferry service connecting Chittagong with other river ports. It is expected that the ongoing automation and infrastructural development at Chittagong Port would cut the vessel turnaround time to less than 24 hours from existing 3-4 days.
There is the likelihood of a four-fold traffic growth by 2020. As such, there is a need for massive infrastructure development in Chittagong Port including deepwater facilities and enhanced capacity to handle growing containerised traffic. As a principal transport corridor of Bangladesh, the DCEC provides potential sub regional linkages to northern states of India and via Jamuna Bridge to West Bengal as well as to Bhutan and Nepal. Bangladesh has high potential, particularly through the development of DCEC, to become a transport/transshipment centre for the entire SASEC (South Asia Sub-regional Economic Co-operation). The SASEC grouping involves Bangladesh, Bhutan, India and Nepal.
Bangladesh can turn Chittagong Port a revenue generating port if it is properly overhauled in view of landlocked Nepal, Bhutan and eastern states of India. The proposed 133km highway linking Bangladesh and Myanmar will also put Chittagong Port and the corridor in the centre stage with the connection of 40 countries. Currently, the seaport handles 28 million tonnes of cargoes and 1.0 million TEUs of containers which might go up to 100 million tonnes and 3.0 million TEUs respectively by 2020.
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 its needed function, and the country will continue to suffer for its poor business climate.
Some positive developments are taking place at the country's premier seaport. Once known as perennially dangerous, many ocean-going vessels are now favouring the port for calling at. Vibrancy in multiple activities has added new dimension to the port.
The Chittagong Customs House (CCH) was 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 turnaround time of vessels at the country's premier Chittagong port dropped and container handling rose substantially in the recent times. Regular monitoring by the joint forces and introduction of private operation contributed to the remarkable improvement in activities at the port. The vessel stay-time at jetties in August averaged 3.10 days against 3.26 days in July this year. But it was only 48 hours at the modern Chittagong Container Terminal (CCT) of the port during August. The CCT is equipped with sophisticated rail-mounted quay gantry cranes and other modern facilities. The container handling rose by 8.8 per cent in August over that of July. The port handled a total of 85,116 containers of twenty-foot equivalent Units (TEUs) in August against 78,540 containers in July. The number of container vessels called at the port also rose in August in comparison with the month of July.
Feeder vessels, which ply mainly on Singapore-Chittagong route called at the port a total of 79 times during the month of August against 73 times in July. The privatisation of services by the CPA and regular close monitoring by the joint forces have improved the port situation. The ships' stay-time has been falling since the proclamation of state of emergency in January 11 this year. The vessel stay time at the port was 3.60 days in June and 3.48 days in May.
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 rule in January this year. 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.
So long, 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.
Indeed, port congestion, corruption, and inefficiency have been causing the economy a net loss of over $1.0 billion annually. The development agencies have even put the loss at a much higher level - between one and two per cent of the country's GDP. Port inefficiencies also lead to other losses, which becomes difficult to recover within a short period of time. 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 at 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'.
In a study on Dhaka-Chittagong Economic Corridor Development (DCEC), a government and ADB-funded project, the Bank said the country will see a hefty 30 per cent increase in export by simply making the port more efficient. It also said lack of port infrastructure and services are the key impediments to growth of export and investment as the port continues to be one of the slowest, most inefficient and costly in Asia. Chittagong Port can be turned into the economic hub of Bangladesh, eastern India, Myanmar, Nepal and Bhutan by upgrading it from the sub-regional cooperation perspective. As such, it is necessary to improve rail, road and inland water transportation linked with the port.
Country's rail network is poorly utilised by any international standard while Dhaka-Chittagong main road cannot handle container lorries due to capacity constraints. Initiative for sub-regional cooperation by the DCEC is expected to give a boost to trade and transit traffic from neighbouring countries. Besides, it will need a multi-lane access road as well as upgrading of the existing roads between Dhaka and Chittagong, high-speed direct railway, and high-speed ferry service connecting Chittagong with other river ports. It is expected that the ongoing automation and infrastructural development at Chittagong Port would cut the vessel turnaround time to less than 24 hours from existing 3-4 days.
There is the likelihood of a four-fold traffic growth by 2020. As such, there is a need for massive infrastructure development in Chittagong Port including deepwater facilities and enhanced capacity to handle growing containerised traffic. As a principal transport corridor of Bangladesh, the DCEC provides potential sub regional linkages to northern states of India and via Jamuna Bridge to West Bengal as well as to Bhutan and Nepal. Bangladesh has high potential, particularly through the development of DCEC, to become a transport/transshipment centre for the entire SASEC (South Asia Sub-regional Economic Co-operation). The SASEC grouping involves Bangladesh, Bhutan, India and Nepal.
Bangladesh can turn Chittagong Port a revenue generating port if it is properly overhauled in view of landlocked Nepal, Bhutan and eastern states of India. The proposed 133km highway linking Bangladesh and Myanmar will also put Chittagong Port and the corridor in the centre stage with the connection of 40 countries. Currently, the seaport handles 28 million tonnes of cargoes and 1.0 million TEUs of containers which might go up to 100 million tonnes and 3.0 million TEUs respectively by 2020.
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 its needed function, and the country will continue to suffer for its poor business climate.