Transport planning and business competitiveness go hand in hand
Thursday, 8 April 2010
Enayet Rasul Bhuiyan
Remaining successful in business or winning more market shares, essentially involves reducing the costs of doing business. The economy of a country should aim to become more and more competitive to flourish internally and specially to promote its external trade. According to a report of the Asian Development Bank (ADB), the Bangladesh economy can gain 1.0 per cent rise in its total economic output and 20 per cent in foreign trade if the different modes of transportation only in the Dhaka-Chittagong corridor are made more efficient.
The study also significantly revealed that the overall informal payments and other inefficiencies add up to 40 per cent to transport-related costs for imports in the country. Thus, the case for streamlining the transportation in the Dhaka-Chittagong corridor, should be obvious. Not only in this particular corridor, similar transportation-related improvement needs to be achieved throughout the country. This will call for significantly adding to the number of transportation-related infrastructures, their maintenance and various supportive functions including the elimination of the tolls and other man-made abuses.
Indeed, transportation is counted as a major cost of business. The countries that have developed or are noted for moving up in the economic ladder, owe a lot to successful transport planning. Transport planning can involve many things from building shortest road, rail or waterway systems for the dispatch of cargoes to identifying and promoting the cheapest medium of transports and integrating them to the needs of various users. For example, waterways may be relatively cheaper for the haulage of cargoes of the readymade garments (RMG) sector in Bangladesh. But speed of delivery requires their transportation through land routes whereas other importers or producers not bothered by the need for fast freighting can opt for the cheaper waterways. Thus, different categories of users can use different mediums of transport suitable to them but each of these mediums need to discharge their utility efficiently for the optimum benefits of businesses.
The functioning of the Chittagong port was reported to have much improved during the last couple of years . The immediate past caretaker government gave focused attention to improving the operation of this port in all respects . The results were found to be very impressive. The time to unload cargoes and to leave the port was reduced to a little over one day. The earlier congestion completely disappeared and foreign shipping companies started taking lower charges while coming to Chittagong port after knowing about its improvements and the reduced risks of calling on it.
The challenge now is to retain and build upon the improvements achieved by the past government and not to allow anything that would lead to the reappearance of the old troubles in this premier port of the country.
There are more things to be done to get the maximum benefits out of improving conditions at Chittagong port. A suggestion has come from businesses that along with further improvement in the port's functioning and adding to its capacities, the government should adopt a plan with no loss of time to build at least one expressway in the strategic business corridor between Dhaka and Chittagong. The plan on its implementation can lead to saving of millions of taka annually for businesses from substantial reduction of transportation costs.
The reduction of this cost will be only one aspect of the benefits from this project. The competitiveness of the export-oriented industries, specially garments, would increase significantly after it is built. The expressway would help mightily in shortening the crucial lead time for garments exporters in both carrying imported raw materials to production destinations swiftly and similarly cut down on the time to reach finished products at the port for loading on ships. Not only costs would fall for industries geared to exports, transportation costs of all types of consumer and essential goods from Chittagong would likely fall notably from their faster dispatch and hence reduced transportation costs.
The projected four-lane expressway exclusively for business will cut down the time of movement between Dhaka and Chittagong for business cargoes by nearly four hours. It takes an average of at least seven hours now for a container-laden truck to reach Chittagong from Dhaka using the existing Dhaka-Chittagong highway. The expressway would be an exclusive one for high speed travel by vehicles carrying only business cargoes. But the present government is seen busy to only expand the existing Dhaka-Chittagong highway from its two-lanes existence into a four-lanes one for all types of users. A foreign company was awarded contract for doing this work last week. But it would be more paying for the economy as a whole in the mid and long terms if work can be started expeditiously on the four-lane business expressway.
Apart from this expressway the government should also give attention simultaneously to building inland container depots (ICDs) to be supportive of both the port and the expressway. Undoubtedly, the ICDs would take pressure away from the Chittagong port and also ease the movement of traffic on the vital Dhaka-Chittagong corridor. Similarly, railway's transportation capacities in Dhaka-Chittagong corridor can be increased and improved by double-tracking the existing single-line and improving railway management.
All of these measures will need to be taken in line with projections of present and potential uses of the transportation mediums. That is why it is absolutely necessary that the work should proceed under a comprehensive or master plan with components in it that can be progressively realised in tandem with the needs of the users. It is also imperative to make progress on different proposed projects to develop Bangladesh as a regional hub for transportation.
Remaining successful in business or winning more market shares, essentially involves reducing the costs of doing business. The economy of a country should aim to become more and more competitive to flourish internally and specially to promote its external trade. According to a report of the Asian Development Bank (ADB), the Bangladesh economy can gain 1.0 per cent rise in its total economic output and 20 per cent in foreign trade if the different modes of transportation only in the Dhaka-Chittagong corridor are made more efficient.
The study also significantly revealed that the overall informal payments and other inefficiencies add up to 40 per cent to transport-related costs for imports in the country. Thus, the case for streamlining the transportation in the Dhaka-Chittagong corridor, should be obvious. Not only in this particular corridor, similar transportation-related improvement needs to be achieved throughout the country. This will call for significantly adding to the number of transportation-related infrastructures, their maintenance and various supportive functions including the elimination of the tolls and other man-made abuses.
Indeed, transportation is counted as a major cost of business. The countries that have developed or are noted for moving up in the economic ladder, owe a lot to successful transport planning. Transport planning can involve many things from building shortest road, rail or waterway systems for the dispatch of cargoes to identifying and promoting the cheapest medium of transports and integrating them to the needs of various users. For example, waterways may be relatively cheaper for the haulage of cargoes of the readymade garments (RMG) sector in Bangladesh. But speed of delivery requires their transportation through land routes whereas other importers or producers not bothered by the need for fast freighting can opt for the cheaper waterways. Thus, different categories of users can use different mediums of transport suitable to them but each of these mediums need to discharge their utility efficiently for the optimum benefits of businesses.
The functioning of the Chittagong port was reported to have much improved during the last couple of years . The immediate past caretaker government gave focused attention to improving the operation of this port in all respects . The results were found to be very impressive. The time to unload cargoes and to leave the port was reduced to a little over one day. The earlier congestion completely disappeared and foreign shipping companies started taking lower charges while coming to Chittagong port after knowing about its improvements and the reduced risks of calling on it.
The challenge now is to retain and build upon the improvements achieved by the past government and not to allow anything that would lead to the reappearance of the old troubles in this premier port of the country.
There are more things to be done to get the maximum benefits out of improving conditions at Chittagong port. A suggestion has come from businesses that along with further improvement in the port's functioning and adding to its capacities, the government should adopt a plan with no loss of time to build at least one expressway in the strategic business corridor between Dhaka and Chittagong. The plan on its implementation can lead to saving of millions of taka annually for businesses from substantial reduction of transportation costs.
The reduction of this cost will be only one aspect of the benefits from this project. The competitiveness of the export-oriented industries, specially garments, would increase significantly after it is built. The expressway would help mightily in shortening the crucial lead time for garments exporters in both carrying imported raw materials to production destinations swiftly and similarly cut down on the time to reach finished products at the port for loading on ships. Not only costs would fall for industries geared to exports, transportation costs of all types of consumer and essential goods from Chittagong would likely fall notably from their faster dispatch and hence reduced transportation costs.
The projected four-lane expressway exclusively for business will cut down the time of movement between Dhaka and Chittagong for business cargoes by nearly four hours. It takes an average of at least seven hours now for a container-laden truck to reach Chittagong from Dhaka using the existing Dhaka-Chittagong highway. The expressway would be an exclusive one for high speed travel by vehicles carrying only business cargoes. But the present government is seen busy to only expand the existing Dhaka-Chittagong highway from its two-lanes existence into a four-lanes one for all types of users. A foreign company was awarded contract for doing this work last week. But it would be more paying for the economy as a whole in the mid and long terms if work can be started expeditiously on the four-lane business expressway.
Apart from this expressway the government should also give attention simultaneously to building inland container depots (ICDs) to be supportive of both the port and the expressway. Undoubtedly, the ICDs would take pressure away from the Chittagong port and also ease the movement of traffic on the vital Dhaka-Chittagong corridor. Similarly, railway's transportation capacities in Dhaka-Chittagong corridor can be increased and improved by double-tracking the existing single-line and improving railway management.
All of these measures will need to be taken in line with projections of present and potential uses of the transportation mediums. That is why it is absolutely necessary that the work should proceed under a comprehensive or master plan with components in it that can be progressively realised in tandem with the needs of the users. It is also imperative to make progress on different proposed projects to develop Bangladesh as a regional hub for transportation.