Deep seaport in Bangladesh
J. Q. Chowdhury
During the past weeks a lot has been written about the establishment of a deep sea port in Bangladesh. A tender has now been floated by The Ministry of Shipping and seven companies have been invited to bid on the techno-feasibility study of establishing such a port.
Though such an initiative to improve the country's infrastructure indeed should, on one hand, be welcomed, one, on the other hand, has to ask whether such a port is indeed going to become a true benefit for the country?
First of all the site that is considered is located south of Cox's Bazaar, and to develop the inland infrastructure to support such a port would be immensely time consuming and costly. Before a decision is taken on whether or not and how to connect the Asian Highway, even dreaming of making such an undertaking a sound one is doubtful to say the least.
If we think about North East Indian cargo, we can see that the main and almost only export item it has is tea. But we know that any trade should always be both ways for both parties' benefit. Whether or not it will be possible to attract cargo from East India is likewise doubtful, due to the political environment. Today cargo cannot move freely between the two countries. Then there is Bhutan and Nepal to be considered, but their export and import potential is in this respect so small that it's not going to make such a project fly and Myanmar has its own port (as does East India). So it is doubtful how much cargo Bangladesh would be able to attract from there as well.
The trend amongst international shipping lines is to build larger and larger container vessels calling fewer so-called hub-ports. Containers are sent to these hub-ports by smaller container vessels (feeders). This is because of economy of scale. A new 8,000 teu (20' equivalent unit) in today's market cost more than USD 100 million and shipping lines naturally want their investment to have a reasonable pay-back. Over the years, the return of investment amongst the global shipping lines has been less than 10 per cent and that would hardly attract a Bangladeshi investor, as raising money in Bangladesh would under normal circumstances cost more than that, bearing in mind our interest rates. This is presumably also why Bangladesh has not managed to build up a container vessel fleet of its own.
One can look at a world map and realise that today the last hub-ports relevant for Bangladesh called en-route from Far East to Europe and the East Coast of the USA are in Singapore/Malaysia and in Sri Lanka. There are no major ports in-between and this is not because of lack of sufficient water depth (15 meters + are required for today's largest vessels). The simple reason is that the daily running costs for the container vessels and the requirement for fast transit times between Far East and Europe will not allow them to deviate from the direct route: Singapore/Malaysia - Sri Lanka - Suez en-route to Europe. To call a port in Bangladesh would require a deviation of some four days and when you compare the cost (and time lost) with that of taking cargo from Myanmar, Bangladesh and East India to the hub-ports by feeders with that of the required deviation it is simply not an economically viable proposition.
Bangladesh is unfortunately situated too far away from the main shipping routes to attract large container vessels to make direct calls and therefore, other alternatives should be looked upon to ensure that Bangladeshi import and export can be economically shipped from and to the rest of the world.
The much discussed need for improvement of the efficiency and thereby cost reduction in Chittagong port is progressing with the on-going Asian Development Bank (ADB) project, the upcoming gantry cranes and the establishment of the New Mooring terminal. There is more space to further expand Chittagong Port to allow for the necessary growth in capacity in the years to come.
Then there is the port of Mongla! If dredging of the rivers is undertaken and industrial zones are created along the Dhaka-Mongla route, then the Mongla port would indeed be a viable alternative. Approximately 70 per cent of the total export of the country originates from Dhaka. Everybody realise that the Dhaka/Chittagong highway cannot sustain the required growth in traffic -- even if it is expanded to four or six lanes over the years to come. Mongla is closer to Dhaka than Chittagong and once the bridge is opened there would be opportunities in re-routing cargo to, and from, Dhaka via Mongla.
On top of this one must consider expansion of the railway capacity between Dhaka and Chittagong, starting much more economically viable barge services for containers between these two points and making it possible to allow containers to be stripped at consignee's premises and stowed at shipper's premises as is the practice in most countries of the world.
Well, then the need for a deep sea port in Bangladesh is maybe not that interesting -- at least looking at a 50 years' horizon!