Bangladesh gets first foreign port operator

Port management in Bangladesh entered a new era yesterday through the appointment of a Saudi Arabia-backed foreign operator to equip and run a newly-built container terminal of the Chattogram seaport.

The operator, Red Sea Gateway Terminal International (RSGTI), will invest approximately $170 million to install equipment at the Patenga Container Terminal's (PCT's) upgradation, read a press release from the Sustained Infrastructure Holding Company, one of the operator's investors.

RSGTI signed an agreement with Chittagong Port Authority (CPA) to equip and operate the PCT, which is located at the estuary of the Karnaphuli River, for 22 years.

The signing ceremony was held at the Prime Minister's Office, where Prime Minister Sheikh Hasina and visiting Saudi Investment Minister Khalid A Al-Falih were present.

"Bangladesh's macroeconomic environment is on a positive trajectory, characterised by a rapidly growing economy, a stable regulatory and legal framework, and a population exceeding 160 million that provides a dynamic demographic for sustained economic development," the press release read.

The port serves as a gateway for 90 percent of Bangladesh's import and export activities, it added.

The terminal will therefore target the fast-growing import and export market that has an expected annual gateway volume growth rate of 7 percent per annum, underscoring the potential for higher revenues and margins over time, said the company.

RSGTI is a sister concern of Red Sea Gateway Terminal (RSGT), the operator of Saudi Arabia's largest terminal facility at Jeddah Port.

Businesses, port users and officials hoped that the appointment would ensure optimum performance in the new terminal's handling of cargo and ships.

They believe it would also encourage other local private operators as well as the CPA, which are engaged in running three other existing terminals, to enhance their efficiency.

Built on 32 acres of land and containing three 200-metre jetties and one 220-metre dolphin jetty, the PCT will allow berthing of vessels at the shortest possible time given its close proximity to the estuary.

Three vessels with 10 to 11-metre draft will be able to berth at a time in the terminal, having an annual capacity to handle 5 lakh TEUs (twenty-foot equivalent unit) of containers.

Addressing the ceremony, Prime Minister Sheikh Hasina said: "I hope that the RSGTI, with its reputation for managing the Jeddah port and other terminals, will manage the Patenga Container Terminal with its skills and technical know-how."

By doing so, the Chattogram port's operations will become more efficient and meet international standards, she said.

"Consequently, our economy will benefit from a significant decrease in import-export expenses," she said.

The PCT will act as a gateway to global trade, opening up new opportunities for the country's businesses to connect with the world, said Hasina.

"We look forward to a future where the Patenga Container Terminal will become a driving force for economic growth and prosperity in Bangladesh," she said.

Right after the signing, Salman Fazlur Rahman, the prime minister's private industry and investment adviser, accompanied a Saudi delegation led by the investment minister on a visit to the PCT.

Speaking to journalists, the Saudi minister said: "We are very delighted that the honourable prime minister has supported this idea from the beginning to create a significant footprint for the Kingdom of Saudi Arabia represented by our global port operator RSGT here in Bangladesh."

Terming the PCT as a wonderful facility which has been built to the highest standards, the Saudi minister said the terminal would be full of equipment within a very short period of time.

This is not just about a major container terminal operation, this is a hub for Saudi Arabia to grow its economic participation in Bangladesh, said Al-Falih.

"We expect our Saudi shipping company, Bahri, to frequently export here more and more. We expect to be able to bring more traffic to this port in terms of containers through the relationship that we have with global shipping lines," he said.

Saudi Arabia is in the process of getting a special economic zone which would be a forward staging area for strategic commodities from Saudi Arabia, which would be supplied to the market in Bangladesh, he said.

"Since this port will become a hub for import and export, we can serve a bigger market, especially the Bay of Bengal, which needs a quality port as well as a stable market and stable nation like Bangladesh," added Al-Falih.

Mentioning that Saudi Arabia is eager to do more in Bangladesh, he said energy was a big area for Saudi Arabia to be investing in here.

"We will see a number of companies investing in power generation, infrastructure, agriculture, food processing, technology, data centres and cloud computing and many other fields in Bangladesh," said the minister.

The future is bright for the relationship between Saudi Arabia and Bangladesh, he added.

Hailing the appointment, Syed M Tanvir, former vice-president of the Chittagong Chamber of Commerce and Industry, hoped for the country's port operations to be significantly upgraded through a reduction in import and export handling time.

This initiative will enable other terminal operators as well as the port authority to gain technical knowhow and enhance their performance as a whole, said Tanvir, also managing director of Pacific Jeans, one of the leading denim exporters.

Bangladesh Freight Forwarders Association Vice-President Khairul Alam Suzan said the appointment would create a scope for healthy competition.

"As the foreign operator will install modern equipment and ensure better service in PCT, it should compel the port authority to ensure such equipment and services in the existing terminals since port users always prefer better services at lower cost and time," he opined.