The leasing process for Chittagong Port’s New Mooring Container Terminal (NCT), which began during the Awami League government, gained momentum under the interim government. As part of that process, DP World, a UAE (United Arab Emirates)-based port operator, is now set to sign an agreement with the elected BNP (BAngladesh Nationalist Party) government.
The agreement is scheduled to be signed at 3:00 pm today, Thursday, at the Investment Bangladesh auditorium. Under the agreement, DP World will operate the terminal for 15 years and collect fees from users.
In return, the company will pay the port authority a one-off fee and a charge for each container. However, the government has not yet disclosed any details of the agreement.
If the agreement is signed, NCT will become the third container terminal at Chittagong Port to be handed over to a foreign operator.
Earlier, during the Awami League government, Saudi Arabia’s Red Sea Gateway Terminal (RSGT) received the responsibility of operating the Patenga Container Terminal, which the government had constructed.
During the interim government, APM Terminals, a subsidiary of Denmark-based company Moller–Maersk, received the contract to construct and operate a container terminal at Laldia. During the same period, the government leased the Pangaon Inland Container Terminal in Keraniganj to Switzerland-based Medlog.
Apart from the terminals handed over to foreign operators, Chittagong Port has two other terminals that domestic operators still manage.
Completed in 2007, the nearly one-kilometre-long New Mooring Terminal can accommodate four seagoing vessels and one smaller container vessel simultaneously.
After construction, the terminal initially began operations partially before becoming fully operational. Domestic operators have managed it under short-term contracts. The terminal mainly handles the loading of export containers onto vessels and the unloading of import containers from vessels.
Lengthy leasing process
In 2008, the authorities took an initiative to appoint a foreign operator for the terminal through a competitive tender. They initially shortlisted four of the world’s leading port operators. The list included UK-based P&O, which DP World had acquired. The Awami League government later cancelled the appointment process.
The Awami League government subsequently restarted the process of leasing the terminal. On 17 February 2019, the parties signed a memorandum of understanding (MoU) in Abu Dhabi. The agreement was signed between the Government of Dubai and Bangladesh’s Public-Private Partnership Authority (PPP Authority).
On 3 April 2023, the formal process to lease the NCT moved forward after the then prime minister approved the proposal.
Following the fall of the Awami League government in the mass uprising, the interim government assumed office. During its tenure, the leasing process gained momentum.
Before the government’s term ended, the authorities evaluated the technical and financial proposals. They then began negotiations, which continued from 27 January to 2 February this year. Although the interim government advanced preparations for the agreement, a workers’ movement began at the port during this period.
At a press conference on 8 February, Ashik Chowdhury, chief executive officer of the Public-Private Partnership Authority (PPP Authority), said DP World had sought additional time to review the draft agreement.
The government had only two working days left in its term. As a result, the agreement could not be signed within that period.
After the BNP government took office in February, the suspended leasing process began moving forward again. Following a meeting of the joint platform of the two parties on 8 April, DP World submitted a fresh proposal.
After evaluating the technical and financial aspects of the proposal, the parties concluded the negotiations. On 1 October, the Cabinet Committee on Economic Affairs gave in-principle approval to the draft concession agreement to operate the terminal through a foreign operator for 15 years.
During the interim government’s tenure, a movement against leasing the NCT began under the banner of the Port Workers’ Party, creating a deadlock at the port.
At the time, protesters demanded that the authorities make a decision on the matter under an elected government. Now, under the elected government, workers and employees have again become vocal against the lease under the banner of the Port Protection Movement.
At a sit-in programme on Monday, leaders of the Port Protection Movement warned that they would shut down operations at Chittagong Port on Thursday unless the initiative to lease the NCT was cancelled. As part of the movement, protesters held a torch procession in the port area yesterday, Wednesday.
How much will the port change?
Last financial year, the New Mooring Terminal handled around 1.385 million units of containers. This accounted for approximately 44 per cent of the port’s total container traffic. There has been considerable discussion and criticism over how much container traffic will increase if DP World takes charge.
Although DP World ranks among the world’s top 10 port operators, former Chittagong Port Authority board member Zafar Alam believes the company will need to make fresh infrastructure investments to increase the NCT’s capacity.
Speaking to Prothom Alo, he said, “DP World proposed investing US$1 billion in infrastructure a long time ago. To reap the benefits of the NCT, DP World will now need to invest in infrastructure not only at the terminal but also along the routes used to transport containers to and from the port.”
“For this, it is necessary to invest in the proposed Dhirashram Inland Container Depot (ICD) near the production zones and in rail connectivity to the depot. This will improve DP World’s operational efficiency and also benefit import-export trade,” he added.