Bangladesh and India have moved closer to launching a direct coastal shipping line as the two countries have made progress on two vital issues -- settlement of insurance for ships and determining the standards of the ships.
Sadharan Bima Corporation of Bangladesh and General Insurance Corporation of India will act as the coastal vessels' insurers in their respective countries, Commodore M Zakiur Rahman Bhuiyan, director general of the Department of Shipping, told The Daily Star yesterday.
“We are expecting a trial run for coastal shipping in October,” he said.
Officials said both the countries have agreed to buy insurance policies up to $10 million each.
On the standards of the vessels, Bhuiyan said his department has already asked vessel owners to send at least 10 ships, which will be surveyed by foreign firms to see if they are capable of operating on the route.
Meanwhile, cargo vessel owners said the move will benefit Bangladesh immensely as the country imported nearly $5 billion worth of goods from India in fiscal 2013-14. Many of these goods were brought to Chittagong or Mongla port via a third port such as Singapore or Colombo, which pushes up both freight costs and time.
Currently, Bangladesh imports goods from Visakhapatnam port in Andhra Pradesh, Haldia port in Kolkata or any other ports in India via Colombo or Singapore, which makes sea cargoes costlier -- up to $110 per tonne.
“Direct shipping through coastal waters will reduce the cost to $35 a tonne,” Hamid said. “Bulk cargoes will cut the freight cost further.”
The new shipping line will also create employment opportunities for many Bangladeshis, he said. Most of the vessels to be used on the route will be from Bangladesh and each vessel will have nearly 15 crew members.
Shipping ministry officials said formal coastal shipping between the two countries will be launched commercially once a protocol agreement is signed at the secretary level.
“We are now drafting the contents of the protocol,” said the director general of the Department of Shipping.