Rethinking the case of Payra: Port infrastructure diversification is a priority

International trade is increasing rapidly and is projected to reach around $140 billion by 2025. By 2041, Bangladesh's exports alone are expected to amount to $300 billion. To accommodate this growth, port infrastructure must be diversified and modernised to meet emerging demands.

At present, Chittagong Port handles approximately 90% of Bangladesh's international trade and around 98% of its container traffic. With trade volumes continuing to surge, it will soon be unfeasible for a single port to bear such a burden.

Among the country's four seaports, Chittagong and Mongla are classified as large seaports, while Payra is a smaller port, and Matarbari is under development as a deep-sea port. In addition to these seaports, Bangladesh has about 24 land ports, of which 16 are currently operational. 

In the fiscal year 2023–24, these land ports handled 16.02 million metric tonnes (MT) of goods, supporting the country's international trade. These land ports are typically located along Bangladesh's land and inland water boundaries with India, Nepal, Bhutan, and Myanmar.

Seaports and land ports play critical roles in transporting both exports and imports, including raw materials, machinery, and industrial equipment. Ports are essential for sustaining the production cycle. Overreliance on a single port, however, has led to congestion, which significantly affects trade. Therefore, the operationalisation and enhancement of other ports are vital for maintaining the dynamism of Bangladesh's economy, especially as the country transitions from its LDC (Least Developed Country) status.

The construction of Payra Port was inaugurated in 2016 with an initial plan to develop it as a deep-sea port. This plan was later revised, and the port is now being constructed as a standard seaport. Consequently, its location was shifted 65 kilometres inland from its original offshore site to the mouth of the Rabnabad Channel.

The Payra Port Authority (PPA) was established under the Payra Port Authority Act 2013, and the port's foundation was laid on 19 November 2013. A British consultancy, HR Wallingford, conducted the feasibility study, while the Dutch firm Royal Haskoning prepared the masterplan in 2019. 

Ships began entering the outer anchorage of the port in the same year. To date, 3,298 domestic and foreign vessels have called at the port, generating BDT 1.68 trillion in revenue, according to one study. The port remains under construction and is expected to be completed by 2026.

Payra has strategic advantages. With the Padma Bridge providing direct connectivity, its road distance to Dhaka is 242 km—closer than Chittagong (259.2 km) and slightly farther than Mongla (218 km). Riverine distance to Dhaka is also favourable: 132 nautical miles (NM) from Payra compared to 148 NM from Chittagong and 171 NM from Mongla.

The port boasts a robust infrastructure, including road networks, warehouses, terminals, administrative buildings, and river dredging systems. The Development of Infrastructure and Support Facilities (DISF) project is one of its most successful initiatives. The Payra Port First Terminal Development Project (PPFT) and the Rabnabad Channel Dredging Project support capital dredging and navigational channel management.

The Rabnabad Channel serves as Payra's main access route. This 4 km-long navigational channel links to the Bay of Bengal. The channel's depth must be maintained through continuous dredging to ensure smooth vessel movement. In collaboration with Belgian company Jan De Nul, the PPA agreed to dredge a 75 km stretch of the channel to provide a draft of 10.5 metres, sufficient for ships carrying up to 55,000 tonnes. However, the project's location has made it prone to siltation, reducing feasibility and creating frustration among stakeholders.

Despite these challenges, Payra Port is a vital piece of infrastructure for the economic upliftment of the southern region, especially the Khulna and Barisal divisions. These regions possess abundant raw materials for industrialisation but have been underdeveloped due to infrastructural constraints. An industrial zone has been established near Payra, and two power plants were planned. One is operational but is facing logistical difficulties in coal transport due to port limitations.

To unlock the region's full economic potential, further development is needed—especially in rail and road connectivity, power stations, shipbuilding, and terminal facilities. Local residents have shown significant cooperation during the rehabilitation process, with school buildings, houses, mosques, and ponds built for those displaced from ancestral lands. The proposed naval base at Payra could also help safeguard national assets, including submarines, enhancing maritime security.

Once Matarbari becomes fully operational, in tandem with Mongla and Payra, Bangladesh will be well-positioned in the international trade landscape. While Payra is not yet fully functional or profitable, it holds the potential to become a critical component of the country's port infrastructure if properly maintained.

Regular maintenance dredging is essential at all ports, including Mongla and Chittagong. Sediment accumulation reduces navigable depth and hampers vessel movement. To ensure efficient operations, Bangladesh requires a national dredging guideline, similar to international standards, along with trained personnel. The Bangladesh Maritime University could play a key role in capacity building.

For Mongla, maintenance focuses on dredging the Pashur Channel to maintain 8.5–10.5 metres depth at the jetty front. Chittagong also needs ongoing dredging. Payra intends to undertake its own dredging to cut costs, but an investment plan is necessary for long-term solutions.

The coastal location of Payra makes it susceptible to cyclones and regular tidal siltation. These natural conditions necessitate continuous dredging of the Rabnabad Channel, where sediment accumulation has reduced navigable depth. As a result, mother vessels can no longer dock directly at Payra. Coal is now offloaded at Chattogram and transported via lighter vessels, increasing transport costs and raising electricity prices.

Although consistent dredging could resolve this issue, the cost remains substantial. Since April 2024, after the PPA took over dredging responsibilities from Jan De Nul, the channel's depth has again diminished—ranging between 5.9 to 6.5 metres from low to high tide. 

This makes berthing of large vessels impossible. Currently, the port is mostly used for coal transportation to the power plant. Unless a permanent dredging solution is implemented, the port's operational capacity will remain limited.

Frustration surrounding the Payra Port Project has grown due to cost overruns associated with maintaining navigability. However, with over 72% of the construction already complete and substantial public investment made, abandoning the project is not viable. It remains a symbol of hope for the industrial aspirations of the southern population.

Each port in Bangladesh offers distinct advantages. Chittagong dominates in import trade, with Inland Container Depots (ICDs) supporting exports. Mongla specialises in roll-on/roll-off (RO-RO) services. Payra's role could be redefined to serve as a connecting feeder port, offering transhipment and bulk cargo services. With integrated road and rail links, it has the potential to enhance hinterland connectivity.

The decision to relocate the port from its original offshore site has proven costly due to ongoing siltation. Still, with construction nearly complete and extensive funds already spent, the focus should now shift to maximising the port's utility. Strategic dredging, revised infrastructure planning, and geopolitical foresight are required to transform Payra into a national asset, bringing long-awaited development to southern Bangladesh.

Ferdaus Ara Begum is the CEO of BUILD-a Public Private Dialogue Platform works for private sector development

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard