Development of ports and transportation for trade facilitation

Dhaka,  Tue,  22 August 2017
Published : 10 Mar 2017, 20:53:43
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Development of ports and transportation for trade facilitation

Md Shafiqul Islam
Trade facilitation refers to broader range of measures that aims to streamlining the movement of goods, reduction of red tape, procedural barriers including tariff structures and other broad trade supporting services. Trade facilitation impacts on the percentage growth of Gross Domestic Product (GDP) and international trade.

Globalisation, deregulation, logistics integration and containerisation have also impacted all sectors of Bangladesh in general and maritime sector, in particular. With the adoption of deregulation policy in the 80's and open market economic policy in the 90's, trade growth in Bangladesh accelerated necessitating efficient cargo handling through ports, particularly the Chittagong Port. The foreign trade accounts for approximately 38 per cent of GDP. The average maritime dependency factor of the country is about 33 per cent (last five years). 

In Bangladesh, trade facilitation encompasses the area of the growth of container, reduced turnover time and occupancy rate of vessels, enhancement of the physical infrastructural facilities of port and cargo handling capacity, improvement of transportation facilities along with the mode of transportation, enhancement of the overall capacity of the Inland Container Depot (ICD), River Inland Container Depot (RICD) and digitisation of cargo handling and services across the border. It contributes to lowering the costs of trade, increasing  market competitiveness in the international market and enhancing economic wealth. Trade facilitation is effected by investment in the improvement of port facilities, transportation infrastructures inside and outside the ports, Information Communication technologies (ICT), handling and custom clearance facilities and environmental aspects of the ports etc.

EXISTING FACILITIES OF CHITTAGONG PORT: Chittagong Port (CP) plays a pivotal role in revitalising the economy and for sustained economic growth of Bangladesh through facilitating international trade. The bulk of international trade is generated from the Dhaka-Chittagong corridor where more than a third of the country's economic activity is located

Built in 1887 near Karnaphuli River, 16 Km upstream of Bay of Bengal, Chittagong Port is an integral part of the sub-regional transport and logistics chain connecting northeastern India, Bhutan and Nepal to Europe, North America and Southeast Asia. The average size container vessels serving the Chittagong port is 2500 TEUs to 3000 TEUs having draft of 9.1 meters (more modernised sea ports are found handling container vessels of 5000-18,000 TEUs) 

In Bangladesh, both export and import and regional trade (such as for Nepal, Bhutan, and northeastern Indian states) are handled through two seaports (Chittagong Port and Mongla Port), ten land ports ((Benapole, Burimari, Akhaura, Sonamasjid, Hili, Banglabandha, Teknaf, Bhomra, Bibirbazar, and Nakugaon) and three international airports (Hazrat Shahjalal International Airport, Dhaka, Shah Amanat International Airport, Chittagong, and Osmani International Airport, Sylhet). According to sources, the seaports handle 87 per cent of Bangladesh's trade, while land ports handle 13 per cent. The Chittagong Port services 79 per cent of Bangladesh's agricultural imports and exports. 

The port is connected with the hinterland by railways, road networks and inland waterways.The dry cargoes from the port are cleared by three modes of transport, viz. rail, road and river, which are approximately 10, 75 & 15 per cent respectively of the total cargo forwarded to the hinterland out of which 60 per ent is bound for the Dhaka area, a large commercial and industrial centre of the country. 

In 2016, Chittagong Port handled 2.346 million Twenty-Feet Equivalent units (TEUs) of containers having 51.38 million tonnes (MT) of cargo and in 2015, 2.024 million TEUs of containers having more than 50 MT of cargo. It is apprehended that there will be three-fold rise in container traffic in next 15 years. The expected figures are 2.7 million TEUs in 2020 and 5.4 million TEUs in 2040. Major imported commodities are food grains (e.g wheat), cement, fertilizer, coal, salt, sugar and edible oil etc. Government of Bangladesh data notes that the Chittagong Port has general and container berths and jetties for oil, grain, urea, ammonia, fertilizer and dry cargo.

The growth of handling of both cargo and container has witnessed a remarkable rise, which indicates the growth of national economy and also warrants upgradation of cargo handling facilities of the ports.

The Chittagong Port Authority (CPA) has 13 General Cargo Berths (GCB) for handling general cargo out which 6 jetties have now been used for handling container vessels along with the existing container terminal having a capacity of handling three container vessels. Moreover, with the construction of New Mooring Container Terminal, along with 1000 meter long berth and back up facilities in 65 acres of land, more 0.5 Million TEUs could be handled. 

There are 16 private bonded off-dock services; 37 types of commodities are authorised through these private services. In 2014, according to contacts, these private services handled 89.91 and 22.93 per cent of the total export and import cargo. The growth in container traffic in Chittagong Port has been at much higher rate than anticipated. Due to limited facilities, only about 10 per cent of the containers could be transported by railways to Dhaka ICD.

LIGHTERAGE OF CARGO: The deep draft vessels are lightered at the outer anchorage by tankers each of approximately 1,000 tons capacity and coaster of the capacity of 300 to 1000 tonnes owned by the public and private sectors. Besides these, country craft each of 20 to 80 tons capacity and steel barges each of 300 to 500 tons capacity also carry out lighterage work. The cargo from such lighters intended to be discharged at the Chittagong port is handled at a vacant jetty or in between two vessels alongside the jetties. Cargo discharged into lighters at the outer anchorage may also be directly transported to inland river ports and Mongla Port. It has been envisaged to construct a 'Bay Terminal' at Patenga coast on 900 acres of land behind the Chittagong Export Processing Zone (CEPZ) allowing big ships longer than 190 meters long and draft more than 9.5 meters to berth and carry out other activities. Mother vessels having up to 5000 TEUs will be able to anchor there. 

TRANSPORTATION BY RAILWAY: Inland Container Depot (ICD) at Kamalapur, Dhaka of Bangladesh Railway has at present 450 Bogie Flat Container Trucks (BFCTs) for movement of consignments Chittagong to Dhaka having facilities for custom clearance. Two trains having 62 BFCTs ply every day from Chittagong to Dhaka and it takes approximately 18-20 hours. It takes around six hours to unload 31BFCTs from one train and approximately 3-5 days to clear shipments at ICD, Dhaka. Storage facilities at ICD, Dhaka are up to 3927 TEUs per day.

To cater the growing needs of container service through railway, the government is planning to establish a container terminal on an area of 55 hectres of land at Dhirasram, Gazipur attached to Dhaka Eastern by-pass road with handling capacity of ICD of 354,000 TEUs per annum. Industries at Savar, DEPZ, Tongi, Dhamrai, Gazipur and those on Dhaka-Sylhet highway will be benefitted from this ICD. Handling capacity of this ICD is almost 20 per cent of the container handling capacity of Chittagong port. Establishment of this ICD will certainly impact positively on the transportation of containers by rail and reduce the transportation cost for import and export commodities. 

To ease transportation of goods through railways, early implementation of the ICD at Dhirasram is highly desired. Considering the impact on the development and growth of the economy, government might consider building a two-way dedicated railway line from Dhirasram to Chittagong port. This will enable the faster movement of containers as well as reduce the congestion in the Chittagong port as well as in Dhaka-Chittagong High way corridor.    

RIVER INLAND CONTAINER DEPOT (RICD) AT PANGAON: Chittagong Port Authority (CPA) and Bangladesh Inland Water Transport Authority (BIWTA) have jointly built an Inland Container Terminal at Pangaon, near Dhaka for transportation of goods to Chittagong and Mongla. 

The port has a Jetty of 180 meter long and two ships of 70-75 meters length with 4.5 meters of draft can berth simultaneously. The terminal has storage facilities for 3,500 TEUs containers and can handle 116,000 TEUs  annually and its capacity will gradually be raised to 160,000 TEUs. This is almost 10 per cent of the TEUs handled in Chittagong port. The terminal is expected to open up new horizon in the transportation of goods through waterways and will ease the pressure of cargo movement on the Dhaka-Chittagong railway and highway corridors. 

NEED FOR MORE TERMINAL: It has been envisaged in government plan to establish a power hub at Maheshkhali, Cox's Bazar, for the production of about 10,000MW  power from coal based super critical power plant through construction of eight  2X660MW power plants. Each plant will require imported coal of 6.5 Million Tons per annum (MTPA). When all the plants will be operational, total coal requirement would be 28.00 MTPA. A dedicated coal terminal for regular supply of coal to the power plants should be constructed on a priority basis. Similarly, in addition to the construction Payra Port for handling general and containerised cargoes, a separate coal terminal has to be built for regular supply of coal to the envisaged three 2X660 MW coal based power plants at Payra.  

Moreover, government has also envisaged establishing 100 Special Economic Zone (SEZs) and more Special Export Processing Zone (SEPZ) for individual countries like the existing Korean Export Processing Zone (KEPZ). When these SEZs and SPEPZs will be established, cargo handling capacities of Chittagong, Mongla and Payra port, along with other public and private inland ports, will have to be enhanced to accommodate the increased volume  of cargoes.

The government has envisaged to set up a second unit of Eastern Refinery Limited (ERL) having capacity 3.00 million tonnes( MT) at Chittagong and another refinery of capacity 5.00MT near Payra Sea Port under Patuakhali district on an area of 1000 acres of land. These two refineries will necessitate off loading facilities of crude oil at Chittagong and Payra ports.

CONCLUSION: Trade facilitation directly impacts the development and growth of the economy of the country. It involves efficient performance of port facilities, faster and safe transportation of goods to and from the ports. To ensure smooth operations of the ports, avoid congestion and reduce dwelling time of the ships in the harbour of the Chittagong and other ports, it is essential to upgrade the facilities of the physical infrastructures, enhance the capacity of the personnel involved in port management, foster connectivity with the sea ports, ICD and RICD, upgrade the port operations in keeping with the prevailing international standards, digitize customs procedures, track container and cargo movement through using GIS tracking system and maintain the environment of the ports in a harmonised manner. As a policy measure, transportation of 70-80 per cent of goods through ICD and RICD and the rest 20-30 per cent through highways may be considered for the benefit of international trade. Adoption of long term pragmatic policies on efficient port operation and management is required to facilitate the upcoming demand of cargo handling in different ports. Policies should be framed based on 30-40 years perspective of international trade and double digit growth of the economy. Ministry of Ports and Shipping, in liaison with other concerned ministries, should embark upon formulating policies and framing comprehensive action plan to facilitate international trade for the development and growth of the burgeoning economy of Bangladesh.  

Dr. Md Shafiqul Islam is a former Secretary to the government of Bangladesh. shafiqjs@yahoo.com

 
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