Deep sea port in doldrums

The future of the deep sea port is in doubt as the government is very slow in doing the tasks suggested in a feasibility study two years ago. The Techno-Economic Feasibility Study, submitted to the Shipping Ministry in July 2009, recommended setting up of a deep sea port authority.

Deep sea port

The ministry made the decision to form the body at a meeting yesterday, after two years. Another recommendation was to enact the proposed Deep Sea Port Act, which is pending with the finance ministry. Yesterday's meeting requested the ministry to immediately send the draft law to shipping ministry with opinions.

The only progress made regarding the proposed deep sea port at Sonadia Island in the Bay of Bengal was formation of a cell in August, 2010. The cell is responsible for executing the port related decisions quickly. The study, prepared in three years at a cost of $4 million, outlined a three-phase construction plan and a detail design of the port, and assessed huge financial potential. It also chalked out how the port can be built under public-private partnership (PPP).

The first phase of the construction is supposed to start at the end of this year and complete by 2015 at a cost of Tk 13,000 crore. As per the study, the port can go into operation in 2016 if the suggested work is done in time. Construction of the port is supposed to begin after drawing of its design, but the government is yet to select a design consultant. Seven firms, however, were short-listed for the job.

The then shipping minister Afsarul Amin told journalist in 2009 that it might take them a year to have a complete design. Shipping ministry officials said everything will be delayed and none can say when the construction works will start. The second phase will be completed in 2035 at a cost of Tk 26,000 crore, and it will be changed to a full-fledged and modern international port with the completion of the final phase by 2055 spending Tk 1,100 crore.

“The deep sea port will have an enormous positive impact on the economy since the study estimated about two percent GDP growth,” said KM Ahmed, who was the director of deep sea port project. “Everything is outlined in the study, but the progress made so far is very disappointing,” he told.

If constructed, the port will generate massive employment and earning opportunities. It will also boost export and import and will massively increase the country's capacity to handle cargo. The carrying cost of both incoming and outgoing goods will come down significantly as the port will become a regional hub handling a massive traffic.

According to the feasibility study, a total of 16 container berths, including nine international ones will be constructed in the fist phase. There is no alternative to a deep sea port as capacity of the country's largest Chittagong Port will totally be exhausted by 2015. “The Chittagong port is already facing problem with large ships,” said KM Ahmed, adding that Bangladesh will face serious problem without a deep sea port once transit is allowed to India, Nepal and Bhutan.

“The major problem will be that the government will have to update the feasibility study due to the delay,” said a senior official of the shipping ministry, adding many of the data has already become obsolete. The feasibility study prepared at a cost of $4 million. Experts say the entire money might be wasted as the government failed to move with the deep sea port project.

News Source:

The Daily Star

China sends MoU draft on deep seaport

The Chinese government has sent a draft memorandum of understanding (MoU) to its Bangladesh counterpart on the construction of a deep seaport at Sonadia in Chittagong, officials said Thursday.

"We have received a draft of the MoU from China Merchants Holdings International Company Ltd (CMHI) last week. But it is yet to take a concrete shape," Shipping Secretary Abdul Mannan Howlader told the FE.

"Once there is any development, we will let the people know it through press conference," Mr Howlader said.

CMHI Senior Deputy General Manager Mark Yang signed the forwarding letter of the MoU on June 21 but it reached the ministry of shipping last week.

"We are sending the draft of the MoU according to the decision of the meeting held on May 30 last in Dhaka," Mr Yang wrote to the shipping secretary.

The CMHI authority also invited Shipping Minister Shajahan Khan and the shipping secretary to visit Beijing, Shenzhen and Hong Kong to see their operations there.

Foreign Secretary Mijarul Quayes last week told newsmen that Bangladesh was yet to prepare a structural design for the project though one year had elapsed since the assurance from Chinese Vice-President Xi Jinping.

The Chinese vice-president also reiterated his government's commitment to Bangladesh in the construction of deep seaport two weeks back at a meeting with Bangladesh Foreign Minister Dipu Moni in Beijing.

Earlier in the middle part of last May Chinese Transport Minister Li Shenglin in a letter to Shajahan Khan designated their state-owned entity CMHI for construction and operation of the proposed deep seaport.

In 2006, Japanese firm Pacific Consultant International (PCI) first conducted a feasibility study for the proposed seaport.

The seaport, to be built at Sonadia Island of Moheshkhali in Chittagong, at the first stage will contain five international standard jetties with the capacity of handling a total of 704.01 million tonnes of containers a year.

The total construction cost of the seaport in three phases has been estimated at Tk 600 billion, the first phase of which is to be completed by 2020 at a cost of Tk 130 billion.

The CMHI is the largest port operator in China and is operating five key port clusters in the mainland China. It had stakes in ports in Nigeria, Hong Kong and Sri Lanka.

According to a communiqué between the two governments, the Chinese side has shown interest to fund construction of the seaport under a commercial contract.

The shipping ministry in March shortlisted seven companies for detailed designing of the seaport, although it still remains not clear whether any company other than the Chinese one would be eligible for the final selection.

A government-to-government deal to construct the seaport would mean that the shipping ministry has to cancel the bidding process and select the CMHI to construct and operate it without going through any selection process, sources said.

The detailed design of the seaport will cost Tk 1.0 billion for which the Chittagong Port will provide fund. The ministry of shipping last week held a meeting in this connection.

The worsening congestion situation at Chittagong Port is the main reason for which the government has opted to build a deep seaport at Sonadia.

The Chittagong Port has handled some 1.3 million twenty-foot equivalent units (TEUs) of containers during the first 11 months of the 2010-11 fiscal year (FY) against 1.09 million TEUs of containers in the same period in FY 2009-10.

Bangladesh has planned to make Sonadia a major regional shipping hub, catering to the demand of north-east India, Myanmar, Nepal, Bhutan and southern Chinese province of Yunnan.
News Source:
The Financial Express