Revisiting Chittagong Port: Welcoming changes and looking to the future

Some 27 years ago, the Asian Development Bank developed a project that recommended rather noteworthy changes to take Chittagong Port into the future that it deserved as a port of significant strategic and commercial importance. 

Looking back, the elements of the project were complex and wide-ranging but offered long-term solutions. On capacity building: (i) technical assistance for developing Instruments of Commercialisation to assist in the transition to modern seaport operations, including commercial management of the Chittagong Container Terminal (CCT), port-wide strategic planning and management, and a Worker Education Program; (ii) technical assistance for an oil spill containment study. 

On technical efficiency targets: (i) achievement by 2003 of a reduction in the average dwell to a maximum of 9.5 days at Chittagong Port; (ii) achievement by 2003 of average ship-to-shore handling rates of 3 ship-days for Chittagong Port, and 5 ship-days for Mongla Port. 

On improved port efficiency: (i) adoption of upward revised schedule of tariffs to achieve higher levels of throughput and reduce container dwell time; (ii) implementation of an upward adjustment of container handling tariffs to reflect the need to recover incremental investment costs; (iii) increase in channel fees aimed at recovering incremental investment costs for a fast pilotage service, installation of night navigation aids, and efficient communication system. 

On modernisation of customs procedures: (i) lifting of the restriction on location of inland container depots (ICDs) from within 20 km of Chittagong Port to locations anywhere in Bangladesh that would facilitate container movement and could fulfill legal and administrative oversight requirements imposed by Customs; (ii) consideration of increase in the number of import items that can be coursed through ICDs, and the extension of ICD facilities to less than container load as well as full container load; (iii) invitation to the World Customs Organization (WCO) to carry out a diagnostic study of Customs laws, procedures and practices in Bangladesh; (iv) formal migration of Automated System Customs Data (ASYCUDA) Version 2.6 to ASYCUDA++; (v) procedures to further simplify and modernize the current complex import taxation system, based on recommendations of a Working Group comprising of representatives from NBR, WCO and international computer experts on ASYCUDA++; 

Finally, on commercial management of port operations: (i) conclusion of commercial arrangements with an operator qualified and experienced in modern seaport container operations to manage and operate CCT as an independent commercial entity. Technical support in developing and concluding such arrangements will be provided under the TA for Developing Instruments of Commercialisation for Chittagong Port. Funding would also have been provided for essential equipment, such as gantry cranes. 

The approach to developing the proposed $165 million project, which included Mongla Port efficiencies, was to engage in substantive inclusive discussions with all port interest groups – associated ministries, port management, port workers, chambers of commerce, Chattogram City officials, and port specialists. An ADB-financed national forum on "How to Make Our Ports Function Better" was also conducted in July 1998, attended by Members of Parliament, national-level policy makers, port users and national-level trade union representatives.

Preceded by technical studies, the port project evolved over some 18 months but finally stalled, and finally collapsed, on one issue – corporatisation of Chittagong Port and the management of container operations by a single international operator. The detailed draft Aide-Memoire submitted to the Government in July 1998 pointed out that, "Given the current CPA mandate, economies of scale and proposed developments at other potential container handling locations, the management of the CCT must be under unified control to enable fast-moving container handling. In order to ensure optimum efficiency, control and coordination over integrated operations at the CCT, an operator qualified and experienced in modern seaport container operations will manage and operate the CCT as an independent commercial entity." 

Of all the proposals, the $1.0 million Oil Spill Study was approved in 2001, which focused on the effects of a potential oil spill on mangroves in the Sundarbans Reserve Forest (SRF) and development of manuals on port environmental management, forest oil spill impact assessment and monitoring, oil spill response training, as well as providing fellowships in field operations.

Creditably, several of the suggestions have been implemented on CPA's own initiative. Customs procedures have improved, inland container depots have been developed, and turnaround times shortened. It is reassuring that even after some 27 years, the Government has moved toward appointing a global operator to run the New Mooring Container Terminal (NCT). echoing our own view at the time that "neither the ownership of NCT nor the country's sovereignty would be at stake if a foreign operator is appointed … Rather, maximum financial benefit would be gained, and the port's efficiency would be enhanced through competition." 

Nonetheless, making CPA a technology and port specialist-driven institution remains a major target. Take Port of Singapore Authority (PSA). With 55 berths, PSA has a container handling capacity of almost 44 million twenty-foot equivalent units (TEUs), PSA's four terminals operate as one seamless and integrated facility, including reefer points, hazardous cargo handling, warehousing and a full range of depot services. With regulatory functions vested in the Maritime and Port Authority of Singapore, management of port operations is led by a board of 16, including government representatives, and a large operational team of technical, financial, legal and management experts. CPA has some 15 departments but the lack of management and staff familiar with modern port operations is clearly apparent, especially critically-need digital technologies such as in vessel traffic management.  

Introducing major administrative and technological changes at CPA will certainly take time there is a need to generate more momentum and a concerted effort at change, including looking at (i) the need for technical leadership in key positions for Port management (port management, commercial operations); (ii) opportunities for digitalisation for port modernisation; (iii) outreach to improve transport operator relationships; (iv) revisiting arrangements with the Dockworkers Board; (iv) shipment clearance governance issues (port officials, shipping agents, stevedoring agents, C&F agents); (v) pre-shipment inspection contractual arrangements and agent performance; (vi) congestion planning and charges (berths, storage, cargo handling, rentals); (vii) port security systems; (viii) port sanitation; Ix) revisiting the mixed pilot services model to improve efficiencies.  

While port systems are complex and require long-term planning efforts, there can be immediate returns to initiating the suggested actions. Changes to leadership and management, particularly technical competencies, would go a long way to improved port efficiencies and governance, which cripple the ability of shippers to move goods efficiently, and at significant cost to the national economy. It will be important to delink political direction that interferes with organisational and operational efficiencies. Implementing some of the suggested activities as short-term priorities would provide initial guidance to port authorities that could look to adoption and implementation after national elections. As always, private sector participation continues to be a key aspect to recognise and respond to as the port evolves into the future. 

Albab Akanda is a former Asian Development Bank staff.

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.