More leeway for private ICDs

The National Board of Revenue (NBR) has formulated the country's first-ever comprehensive policy for private inland container depots (ICDs) in order to facilitate their operations and expand Bangladesh's foreign trade.

Owners of the private ICDs hailed the move, calling the policy comprehensive as it will help the sector get rid of the inconsistencies created by existing guidelines.

The Private Inland Container Depot (ICD) and Container Freight Station (CFS) Policy-2021, which was published by the NBR last week, has set clear guidelines on establishing private ICDs.

The policy has eliminated inconsistencies in the existing rules, made setting up scanners optional for ICDs, and given them power to fix tariffs on their own – changes that will attract investment to the sector.

At present, there are 19 private ICDs in Bangladesh, located in and around the port city.

More than 90 per cent of the total export-oriented goods are stuffed onto containers at the ICDs before they are shipped through Chattogram port.

Around 25 per cent of import load containers are sent from the port to the ICDs from where goods are delivered to importers after carrying out customs procedures. Currently, 38 types of imported goods are delivered by the ICDs.

Sometimes, the port sends inbound containers to the off-docks when they become empty after it releases goods directly to the importers.

In 2021, 19 ICDs handled 7.09 lakh TEUs (twenty-foot equivalent units) of export containers, 3.03 lakh TEUs of import containers, and around 13 lakh TEUs of empty containers, according to the Bangladesh Inland Container Depots Association (BICDA).

The policy comes as businesses are calling for setting up more depots in line with the increasing volume of the country's foreign trade, which stood at over $100 billion in the last fiscal year.

According to the policy, a proposed ICD needs to have a storage capacity of 4,500 TEUs containers. It needs to have a five-year experience of handling export and import containers and cargoes and be located over an area of at least 15 acres.

The NBR adopted the policy to resolve the problems faced by the ICD operators due to the inconsistencies in the two separate guidelines, issued by the NBR in 1998 and by the shipping ministry in 2016.

According to the guidelines of the NBR, ICDs needed to be established within 20 kilometres of the port. But the shipping ministry directed that ICDs should be located beyond 20km from the port in order to reduce traffic congestion.

BICDA Secretary Md Ruhul Amin Sikder said due to the differences in the guidelines, they had frequently faced problems as authorities several times directed the existing ICDs located near the port to relocate.

Under the new policy, proposed ICDs have to be built at a distance of at least 20km from the port. It says nothing about the existing ICDs.

"This shows that the new policy has more practical approach for the sector," said Sikder.

The ICD Policy 2021 has said nothing about tariffs which seems to be a positive approach for the sector as well, he said.

The shipping ministry's 2016 guideline directed that tariffs needed to be fixed by a committee of the ministry. Such condition caused them many hassles, according to Sikder.

The new policy also has made it optional for ICDs to set up of scanners. It was mandatory under the previous guidelines.

It, however, states that operators with scanners would get extra facilities like the scope to handle higher volume of imported goods.

"Such a facility will surely encourage ICDs to invest," Sikder said.

ICD users, however, were not pleased.

Bangladesh Freight Forwarders Association Vice President Khairul Alam Sujan said the NBR should have discussed with all the stakeholder before formulating the policy.

"The new policy allows ICD operators to fix tariffs at their will," he said.