Traders will have to pay more for transportation of their goods between Chittagong and Dhaka if they want to use waterways between the destinations, using Pangaon Inland Container Terminal.
The Shipping Ministry on Monday hiked the water vessel fares for all empty and goods-laden containers for transportation of goods to and from Pangaon ICT and Chittagong Port through private container vessels.
When the government is struggling to attract traders to use the waterways through the port to make the Pangaon ICT fully operational, such initiative from the ministry may discourage users from using the port, said the traders. According to the circular that came into an immediate effect, the traders have to pay $110 from the existing $75 for empty 20 feet equivalent units or TEU. For goods-laden 20 TEUs, the fare was hiked at $220 $150.
Meanwhile, the fare was hiked at $440 from the existing $300 for goods-laden 40 TEUs, while it was hiked at $220 from $150 for the same-size empty containers.
The circular said the fare was increased to make the Pangaon Port operational and ensure regular schedule of container vessels in the route.
“Such steps will surely discourage the traders if not amended soon. I have cancelled three of my LCs with Pangaon and attached them with Chittagong Port due to the excessive hike,” said Dhaka C&F Agents Association Vice-President Lokman Hakim.
Although users said the decision will discourage businesses from using the port as it is already struggling to attract the traders, Chittagong Port Authority member (admin) Md Zafar Alam spoke differently.
He said it will not impact that much because the tariffs were set for the private operators.
“It is now up to the operators how much they can collect from the traders. It will be decided based on their demand and supply procedures,” he said.
The government in November 2013 inaugurated the terminal at Keraniganj, on the bank of River Buriganga, but it virtually remains idle since its inauguration.
The port was built to help reduce the cost of carrying goods and ease the traffic congestion on the Dhaka-Chittagong highway, but the traders have been avoiding the port mainly due to irregular vessel schedule and higher tariff charges.
According to a Pangaon Customs House report, the port remains unutilised mainly due to the higher cost of container vessels and other port charges as compared to Kamalapur Inland Container Depot.
All three CPA water vessels leased to private operator
The Chittagong Port Authority (CPA) on September 2 leased all three of its container water vessels – MV Pangaon Success, MV Pangaon Vision, and MV Pangaon Express, procured for Pangaon ICT to a private operator Summit Alliance Port Limited (SAPL) for five years as bareboat charter basis.
SAPL will use the vessels for their own river terminal at Mukterpur in Munshiganj.
The SAPL will pay a rent of Tk1.38lakh every day for using this and also has to encourage shipping line and freight forwarders to handle at least 20% of the container collected by the company through the Pangaon ICT for next two years.
“The three were leased to private operator as the port cannot incur more losses. However, if any licenced private operators want to launch operations in the route, they are welcome,” said CPA member (admin) Md Zafar Alam.
Port sources said leasing out the CPA vessels will not be a problem as at least five new vessels, including one from Nou Kolyan Foundation of Bangladesh Navy will join the Chittagong-Pangaon ICT route soon. Among them, one each vessel from Nipa Paribahan and Aryan Traders while two from Karim Brothers will join the route soon, may be by December.
It was learnt that the four private vessels are among the 32 companies that received licence from the government to operate vessel in the route. Currently, the users are not using the port for import of capital machinery and raw materials for production, which hold a major share of the import.
In last six months, a total of 14 water vessels landed at the port with 424 containers with different products including glassware, used auto motor parts, fabrics, lubricating oil, readymade garments, mobile accessories, tri-cycle parts, metal scrap, and foodstuffs.
From July to September of this fiscal year, Pangaon Customs House and its LC stations collected Tk37.47 crore against the target of Tk28.17 crore.
Excessive checking by CIC and intelligence may have adverse impact
The constant checking by the Central Intelligence Cell and the Customs Intelligence and Investigation Directorate under the National Board of Revenue (NBR) creates fear among businesses, said insiders.
Both the intelligence agencies now check almost all containers coming out of Chittagong, suspecting imports with false declaration, but they did not find any, thus putting an adverse impact on traders, they added.
In September, the intelligence teams checked all 46 containers of a vessel, based on secret information that the containers might have gold inside, but they did not find anything, said Lokman Hakim.
“I had 11 containers, including 10 import goods-laden container of my own business in the ship. Such excessive checking in the name of surveillance will lead to a loss of time and harassment for the traders, which will not bring any good for Pangaon ICT,” he opined.
Incentives on card for port users
The government is all set to cut down the different port charges, ranging from 40% to 70% to attract the users and to make the route competitive when compared with others.
Earlier, a committee formed to rationalise the charges has decided to reduce the rates that include port storage charge and handling charges.
“We have to reduce pressure in the roads. If a vessel can carry 200 TEU, it will reduce at least 600 trucks in the highways. We are trying to incentivise the traders if they use the Pangaon ICT,” said CPA member Zafar Alam.
He has also sought support from the private vessel operators to make the route popular.
It was learnt that the shipping agents will be given with 10 days free time to keep their empty containers at the terminal. Currently, traders have to pay for empty containers every day.
The tariffs for equipment charge, plus loading and unloading charges are all set to cut down by 70%.
“Currently, the rates do not stand at a competitive position due to higher costs. As the vessel fare was hiked, it will be rationalised by reducing the user fees,” said a CPA official.
The exporters will be incentivised by allowing them to keep their goods in the Container Freight Station as free, he added.
Exporters Association of Bangladesh President Abdus Salam Murshedy said the decision of container vessel fare hike will discourage traders from using it.
“We do not have any idea about when our goods will reach Dhaka if transported through Pangaon ICT. In this time, if the fare is hiked, it will have an adverse impact and traders will keep them away from using it,” he said.
Source: Dhaka Tribune