A disaster in the making
With 92 percent of all trade being routed through Chittagong Port, it is perplexing to all as to why upgrading the port facilities has been in such a state of limbo for so long. The shortage of both physical infrastructure and equipment is largely responsible for the acute turnaround time for vessels at the port. This has led unfortunately to the imposition of extra surcharges by feeder vessel operators on the one hand and cancellation of trips to the port city from overseas destinations on the other. According to media reports, ANL, an Australian shipping company that happens to be the third largest container shipping line globally states the following: "All shipping lines calling Chittagong terminals are heavily impacted, with vessels waiting for an additional 07 to 10 days on an average above the normal berthing." The Asian Feeder Discussion Group (AFDG) has imposed a USD 150 per loaded TEU (twenty-foot equivalent unit) and USD 75 per empty TEU effective as of July 1.
We are losing business in the readymade garments (RMG) sector thanks to this situation. This additional cost coupled with the turnaround time could end up with Bangladesh losing orders to competitors in the region. When we take into account that the turnaround time is only 1.38 days in Singapore Port, 0.96 days in Shanghai Port, 0.68 days in Busan Port in South Korea, 4.18 days in Kolkata Port and 1.7 days in Colombo Port in Sri Lanka, things begin to add up. Indeed, the number of jetties today at Chittagong Port is 7 as opposed to 13 in the pre-independence days. According to a report published in a leading English daily on August 7, "Chittagong Port needs 26 gantry cranes whereas it has only four, two of which are now out of order, while 52 rubber tyred gantry cranes are required but it has only 23...Only 87 container loading and unloading equipments are in operation against the required 299 while 285 cargo handling equipments are functional against the required 895."
Given the continued paralysis of the port, many in the RMG sector are resorting to air shipment to meet deadlines which of course is very expensive. Those who cannot afford it are at risk of losing their orders. With feeder vessels leaving port without full capacity, we are sending the entirely wrong signal abroad about the cost of doing business in our country. And it is not only a question of lack of equipment that is to blame. The bureaucratic red-tape in clearing shipments is also hurting business. The demand for cargo handling equipment has been a demand for both exporters and importers alike but unfortunately, for whatever reason, steps have not been taken to that effect. With equipment in a bad state of replacement and no new equipment coming in, the current state of the port and the massive backlog was a disaster in the making for some time.
So what is to be done? We keep hearing about new infrastructure that will be built but there is something fundamentally wrong with the way the port authorities have been conducting business. With the procrastination by successive governments when it comes to procurement of essential equipment and expansion of terminals and berths, it is not unreasonable to privatise the port to increase efficiency. And to that effect the government has had a rethinking on the issue.
The Chittagong Port Authority (CPA) stated at the end of July that an international tender will soon be floated for privatising port operations. This is a move in the right direction. However, when exactly "soon" will be is a million-dollar question, particularly in light of the fact that there is a general election coming up sometime next year.
With the grand vision we have set for ourselves to become a middle income country by 2021 with USD 50 billion in export, we need a plan of action to address transportation and handling of containers at the port now as opposed to sometime in the future. While the international tender will take due course, what is holding up CPA from procuring essential cargo handling equipment and addressing customs-related clearance complexities? These are merely some of many questions that have been asked and not answered by people in authority but the sad fact is that we really have no excuse for inaction. The situation at the Chittagong Port is our doing and only we can get ourselves out of the hole we have dug for ourselves. The only thing left now is that the question of privatisation does not get bogged down in further red-tape which will keep costing the economy dearly as costs keep piling up.
Syed Mansur Hashim is Assistant Editor, The Daily Star.
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