3-month interim extension sought for Saif Powertec to operate Ctg port terminal

Highlights: 

• Saif Powertec operates the terminal since 2007
• Its renewed six-month contract to expire on 6 July
• Govt wants to appoint international operator
• Previous AL government initiated the shifting process
• The move sparked strong opposition from various quarters

The Chittagong Port Authority (CPA) has sought a three-month interim extension of its contract with Saif Powertec Limited, the current operator of the New Mooring Container Terminal of the port, amid the government's initiative to appoint UAE-based DP World as the international operator.

Saif Powertec's current contract for operating the New Mooring Terminal is scheduled to expire on 6 July. The most recent six-month contract with the company was renewed on 7 January this year.

The appointment of DP World to manage the New Mooring Container Terminal is being facilitated by the International Finance Corporation (IFC), a member of the World Bank Group, which has been appointed as the transaction adviser. According to the port authorities, the proposal to extend Saif Powertec's contract for three months during this transitional period was made on the IFC's advice.

Nasir Uddin, spokesperson and chief personnel officer of the CPA, told TBS, "The current operator's contract expires on 6 July. For this reason, we have written to the shipping ministry to extend the contract for another three months before its expiry."

He said a decision on the matter may be made at a ministry meeting.

Regarding the progress of handing over terminal operations to DP World, he added, "This process is being handled by the government and the shipping ministry."

According to Chattogram Port data, the domestic company Saif Powertec has been operating the New Mooring Terminal since its inception in 2007 – under the Open Tender Method for only two years, and the remaining years under the Direct Procurement Method. 

Munshi Md Moniruzzaman, joint secretary of the Port Division at the shipping ministry, informed TBS that the port authorities have indeed sent a letter requesting a decision on extending the current operator's contract for New Mooring Terminal operations. He said that the ministry would decide on the matter soon.

Process to involve foreign operator

The previous Awami League government initiated the process to involve DP World in this terminal. As part of this government-to-government (G2G) arrangement, a transaction adviser was also appointed. The current interim government is continuing this process.

Chief Adviser Muhammad Yunus recently reiterated the plan to appoint a foreign operator during his visit to Chattogram Port. His Press Secretary Shafiqul Alam also informed journalists during a visit to the port that the government plans to finalise the agreement with DP World by September.

Opposition from various quarters

The plan to appoint a foreign operator for the terminal has sparked strong opposition from various political parties, labour organisations, and other groups. These organisations are now holding protests almost daily. Their stance is that the New Mooring Terminal, built with domestic funds and operated by a local entity, should not be handed over to foreign entities. They are demanding that the government reverse its decision.

Hadi Hossain Babul, former member (admin and planning) of the Chattogram Port Authority, said, "Extending the tenure of the previous operator for an interim period before a new contract for Chattogram Port operations has happened before. The process of appointing a foreign operator for this terminal has not yet been finalised. It is also not possible to appoint someone new at this time. Therefore, there is no alternative but to extend the contract with the current operator."

Khairul Alam Sujon, vice president of the Bangladesh Freight Forwarders Association, commented, "Currently, there is no suitable alternative to Saif Powertec to ensure the smooth operation of New Mooring Terminal. It is most logical to continue operations through the current operator until the entire process of appointing a new operator is completed."

The New Mooring Container Terminal was constructed and equipped with machinery in 2007, funded by the port's resources at Tk4,000 crore. This Chattogram Port terminal features five berths, capable of accommodating vessels up to 200 metres in length and with a draft of 10 metres. The terminal also has a 292,287 square metre container storage yard, including 700 reefer plugs.

The New Mooring Terminal has an annual container handling capacity of 1.1 million TEUs (twenty-foot equivalent units), though it currently handles 1.3 million TEUs annually. Presently, this terminal generates Tk1,000 crore in annual revenue for Chattogram Port. Approximately 55% of Bangladesh's import and export cargo is handled through this terminal.