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The Mongla Port Authority’s plan to undertake a massive development work to expand, modernise and build the capacity of the port has received a major boost as uncertainty over funding is set to disappear.
The government has long been seeking external funds to develop the capacity of the port in the southern region with a view to cutting reliance on the Chattogram port and facilitating the growing international trade of Bangladesh.
The expansion plan has now got a fillip after China and India agreed to provide the much-needed financing.
The plan is one of the 27 projects that Dhaka and Beijing agreed to execute with Chinese assistance under an umbrella deal struck during President Xi Jinping’s Dhaka visit in 2016.
Since then, the government has been trying to secure funds from China for the project.
Now, China has agreed to bankroll the expansion and modernisation of Mongla port facilities project, said Rear Admiral Mohammad Musa, chairman of the Mongla Port Authority (MPA).
“Beijing has given its approval to finance the project. The Chinese embassy in Dhaka has informed the finance ministry about it.”
Bangladesh has sought $353.52 million from China. The size of the fund may increase or decrease depending on the requirement, according to Musa.
The project is expected to beef up the efficiency of the seaport.
In 2016, the MPA struck a deal with China National Complete Engineering Corporation. But it fell through due to the delay in fund mobilisation.
It signed a memorandum of understanding with China Civil Engineering Construction Company in July 2021 to implement the project.
The Chinese approval came after the MPA appointed Egis India Consulting Engineers Private Limited as the consultant for a capacity-building project involving Tk 6,014 crore. The two sides inked a deal on December 26.
In 2020, the Executive Committee of the National Economic Council approved the capacity-building project.
Of the sum, the government of Bangladesh will provide Tk 1,555 crore and the rest of Tk 4,459 crore will come from India as project assistance under its third line of credit for Dhaka.
The implementation period runs from January 2020 to July 2024. Once the project is implemented, cargo and container handling will be possible through the berthing of more ships.
“We will invest the Chinese fund for the modernisation of the port to provide quality and quick services. The Indian fund will be used to build the capacity,” said Musa.
“We will invest the funds for the construction of infrastructure such as jetties and adoption of technologies to run the port efficiently.”
China has asked the government to strike business contracts in order to complete the required pre-approval procedures. The loan application evaluation material will have to be submitted to the Export-Import Bank of China.
Under the China-backed project, container terminals at jetty no. 1 and 2, container handling yard, container delivery yard, vessel jetties, sheds, and offices would be constructed, among other facilities.
Besides, a mechanical workshop, equipment yard, equipment shed and pool, the overpass for rail crossing, and the river dam along with the roads and recreation facilities will be built.
The dredging is underway in the Pasur river, the main channel. Once it completes, vessels with drafts up to 9.5 metres would be able to enter the port jetty.
Mongla Port’s importance has grown after the opening of the Padma bridge in June last year.
The port handled 1.07 crore tonnes of cargo in the July-May of 2021-22. It was 1.19 crore tonnes in the entire 2020-21, data from the MPA showed.
“We have already started to reap the benefit of the port. There is a huge potential of the port in handling cargo and facilitating export and import activities,” Musa noted.
The authorities earned Tk 340 crore last fiscal year, the highest in the port’s 70-year history. It was Tk 316 crore a year earlier.
In FY22, a total of 20,400 cars were imported through the port, up from 14,474 units in FY21.
“We are offering a lower turnaround time and it will improve further once the projects are implemented,” Musa added.
(TDS)
