Transshipment deal with India likely this month

FT ONLINE

Bangladesh and India are expected to sign this month the much-talked-about transshipment agreement that would allow the latter to use Chittagong and Mongla ports to transport goods to its north-eastern states.

The cabinet recently gave its seal of approval for the proposed agreement.

The bilateral deal is expected to be signed during the shipping secretary-level meeting between the two countries. The meeting is scheduled to be held later this month, shipping secretary Abdus Samad said on Saturday.

The agreement will remain effective for a period of five years with a provision of auto-renewal for another five years. Either of the countries, however, could cancel the deal giving six months' notice.

Commenting on the issue executive director of the Policy Research Institute (PRI) Dr Ahsan H Mansur said this is a good business opportunity for the country.

"This will help mobilise some additional revenue. If countries like Singapore can be rich providing transshipment facility, why not us?" he asked.

"We should concentrate on strengthening the capacity of our ports to avail such an opportunity," he added.

On the other hand, international trade expert Manzur Ahmed said Bangladesh has no international obligation to provide the transshipment facility.

"So when we are going to provide such a facility to a country we have to think what we are going to get in return," he said.

"This will affect our manufacturing sector as we export a lot of goods to the north eastern states of India," said Ahmed, the trade and tariff policy adviser of Bangladesh Enterprise Institute (BEI).

"Now through using our ports and territory they will transport their goods from the western part to the north-eastern part, which will decrease the demand for our goods in seven-sister states."

Besides, it will raise congestions in both ports and on roads, which will affect the country's business, he expressed the fear.

Four routes were suggested in the proposed deal for the goods movements, which are -- Chittagong Port/Mongla Port-Agartala via Akhaura, Chittagong/Mongla-Daouki via Tamabil, Chittagong/ Mongla-Sutarkandi via Sheola, and Chittagong/Mongla-Bibekbazar via Simantapur.

According to the agreement, from the port the goods have to be transported to India by Bangladeshi trucks or vessels, Mr Samad said.

Shipping Secretary said other issues to be discussed in the meeting are, strengthening coastal shipping between the two countries, expediting the transfer of bodies of crew to their native country event of their death and improving the facilities of the land ports.

India is eager to strengthen the direct water freight corridor between the western and eastern part of India through Bangladesh. The issue will also come up in the meeting, officials said.

Presently, under the water protocol, Bangladesh allows three routes --Kolkata to Assam via Sundarbans and Goalanda, Kolkata to Karimganj via Sundarbans and Ashuganj and Baharampur to Assam via Rajshahi.

But the last route, which is from West Bengal's Barampur to North Eastern Indian states like Assam, is not being used regularly. India has planned to revive this route.

Recently, Indian shipping secretary Gopal Krishna told reporters that the Indian government aimed to set up a waterway freight corridor to connect the mainland with the north-eastern states via Bangladesh at a cost of Rs 50 billion (5,000 crore).

The proposed 900-km waterway would be used to transport freight from the northern and eastern states to the northeast and would start near Haldia in West Bengal then reached Assam through Padma, and Brahmaputra.

The freight corridor may reduce the cost of transportation by about 70 per cent.

Bangladesh shipping secretary said that India is financing a project to increase navigability of the Padma and the Jamuna. The work order for the project has been awarded, which will start this month, he added.

The issue of increasing the navigability of the Atrai River through conducting dredging in the Indian part of the river will also come up for the discussion.

The Atrai enters into India from Naogaon district and after flowing through several Indian districts it re-enters Dinjapur in Bangladesh.

Though the shipping secretary-level meeting is supposed to be held every year, the upcoming meeting is going to be held after a break of two years. The last meeting was held in 2015.