Govt nearly ready to hire 3 global port operators

The government is nearing the end of the process to select and appoint three foreign port operators to run or oversee and build different facilities of the Chattogram Port, including the Patenga Container Terminal (PCT) and the Chattogram Bay Terminal.

The Public Private Partnership Authority (PPPA) is making effective progress to complete the steps, according to officials.

Officials at the port and PPPA said the government has decided to hire the Red Sea Gateway Terminal (RSGT) of Saudi Arabia to run PCT, which is nearly ready for operation and will have the capacity to handle 450,000 twenty-foot equivalent units (TEUs) of containers annually.

Meanwhile, two major global operators — Singapore-based PSA Singapore and DP World of the UAE — have been shortlisted to work on the proposed Bay Terminal, officials said.

This terminal has been a long-awaited project of the Chattogram Port Authority (CPA) that will offer open seaport facilities and is scheduled to be completed within 2025.

Talking to The Business Post, PPPA Director General (Programming and Investment Promotion) Md Abul Bashar said they are in talks with RSGT regarding PCT. “As soon as the transaction adviser of PCT submits its reports and the relevant formalities are complete, the contract will be signed with RSGT.”

He also said that if its appointment is confirmed, PSA Singapore will build one terminal of the 3.5-kilometre-long Bay Terminal. DP World has been asked to submit a detailed project proposal to build another terminal.

Chattogram Port is the busiest port in the Bay of Bengal and serves as the gateway for 90 per cent of Bangladesh’s import and export cargo. It managed 4,209 vessel calls and handled a record 3.2 million TEUs in 2021.

Both PCT and Bay Terminal, once operational, will take the increasing cargo handling pressure off the port and increase trade significantly.

CPA Secretary Muhammad Omar Faruk said, “PCT will start operating very soon. Efforts are on to start Bay Terminal’s construction work. CPA is working closely with PPPA and the Shipping Ministry regarding this.”

RSGT at the final stage

RSGT, the Red Sea’s largest terminal operator, has invested billions of dollars in many projects and operates dozens of port facilities across the world. It expressed interest in the operation and optimization of Chattogram Port and an inland container terminal in Dhaka’s Pubail in 2019.

Based on Bangladesh and Saudi Arabia’s government-to-government negotiation, a memorandum of understanding (MoU) between RSGT and the Shipping Ministry was also signed that year.  In August this year, the ministry nominated RSGT to operate PCT.

Constructed by the CPA at the cost of Tk 1,400 crore, with support from Bangladesh Army, PCT sits on a 32-acre site in the Patenga area near the estuary of Karnaphuli River.

CPA sources said RSGT will be responsible for equipping and running the new terminal under a long-term concession from the CPA.

The World Bank Group’s private sector subsidiary International Finance Corporation (IFC) is the transaction adviser to determine the financial arrangements with RSGT. It will submit its report soon.

Abul Bashar said this proposal is subject to the completion of a formal procurement and negotiation process, as well as approvals from the relevant authorities. “IFC is working with CPA and RSGT and is in the process of finalising the agreement,” he added.

PCT will have a 600-metre quay and be able to simultaneously handle three ships, boosting the vessel handling capacity of the country’s prime maritime port.

PSA Singapore, DP World, and Adani Group of India had also expressed interest in being appointed as operators of PCT.

Into the fray for Bay Terminal

The Bay Terminal will be built at Ananda Bazar of North Halishahar, six kilometres west of Chattogram Port and behind the Chittagong Export Processing Zone. The distance from the terminal to the outer anchorage is only one kilometre and the width of the channel is 800-1200 metres.

In August 2016, CPA hired two German firms and one Bangladeshi firm in a joint venture to conduct the feasibility study. They submitted their findings in 2017.

In June this year, CPA appointed Korean firms Kunhwa Engineering and Consulting Company Limited and Deyen Yang Engineering Company Limited for consultation and finalising the terminal’s detailed design. They submitted the master plan last month.

The government hopes to start construction of the project by January next year, under which three terminals will be built. There will be a 1,225m container terminal, an 830m long container terminal and a 1,500m multipurpose terminal, according to Shipping Ministry officials.

CPA will build the multipurpose one and the other two will be set up by two foreign operators under the PPP model.

According to CPA and PPPA sources, apart from PSA Singapore and DP World, two other international giants China Merchants Ports Holdings Company Ltd and International Port Development Cooperation of Korea had expressed interest in funding and constructing the mega project.

Of them, PSA Singapore and DP World have been shortlisted. The former has already submitted its proposal and the latter will submit theirs soon, said Abul Bashar.

He also said that Ernst and Young Global Limited is the transaction adviser in this case. After it submits its report, the government will move forward with making the deals with these two firms.

CPA sources said if their appointments are confirmed, these two companies will build one terminal each and operate them for a specified period.

An 11km-long breakwater will be built to protect the Bay Terminal from hostile weather and high waves. It will cost over $350 million.

Once it becomes operational, vessels with a draft of up to 12 metres and carrying a maximum of 6,000 TEUs will be able to berth at the multipurpose terminal. At present, the jetties of Chattogram port can accommodate ships with a maximum draft of 9.5 m.

The Bay Terminal will operate at all hours and will be able to handle around 3 million TEUs annually.