With an ambitious target on the table, the government has set the country’s GDP growth at 7.4% for the current fiscal year amid inadequacies in seamless transport through seaport.
Business people as well as trade think tank, however, opine that the target could be reached, but congestion at the Chittagong seaport – the main gateway to export-import activities – turns out to be a fear factor.
Being an export-led economy, the port capacity plays an important role in boosting Gross Domestic Product (GDP) growth.
On the other hand, congestion at the port shoots up the cost of doing business, thereby adversely impacting new investment due to delay in releasing imported machinery and raw materials.
The trade volume in terms of export and import is on an upward trajectory, but the port capacity fails to keep pace. A shortage of required equipment to handle port activities rubs salt into the wound.
In the fiscal year, Bangladesh’s overall import grew by 10.45% to $44.27 billion riding on the import of capital machinery.
Talking to the Dhaka Tribune, exporters expressed concern over the port capacity, which consumes enough time, and it leads them to fall behind shipping schedule and lose competitive edge in the global market.
Bangladesh economy is highly dependent on the export-oriented industry.
If the government wants to achieve the 7.4% GDP growth in the current fiscal year, the port should be made vibrant by removing all odds from there, Exporters Association of Bangladesh (EAB) president Abdus Salam Murshedy told the Dhaka Tribune.
If not, the dull operation at the port would also hit new investment, the much-needed requirement to increase domestic production as well as new employment generation, said Salam, also managing director of Envoy Group.
“We are working on how to meet the $50 billion export target from RMG sector by 2021.”
It is high time that steps be taken to procure port equipment, quicken off-docking of auctioned goods, increase number of scanners, speed up delivery services and train up manpower to ensure smooth operation, he suggested.
Currently, about 92% of the country’s import-export activities are done through Chittagong seaport, with its container handling capacity being around 2.3 million Twenty-foot Equivalent Units, which is expected to grow by 2.7 million in 2020 and 5.4 million in 2040.
Exporters blamed the lack of cooperation among stakeholders and shortage of equipment to the inefficiency of the port.
“Since port activities are run under multistakeholder, there must have a strong coordination among all parties involved to make it more effective,” BGMEA senior vice-president Faruque Hassan told the Dhaka Tribune.
It so happens that the port is open round the clock while the bank is not, he went on to explain.
“It would not bring benefit to stakeholders as exporters and importers have to pay to get service.”
On the other hand, there is a shortage of equipment while the existing ones are not operating in full swing, and sometimes they go out of order, added Hassan.
Hassan demanded an immediate purchase or rent of cargo-handling equipment, repair to two gantry cranes remaining dysfunctional and construction of a new container terminal to cope with the ongoing growth.
In order for availing new investment and ensuring smooth environment to facilitate business, the ease of doing business stands a key factor.
Business climate is very important to attract investment from home and abroad. If investors feel like not having facilities, they will lose interest in new investment. So, the government should concentrate more on the ease of doing business and on smoothing port operation.
According to the World Bank data, Bangladesh ranks 176th among 190 economies in the ease of doing business as of 2016.
“The capacity of Chittagong port did not increase in line with that of export-import volume. The government should prioritise smooth operation at the port,” Khondaker Golam Moazzem, research director of Centre for Policy Dialogue (CPD), told the Dhaka Tribune.
Goods from 4,671 different categories are imported through the premier seaport every year.
If such situation continues without capacity building initiatives, congestion will rise in the days to come while export-oriented sector people will lose their interest to take orders fearing delay in shipment and cost factors, added Moazzem.
In the last fiscal year, export earnings from woven products saw a 2.35% fall to $14.39 billion, which was $14.73 billion a year ago.
The advantage of low-cost trade facility will not last longer and the government should take immediate steps to enhance port efficiency and logistic support, said the trade analyst.
He suggested that the government engage private sector to help build the port capacity and realise the Vision 2041, when the country’s per-capita income is expected to grow $12,000 as estimated.
Chittagong Port Authority Chairman Rear Admiral M Khaled Iqbal said: “Since the port witnessed 10.5% growth in container-handling capacity in the last fiscal year, it can meet BGMEA’s $50 billion export target.”
Strict measure will be taken to remove congestion after cut-off time expires and private participation will be introduced, suggested Iqbal.
Initiatives have been undertaken to develop infrastructure, jetties, yard, manpower and equipment engaging all stakeholders concerned in Chittagong port and Laldia Bulk Terminal will be developed under Public Private Partnership while the Bay terminal under landlord system, he added.
The development plan will come underway from 2019, he said, adding that Patenga container terminal along with three other container jetties and one oil container jetty will be constructed.
However, experts and the port authority urged exporters and importers to chose Pangaon as it offers lower tariff and less congestion compared to the Chittagong port.
“Despite advantage in Pangaon port, we have witnessed business people are reluctant to use it, Iqbal said, calling upon them to use the port as tariff has been lowered to entertain importers.”
The government initiatives of making other port including Mongla and Pangaon vibrant is yet to get shape.
To beat congestion, Mongla and Pangaon should be well-equipped and well-facilitated, said Moazzem.
“If it is done, pressure on the single port will be reduced,” he added.
A total of 1,043,000 consignments to the tune of Tk32,000.2 crore were delivered through Chittagong port in the fiscal year 2016-17.
