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Opportunities In Crisis

July 24, 2017

Congestion of container vessels cripples operation of country’s premier port. Crash of two gantry cranes on the eve of Eid hampered day to day operations of the port, causing delay in unloading the cargo.

The sluggish pace of port operation and the long queues of cargo vessels stirred  business community and precipitated meeting after a meeting with high govt officials.

Govt as usual has gone through the same drilling as it did in the past: evade responsibility and pass the blame.

The RMG exporters bear the brunt of this congestion. Several western countries  have put into place air cargo ban on Bangladesh. Air cargoes, though expensive, have proven to be the last ditch effort of the exporters to meet the deadline set by buyers.

As that card is limited on the table, exporters fear loosing future orders if the crisis prolongs. For this reason, they could not keep their calm and dressed down concerned officials in the official meetings.

The news of Chittagong port crisis has reached to RMG buyers and international ports. H&M officials have already expressed there concerns to the concerned authority and BGMEA.

According to a newspaper report the congestion of vessel  takes a vessel 12 days to berth in the jetties.

Every day 15 to 17 vessels await in outer anchorage. In this backdrop international vessel companies hike the rent of the container.

Country’s importers and exporters hinge heavily on this port. So the long tailback of cargo vessels caused a consternation among the merchant bodies.

As a drastic measure the port authorities nodded positively to a proposal of using the berthing facilities of Chittagong Urea Fertilizer Company Limited (CUFL).

The CUFL jetties were at the heart of a debate when ULFA arms haul rocked the nation.Police accidentally discovered arms consignments destined to neighboring states of India.

Moreover unlike the Chittagong port, CUFL jetties lacked the scanner to detect radioactive materials.

The new Payra port has not been considered as an alternative in spite of the fact that the new port has berthing facilities for bulk carriers. If the port were operational immediately after the onset of the crisis, tailback of vessels would not turn into worse.

The congestion of port also coincided with the soaring prices of coarse rice. Govt imported rice from abroad to resolve the crisis. If port authorities did not  prioritize unloading the rice carrying vessels, the price of rice would rise further.

This is where the port crisis becomes extremely important. Unless there is a direct intervention by the govt–a round the clock unloading of containers to ease the congestion– it will evidently raise the price of kitchen commodities.
And if the unfolding of this sort of  crisis influences an ongoing political  event, its consequences will be devastating for a govt.

The crane crash cropped up 2 days before Eid. Yet the authorities turned a blind eye to this congestion. They acted only when the international press carried the news on container congestion in Chittagong port.

The sheer number of unloaded containers also has repercussions. In the wake of this congestion, Chittagong port authorities unloaded more than nine thousands containers in a single day , a record for the port authorities. But the problem is due to lack of space they have to be cleared without going through a standard scrutiny. This means authorities will not know whether the containers contain the declared goods.Perhaps many containers may evade the US installed scanner and watchful eyes of the customs.

The chief of Chittagong port hinted that an ongoing legal battle with Penang port authority of Malaysia also contributed to the worsening of the congestion.

His remark also left us pondering over other alternatives. Recently Sri Lankan President Sirisena made an official visit to Bangladesh.  FTA between the two countries was mooted and 13 MoU were signed. The MoUs included coastal vessel agreement. Sri Lankan port Hambantota is underutilized because of lack of investments. If the port gets a part of Bangladesh’s Malaysia-bound vessels, the port will ratchet up its operations.

More than one million TEUs (20-foot Equivalent Units) of containers are transported from Chittagong to other destinations across the country every year. A big part of this is done through highways.

Govt took initiatives to increase container traffic in waterways. Yet the route did not garner much attention of  exporters and importers, who still prefer highways and rail route.

I do not want to buy the conspiracy theories surfaced after the crisis at face value. However I do echo some of the questions raised:

Why the crisis was not resolved at the first place? Why was it delayed?  Why a senior admiral of Navy is heading the Chittagong port authorities while the Navy operates an inland container vessel company? Was the congestion engineered to increase the frequency of container transport through waterways where a company closely associated with a ruling party leader and the Navy run company dominate the inland container ship business? Is it true that rent of container in the case of riverine transport is pegged high? Why do other ports not have scanners that could detect radioactive hazardous materials?

Country’s growth potential is hobbled by bottleneck of infrastructure. This kind of trouble in inadequate infrastructure will cut a swathe through export earnings. I wonder how the govt will achieve the $50 billion RMG export mark with creaky infrastructures and  men whose interests are not aligned with those of the department they are heading. An anemic economy will not bring any opportunities for our hard working businessmen, let alone cronies.


From → Analysis

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