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Deep politics of deep sea ports

  • Published at 07:05 pm June 16th, 2016
Deep politics of deep sea ports

One of the sorriest tales of Bangladesh is that, in spite of growing need, the country has failed to build a deep sea port within its territory even after 45 years of independence.

The $60 billion trade is carried out through smaller vessels, and it hurts Bangladesh’s global export competitiveness and raises the cost of imported goods due to a higher cost of transportation on secondary vessels.

Since the early eighties, the issue of deep sea port has been a contentious one.

Politicians, at various spectrums, often raised a spectre that by awarding the lucrative contract of setting up a deep sea port, we are effectively handing over our sovereignty to foreign powers.

However, very few people understood who is opposing whom, and construction of a deep sea port has never gained momentum beyond political rhetoric.

The inactivity of government, in spite of the fatigue shown by the Chittagong port, intensified a perception that pressure from conflicting global and regional players is the key reason for not building the port. That all seems to have changed now.

What’s changed?

After ascending into power through a dubious election in 2014, which was boycotted by most opposition parties, the ruling party has fast-tracked a number of high profile projects, and building up a deep sea port is again on the agenda.

However, to the surprise of many, the available and often discussed options of Matarbari and Sonadia have been disregarded, and the deep sea project located at Payra seems to have taken the front seat in the government’s plans.

While topographical features dictate Sonadia as a natural location for a deep sea port, Payra offers a number of technological challenges.

Analysts have suggested that a deep channel would have to be cut through the heavily-silted port to ensure the movement of large vessels.

There are concerns about the need for regular dredging in the area due to heavy silting from the Himalayas.

Before this government pushed the Payra project, no other government had interest in Payra, because Sonadia or Moheshkhali channels are much more suitable due to their natural and topographical features.

Back in 2006, a Japanese firm, Pacific Consultant International, conducted a 31-month study on Sonadia, and concluded that a harbour with nine 300-metre jetties could be constructed to allow the berthing of nine mother vessels, four containers, and five general cargo vessels immediately to serve the need of the country, and another nine harbours of similar size could be built in subsequent years.

The draft final report of the techno-economic study was published in 2009 in a highly profile seminar participated by government officials and industry professionals after the current government ascended in power.

So, the government is very well aware about the potential of Sonadia channel.

The survey concluded that around Tk13,000 crore may be required in the first phase, which included two break-waters -- one 1,950 metres and the other 2,250m -- to protect the deep sea port from tidal upsurge and waves.

The economic consideration, the financial strength, the terms of the deal, and a sound technical study based on comparative analysis of the available locations should be the primary criteria by which such a major decision is taken

The channel inside each U-shaped harbour would measure 1.5 kilometres by 0.5km. The draft of the channel would then be raised to 16m from 10m after the proposed works.

On the other hand, a figure of $3bn (Tk24,000cr) has been touted by the government for setting up the Payra deep sea port, and still now, there is no master plan in hand. The government has already allocated around Tk1,000cr in to develop the port, at the October 2015 ECNEC meeting.

Much of it has already been released and spent. So, technically, around one-tenth of the money that would have required to set up Sonadia has already been spent from our own coffers.

No official explanation has been given as to what has prompted the government to change its plan.

It has also been widely reported that around 10 companies, including three Indian companies have shown their interest in setting up Payra deep sea port.

As per media reports, India’s Foreign Secretary S Jaishankar expressed New Delhi’s interest in developing the Payra port project during his talks with Sheikh Hasina last month.

Based on newspaper reports from India, it appears the Bangladesh authority has indicated its willingness to work with Indian companies.

A major shift

This is a major shift for the government, which has earlier worked closely with China to build the first deep sea port in Sonadia -- a plan that was scrapped this year. Earlier, in June 2014, Prime Minister Sheikh Hasina signed an $8bn MOU with China to set up the deep sea port in Sonadia.

During the visit, Bdnews24 reported: “The project will be executed in three phases. Phase one will cater to the shipping demands till 2020, phase two till 2030, and phase three till 2055.” It also indicated that state-owned China Harbour Engineering Company Ltd was likely to win the contract to construct the port.

Al-Jazeera, the international channel reported that the deal “represents a strategic maneuver by Dhaka in response to criticism in the US and the EU to parliamentary elections in Bangladesh in January, which was boycotted by the opposition.”

The trip was seen “as a part of an effort by Hasina to strengthen ties with countries that do not share Western concerns about the legitimacy of her government, such as China, Russia, and Japan.”

Since then, China has completed another feasibility study and offered a subsidised loan with an interest rate of 2% to complete the $8bn project.

This would have been the largest infrastructure project in the country, and it involves/requires setting up the industrial commercial zone and other major activity in the area.

However, in February, the government declared that the $8bn deep water port has been scrapped.

The official reason cited was disagreement on financial terms, but security analysts across the globe, including analysts from India, unequivocally said the Indian government persuaded Bangladesh to scrap the deal to protect “Indian strategic interests” in the Bay of Bengal, and to ally with “Indian security concerns.”

In The Times of India, Indrani Bagchi wrote: “The cancellation of Sonadia is clearly a strategic decision by Bangladesh, doubtlessly helped along by India, Japan, and the US.”

China matters

In a bid to appease China, for whom the deep sea port in Bangladesh was their last bid in the “String of Pearls,” the government announced that Payra would be built by China. Shipping Minister Shajahan Khan said: “We will soon select one Chinese company for Payra’s deep sea port construction among four such state-owned Chinese firms who submitted their proposals.”

However, this plan of selecting a Chinese company has also been scrapped, and the government is now talking with India and other countries, and has come up with the idea of a consortium-based PPP approach, which will be shared by many countries.

A few of the commentators have indicated that one of the reasons to scrap the deal is that the government has already granted Japan the contract to build a deep sea port in Matarbari, which is 24km away from Sonadia.

However, this could not be the reason for the cancellation, because Matarbari deep sea port in its current form will only cater for coal to be transported to a prospective coal-fired power plant, and the topographical characteristics of Matarbari do not support a deep sea port the way Sonadia channel offers.

Nobody denies that the cancellation decision has been taken to appease the Indian establishment, which is now backed by the US.

The US has adopted a policy of not interrupting Indian interest in the region and Japan, who is pushing some aggressive financial and trade deals in Bangladesh.

From where we stand, it is clear that the decision to scrap the Sonadia deep sea project was a political one taken by the government, which constantly feels insecure about its international standing due its dubious poll from 2014.

While topographical features dictate Sonadia as a natural location for a deep sea port, Payra offers a number of technological challenges. Analysts have suggested that a deep channel would have to be cut through the heavily silted port to ensure the movement of large vessels

It is also clear that the long-term infrastructure consideration to build capacity for this country’s international business is of little interest to the government, and all of its decision are based on political exigency to gain leverage.

Henry Kissinger once famously said: “America has no permanent friends or enemies, only interests.”

A study of contemporary history would indicate, most of the countries have adopted this line of foreign policy, prioritising national economic interest over dogmatic identification of enemy or friend.

Judging from the events, it is clear that the deep sea project, which was kept in limbo for 45 years by successive governments, was flaunted by an insecure government to create legitimacy immediately after the election, and has been shoved in the mouth of China after the international community has grudgingly accepted the government, and now is being offered to India, the key ally of the ruling party.

Politics or people?

It is a sad turn of events, because Bangladesh needs much deeper consideration as to what the right location is for setting up the deep sea port, and who the right partner to build it.

Bangladesh needs neither to be a “string of pearl” of China, nor to play the fiddle to serve Indian strategic interests.

The economic consideration, the financial strength, the terms of the deal, and a sound technical study based on comparative analysis of the available locations should be the primary criteria by which such a major decision is taken, as this decision will have major technical, financial, and infrastructural ramifications for years to come.

However, the ruling party has little concern as to what is in the interest of the country and its future.

All of its concerns stem from its insecurity of an unpopular government disconnected from the people, which considers only the interest of the pillars that holds its power.

People and their interest are not part of those pillars.

From the perspective of the government, it has again proven itself to be a master tactician. It has played carefully in murky waters and has gained back international standing by flaunting and manipulating the key assets of the country, which still interest the international powers.

The question is: What price will the people will pay for these reckless decisions in the future?