The eminent economist believes that foreign participation can bring investment and skills, which is undoubtedly needed. However, such strategic decision-making requires a comprehensive and well-planned strategy, where the involvement of all stakeholders is ensured.

 

In a post on social media Facebook on Monday (May 19), Selim Raihan shared his views on the matter.

 

“The efficiency of Chittagong port does not depend only on the port authorities. The Chittagong Port Authority (CPA) is a government agency under the Ministry of Shipping. Besides, the Customs Department of the National Board of Revenue (NBR), the Ministry of Industries, the Ministry of Commerce and other government agencies are also involved in various activities inside the port. In addition, the private sector – such as container handling, security, cargo handling, shipping agents, cargo agents and freight forwarders – also play an important role. As a result, the reform and development plan of Chittagong Port should be comprehensive, so that effective coordination of all parties is ensured. ‘

Selim Raihan said there is a mandate that the interim government formed after the July incident can take some necessary reform initiatives for the sake of stability, good governance and a fair national election.

However, as Chittagong port is a strategic sector, the reform process should be based on more careful and thorough consultation. Some decisions may be necessary, but transparency, stakeholder consultation and political consensus are essential to ensure long-term acceptability and sustainability. Unless the foundation of participatory reforms is laid – those reforms will not be sustainable.

According to him, it is important to take a more inclusive approach in this context. Open discussions with all major stakeholders, including political parties, will allow them to express their views and gain support for reforms. A clear roadmap needs to be made for the development of the relevant government agencies and the logistics sector, including the Chittagong port, where the role of foreign participants will be determined – they should not replace local expertise, but work as a complement to it.

Transparency and accountability are essential in this process. All agreements must be made public, so that their terms and conditions can be reviewed and national interests protected. “Only through such a participatory and transparent process can it be ensured that the modernisation of Chittagong port will be sustainable and give a solid foundation to the country’s economic progress, without disturbing national interests.” “”

 

Chittagong Port CBA General Secretary Sheikh Nurullah Bahar and Maha Mirza were among the other speakers.

 

At the end of the discussion, the Democratic Rights Committee announced a long march from the National Press Club to Chittagong port on June 28.

 

 

Chittagong port is one of the most important economic assets of Bangladesh. Most of the country’s foreign trade activities are carried out through this port. A controversy has erupted over plans to lease out Chittagong Port’s New Mooring Container Terminal (NCT) to Dubai-based multinational company DP World.

 

According to the government, DP World is operating ports in many countries of the world; they are capable of operating ports of international standards. The modernisation and technology transfer of the port will be possible through experienced companies like DP World, which will bring foreign investment and increase the efficiency of the port.

Disagreeing with the government, some say seaport leasing is not just an economic issue; it is a strategic one. This has raised the question of whether control over national resources is being handed over to a foreign company.

 

Under the agreement, foreign companies will be able to influence overall management, including management, investment decisions and access. This can lead to the intrusion of foreign authority into the national decision-making process, increasing the risk of complications and conflicts surrounding this resource in the future, and even threatening national security. As a result, many are questioning, how logical is it to hand over the management of an important facility like Chittagong Port to foreigners?

Chittagong Port is not only a seaport, it is the driving force of Bangladesh’s economy. About 92 percent of the country’s total import-export is done through this port. The port plays an essential role in ensuring uninterrupted flow of food, fuel oil and other important commodities. The port handles about three million TEUs (a single account of a 20-foot long container) of containers every year.

The efficiency of a port depends not only on its operation and management, but also on its geographical location and structural facilities.

The terms of the contract regarding the recruitment of foreign operators, the potential profit and loss and the long-term impact must be thoroughly evaluated. 

 

“Professor Muhammad Yunus, the chief adviser to the current interim government, rightly described the importance of Chittagong port as the” “heart” “of Bangladesh.” If the heart is not strong, the blood circulation of the body is disrupted, as well as if this port is weak, the country’s economic activities will be disrupted.

“Now the question is, which way do we choose to keep this” “heart” “strong?” Should we increase the capacity of the heart by exercising according to the right lifestyle and health rules, or should we rely on ‘foreign medicine’ to find a simple solution? As stated earlier, the decision is not only economic but also strategic and involves national interest and security.

 

2. 

The Newmooring Container Terminal (NCT) was built in 2007, with an initial capacity of 1.1 million TEUs. In recent times, it has been further improved with the addition of modern machinery and infrastructure. Currently under domestic management, the terminal is handling more than 1.3 million TEUs of containers annually, which is more than its scheduled capacity.

NCT is earning revenue of more than one thousand crore rupees every year. Naturally, the question arises, how realistic is the need to transfer a terminal that is operating successfully and profitably under domestic management to foreign management?

There is no doubt about the need to improve the efficiency and modernisation of Chittagong port. Although it is one of the busiest ports in South Asia, its efficiency is far below international standards.

At present, a ship waits for three to four days in Chittagong for berthing, whereas in Singapore it is completed in just 12 to 24 hours and in Colombo in 24 to 36 hours. Similarly, it takes 7 to 10 days to unload containers at Chittagong port, which is usually completed in 2-3 days at the world’s top port; this increases the cost of export and import.

The efficiency of a port depends not only on its operation and management, but also on its geographical location and structural facilities. Chittagong Port is located in a narrow channel on the bank of the Karnaphuli River, where the water depth (draft) is about 9.5 meters, which is sometimes more or less due to tides.

In addition to the shallowness of the water, the narrow channels, sharp bends and tidal changes of the Karnaphuli River pose a major obstacle to shipping. As a result, the ship’s turn-around time increases significantly. As a result of location constraints, it is not logical to directly assess the efficiency of Chittagong port to the standards of Singapore or Colombo ports.

In addition to natural limitations, due to the lack of modern scanning technology and digital systems, customs clearance at Chittagong port takes 7 to 10 days. Weaknesses in infrastructure and warehousing management are delaying the transfer of goods, and the lack of technical skills of workers is hampering operational effectiveness. Therefore, the challenges of Chittagong Port are not limited to container handling, but its effective solution requires faster digitalisation of customs processes, skill development of workers, and modernisation of warehousing and transportation systems.

3. 

The process of leasing the New Mooring Container Terminal (NCT) of Chittagong Port to DP World started in 2023 during the tenure of Sheikh Hasina government; through government-to-government (G2G) negotiations. So why is the interim government following the same policy on ports?

This is not just a government decision; it is a reflection of a global economic doctrine – the ‘New Liberal’ philosophy. ‘ The goal of this philosophy is to expand the market system, privatise public resources, reduce regulation, ensure the free flow of capital, and open access to multinational corporations.

International financial institutions, including the World Bank, IMF, IFC, Asian Development Bank, have long played a role in implementing this philosophy. They are encouraging developing countries to privatise strategic sectors in the name of foreign investment, which often poses a threat to national interests and sovereignty.

Several examples illustrate the risks of such a deal, such as Djibouti’s 50-year lease in 2006 to Dubai-based DP World to operate the Doral Container Terminal. In the beginning, there were promises of investment and development, but over time, there were concerns about national security and sovereignty. As a result, the Djibouti government unilaterally terminated the agreement in 2018. In response, DP World filed a lawsuit with the International Investment Dispute Settlement Agency and later won a claim for damages.

Such examples are found not only in Africa, but also in South Asia and East Africa. For example, in 2014, a terminal at the port of Mombasa in Kenya was given to CRBC by a Chinese company. Initially, the revenue increased, but later the participation of local workers and traders decreased. Because the Chinese companies used their own labour and logistics.

A World Bank report in 2020 found that 42 percent of infrastructure projects that were privatised or implemented through public-private partnerships (PPPs) ended up with financial risks and liabilities borne by the state. The experience of countries like Sri Lanka, the Philippines and Kenya shows that giving control of strategic sectors to foreign companies weakens the power of locals and reduces transparency and accountability.

In addition, a number of studies have shown that privatisation in the strategic sector does not guarantee sustainable development; rather, income inequality, labour market contraction and social discontent have increased. According to a 2022 review by the OECD, the privatisation of strategic assets without appropriate regulatory powers undermines national interests in the long run and weakens bargaining power.

4. 

Naturally, the question arises, is handing over the management of the port to a foreign company the only way to increase efficiency? In 2023, the newly built Patenga Container Terminal next to Chittagong Port was given to a Saudi company to operate. According to the agreement, it is supposed to handle 500,000 TEUs annually, but after one year, the average handling is only 13 percent of the target. There are still not enough gantry cranes installed and the necessary skilled manpower and terminal automation have not been developed. According to many, the agreement with the Saudi operator in 2023 harmed national interests.

This example proves that only bringing in foreign operators does not ensure efficiency and development. If there is a lack of infrastructure, manpower and good governance, they also fail. The same experience in Africa.

5. 

The terms of the lease with DP World, a Dubai-based company operating the NCT, have not yet been made public. As a result, it is difficult to make a transparent and realistic assessment of the deal’s long-term impact, economic gains and losses, or strategic risks. Global experience shows that even if the efficiency of the port increases in hiring foreign operators, the risk of increasing container charges, shrinking labour rights, strategic information risks and international disputes increases.

According to a World Bank study, privatisation can increase the cost of operating ports by 20-40 percent. The experience of our neighbouring country India has also shown that the operation of ports under the control of foreign operators directly puts pressure on the local economy. Container charges under foreign operations at Mundra Port in India and Hambantota Port in Sri Lanka have increased by 20-30 per cent, negatively impacting business costs and competition.

Bangladesh’s economy and foreign trade are expanding rapidly and it is essential to increase the capacity of Chittagong Port in line with this growth. However, the solution to this challenge is not possible by relying only on foreign operators. This requires a well-coordinated multi-pronged roadmap where infrastructure development, technology upgradation, creation of skilled human resources and policy and institutional reforms have to be implemented in a planned manner. The entire logistics chain, including customs procedures, operational management, labour management, and goods transportation and warehousing, should be modernised and made effective through an integrated approach.

It is not desirable to take a hasty decision on an important national asset like Chittagong port. It is necessary to thoroughly evaluate the terms of the contract regarding the recruitment of foreign operators, the potential profit and loss and the long-term impact. The decision-making process should be open, participatory, and

On the basis of competitive bidding; so that domestic and foreign companies can participate equally. At the same time, the final decision on such an important issue should be taken on the basis of consultation and discussion with all the stakeholders concerned.

Golam Rasul Professor, Department of Economics, International University of Business, Agriculture and Technology, Dhaka