Concerns are increasingly being voiced over the Chattogram port's largest terminal, New Mooring Container Terminal (NCT), being leased out to a foreign operator, as the interim government furthers the initiative undertaken by the previous Awami League government.

Port workers and several political parties have been demonstrating against the move, raising concerns that handing over the profitable, fully operational terminal to a foreign company would not be economically viable.

Costing Tk 2,000 crore, the 950-metre-long terminal was constructed by the Chittagong Port Authority (CPA) at the Chattogram port, some 256 kilometres south of the capital Dhaka. The work was completed in 2007.

The NCT is equipped with five jetties — four for ocean-going container vessels and one for smaller container ships that ply inland routes to connect with the Pangaon port in Dhaka.

Of the port's 18 quayside gantry cranes, an important container-handling equipment, the NCT alone has 14.

Local private firm Saif Powertec Ltd has been operating two of the terminal's jetties (numbered two and three) on an ad hoc basis since May 2007.

In 2015, the CPA appointed Saif Powertec Ltd as the operator for these two jetties and its joint venture with A&J Traders and M/S MH Chowdhury Ltd as the operator for jetties number four and five.

In 2024, Saif Powertec handled around 12.61 lakh TEUs (twenty-foot equivalent units) of containers, representing about 44 percent of what was handled by the port in total.

Of the port's two other terminals, Chittagong Container Terminal (CCT) handled 19 percent, and General Cargo Berth (GCB) handled 37 percent of the port's containers.

The port has a fourth terminal, the newly built Patenga Container Terminal (PCT). It is yet to become fully operational, as its Saudi operator, Red Sea Gateway Terminal (RSGT), is in the process of acquiring handling equipment.

In March 2023, the Awami League government approved the CPA's proposal that international private operators should operate and maintain the NCT under a public-private partnership (PPP) model.

Subsequent talks progressed with United Arab Emirates (UAE)-based terminal operator DP World.

WHAT ARE THE CONCERNS?

Demonstrating port workers have questioned leasing out a fully equipped and operational terminal to a foreign operator, raising concerns that it could lead to over 1,000 workers currently engaged at the NCT losing their jobs.

Former assistant publicity secretary of Jatiyatabadi Sramik Dal's port unit, Humayun Kabir, said foreign operators could be better involved in greenfield projects like the proposed Bay Terminal or Laldia Terminal, where new infrastructure can be developed.

"The NCT has been constructed using the CPA's funds while the CPA also spent around Tk 2,000 crore to install handling equipment," he said, adding, "There is nothing much left to invest in at this fully equipped terminal."

He also alleged that the Awami League government engaged in nepotism by appointing Saif Powertec Ltd through a tender bearing conditions that only Saif could meet.

"A new operator can be appointed through open tender, and it can operate the terminal as per the current system where the port authority collects all the charges and pays handling charges to the operator," he said.

Kabir further said if the NCT was leased out to a foreign operator, it would collect and take away most of the revenue, paying only a meagre handling charge despite operating a fully equipped terminal.

The CPA's records state that it earned Tk 1,216 crore as revenue from the NCT during fiscal year 2022-23, with a net income of Tk 574 crore after expenditures.

Saif Powertec was paid Tk 79.13 crore in handling contractor charges.

At a press conference on April 20, the Chattogram city unit of Bangladesh Jamaat-e-Islami also opposed the move.

"Handing over the NCT, a self-sufficient terminal, to foreign hands would be a direct blow to the national economy," said Jamaat city unit Ameer Shahjahan Chowdhury.

Claiming that local operators had efficiently managed the terminal for the past 17 years, he said, "Handing over a profit-making terminal to a global operator is illogical… such a move would put the country's sovereignty at stake."

However, the government maintains that appointing a foreign operator with the capacity to leverage modern technology would enhance the NCT's efficiency.

The International Finance Corporation (IFC), appointed as the transaction adviser by the CPA for leasing out the NCT, is expected to submit its report next month.

A senior port official, preferring anonymity, said the government was inclined towards appointing DP World, considering bilateral relations with the UAE, where a significant number of Bangladeshis are employed.

During his visit to the port in October, Shipping Adviser Brig Gen (retd) M Sakhawat Hussain assured journalists that "the government would not approve any foreign investment at Chattogram port compromising the interests of the country, the port and its workers."

He also gave his word that no worker would lose their job if a foreign operator was appointed.

CPA Chairman Rear Admiral SM Moniruzzaman last Thursday said the CPA would achieve maximum financial benefit if a foreign operator was brought in, while efficiency would also improve through increased competition.

"Most of the expensive container-handling equipment, including gantry cranes at the NCT, are overused," he said.

"A huge amount of money is needed to collect new equipment. Rather, what we need immediately is efficient service for keeping import and export activities uninterrupted," said Moniruzzaman.

He added that a global operator would install modern equipment and introduce the latest technology.

The CPA chairman further said the process of appointing Dubai-based DP World at the NCT was being carried out under a treaty signed between the governments of Bangladesh and the UAE.

M Masrur Reaz, chairman and CEO of Policy Exchange Bangladesh, said the local private firm has so far operated the NCT in a good way.

But now it is necessary to hire a global port operator to upgrade the country's logistics capacity to a much higher level in line with global standards, he said.

This will cater to future demands of export diversification, economic competitiveness and post LDC capabilities, he said.

A huge amount of investment is required for further capability upgradation of the NCT and the government should not go for such expenses since it is already in fiscal distress, said Reaz.

The government should instead engage global operators for such investments, he recommended.

Since logistics is now very interconnected with many services and sub sectors, foreign operators perhaps are in a better position to facilitate access for Bangladeshi traders and logistics stakeholders to the global logistics network, he opined.

He, however, opined that, if possible, the global operators need to be encouraged to forge partnerships with competent local firms for long term knowledge transfers.

It would also help the foreign operator get a better understanding about ground realities, he said.