The deep-seaport at Sonadia
Wednesday, 1 December 2010
CONSTRUCTION of a deep-seaport in the Bay of Bengal has been high on the agenda of the government in recent years. But the main constraints to starting its implementation have been finding out a suitable location and lining up necessary funds. The first constraint-a suitable location-is now removed. Both feasibility study and site selection have already been completed. Sonadia Island, off the Cox's Bazaar coastline, has been selected for the deep-seaport. The government has reportedly prepared a draft act for the creation of a deep-seaport authority that would be responsible, among others, for mobilizing a substantial amount of fund for the multi-billion dollar project.
The country needs a deep-seaport to handle its ever-increasing external trade and offer port facilities to some other neighbouring countries, including India, China and Myanmar. Businesses are not at all satisfied with the performance of the country's seaports, particularly that of Chittagong. The problems such as higher turnaround time, lack of adequate modern handling facilities and labour unrest have been taking a heavy economic toll on the port users. The unhealthy port situation is among the factors that push up the cost of doing business in Bangladesh. The businesses have, time and again, sought effective remedial measures to address such problems. But the situation, barring some occasional and short-lived improvements, has remained largely the same.
In this context, the proposed deep-seaport at Sonadia if and when established, is likely to help the port users, in terms of money and time. It is estimated that the businesses using the port would get a 15 per cent cost-relief, thus, helping them to become competitive in the global market. Besides, the port would have the potential to become a major business hub in the South Asian region because of its proximity to two emerging global economic superpowers, India and China. Though the proposed deep-seaport authority would fix charges and fees for using the facilities of the future port, it is most likely that a private operator of international reputation or a consortium of them would be appointed through open bidding for its management. The involvement of such an international operator is expected to ensure both efficiency and cost in handling of cargoes, containerized and bulk.
However, all these high hopes would mean nothing until funds, estimated at Tk. 550 billion (nearly $8.0 billion at the current exchange rate) for implementation of the deep-seaport, can be mobilized from both domestic and external sources. The government is contemplating to raise funds from the local capital market through issuance of bonds and stocks. But the timely implementation of the capital-intensive project would largely depend on the availability of funds from external sources. Non-availability of such funds in time would obviously lead to project cost escalation, which is a common phenomenon in the case of most public sector development projects in Bangladesh.
It has been reported by the media that China has officially shown interest in the construction of the deep-seaport and the Bangladesh authorities have also responded positively to this. However, the government is also likely to make efforts to tap other sources of funding, including multilateral lenders, for the project, the full implementation of which would take a considerable period of time. It will involve a great deal of extra-ordinary efforts on the part of the government - and that too involving quality skill -- for negotiating all matters relating to funding, implementation and management of the deep seaport because of its economic and strategic importance. There should be no reasons on its part to rush through while taking decisions in the case of such a project. It should make every effort to take rational, consistent and sound decisions at every decisive phase, taking the best interests of the country, from medium- and long-term perspectives, into consideration.
The country needs a deep-seaport to handle its ever-increasing external trade and offer port facilities to some other neighbouring countries, including India, China and Myanmar. Businesses are not at all satisfied with the performance of the country's seaports, particularly that of Chittagong. The problems such as higher turnaround time, lack of adequate modern handling facilities and labour unrest have been taking a heavy economic toll on the port users. The unhealthy port situation is among the factors that push up the cost of doing business in Bangladesh. The businesses have, time and again, sought effective remedial measures to address such problems. But the situation, barring some occasional and short-lived improvements, has remained largely the same.
In this context, the proposed deep-seaport at Sonadia if and when established, is likely to help the port users, in terms of money and time. It is estimated that the businesses using the port would get a 15 per cent cost-relief, thus, helping them to become competitive in the global market. Besides, the port would have the potential to become a major business hub in the South Asian region because of its proximity to two emerging global economic superpowers, India and China. Though the proposed deep-seaport authority would fix charges and fees for using the facilities of the future port, it is most likely that a private operator of international reputation or a consortium of them would be appointed through open bidding for its management. The involvement of such an international operator is expected to ensure both efficiency and cost in handling of cargoes, containerized and bulk.
However, all these high hopes would mean nothing until funds, estimated at Tk. 550 billion (nearly $8.0 billion at the current exchange rate) for implementation of the deep-seaport, can be mobilized from both domestic and external sources. The government is contemplating to raise funds from the local capital market through issuance of bonds and stocks. But the timely implementation of the capital-intensive project would largely depend on the availability of funds from external sources. Non-availability of such funds in time would obviously lead to project cost escalation, which is a common phenomenon in the case of most public sector development projects in Bangladesh.
It has been reported by the media that China has officially shown interest in the construction of the deep-seaport and the Bangladesh authorities have also responded positively to this. However, the government is also likely to make efforts to tap other sources of funding, including multilateral lenders, for the project, the full implementation of which would take a considerable period of time. It will involve a great deal of extra-ordinary efforts on the part of the government - and that too involving quality skill -- for negotiating all matters relating to funding, implementation and management of the deep seaport because of its economic and strategic importance. There should be no reasons on its part to rush through while taking decisions in the case of such a project. It should make every effort to take rational, consistent and sound decisions at every decisive phase, taking the best interests of the country, from medium- and long-term perspectives, into consideration.