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China offers to build, fund Bangladesh deep sea port

Publication Date : 28-09-2012

 

China has proposed to invest in four mega infrastructure projects of Bangladesh, including the US$5-billion deep-sea port and $700-million multi-lane tunnel under the Karnaphuli river in Chittagong.

The Bangladesh government, however, is going slow on the deep-sea port issue, as it finds itself in a quandary over whom to pick with three other countries -- Japan, India and the US -- showing interest in building the port, two policymakers of the government said requesting anonymity.

Acknowledging Bangladesh's dilemma, China has said it is open to building the deep-sea port in partnership with other countries.

“We have no problem building the port in partnership with India or the US or any other country,” said Li Jun, the Chinese ambassador to Dhaka, while exchanging views at The Daily Star office in the capital on Wednesday.

He said China might give soft loans for the implementation of the projects. “It can also be done under the government-to-government formula or by engaging private sectors.”

Of the four countries, China was the first to make a formal offer to invest in the deep-sea port.

Ambassador Li Jun said a Chinese company was ready to invest in the infrastructure projects and was awaiting a response from the government. The company had even opened an office in Bangladesh three years ago, he added.

“China is waiting for a concrete response from the Bangladesh side. Once we have it, we can determine whether it will be a government-to-government or a public-private partnership deal,” said the Chinese ambassador.

He said a high-level delegation from China would visit Dhaka next month to discuss the projects and investment.

The Chinese envoy believes this port can turn Bangladesh into an economic hub of the region. South China can benefit from this port once another project to link Bangladesh with China is also implemented.

The two other projects China has proposed are the construction of Bangladesh-Myanmar road corridor (a part of the Asian Highway) and a Chinese industrial park near the river Karnaphuli similar to that in Shanghai.

China Communications Construction Company (CCCC), a Chinese state-owned company now repairing the Jamuna bridge and conducting a feasibility study of the proposed Karnaphuli tunnel, submitted the proposal to the Economic Relations Division (ERD) and the principal secretary to the prime minister on August 1.

CCCC proposed the four projects under a single package. It offered to provide the entire money needed to set up the industrial park.

A top ERD official said, “We are not thinking about the Chinese proposal right now. We will look into that once the Padma bridge issue is over.”

Captain Shariful Ahsan, chief executive officer of Deep-Sea Port Cell, said, “We should not hurry with a mega project like the deep sea port. We will wait for more proposals and then go for the most suitable bidder.” The cell was formed in August 2010 for quick execution of port-related decisions.

A Japanese firm conducted the Techno-Economic Feasibility Study on the proposed port at a cost of 140 million taka ($1.71 million). The study, submitted to the shipping ministry in July 2009, recommended forming a deep-sea port authority and passing a deep-sea port law immediately.

The government has yet to make any move on these issues. So far, it has only selected the site (Sonadia Island) for the deep-sea port.

The Japanese study outlined a three-phase construction plan and assessed a huge financial potential.

The first phase was supposed to start at the end of 2011 and be completed by 2015 at a cost of 130 billion taka. As per study, the port could go into operation in 2016 if the suggested work was done in time.

The second phase could be completed in 2035 and will require 260 billion taka. The country would have got a fully-fledged international port with the completion of the final phase by 2055 at an estimated cost of 11 billion taka.

The study estimated that the port would boost the country's GDP (gross domestic product) growth by 2 per cent, as it would generate huge employment, increase export and import and raise the country's capacity to handle cargos.

Experts say there is no alternative to a deep-sea port as the capacity of Chittagong port will be exhausted by 2015. Bangladesh will face serious problems without a deep-sea port once transit is allowed to India, Nepal and Bhutan.

“We are in a fix as to what to do. If we take help from one country, the other bidding countries may not take it easy considering the present geopolitical dynamics. That's why we should proceed cautiously,” said a senior government policymaker preferring not to be named.

He said that among the interested parties, the US seemed to be the most enthusiastic. The American embassy in Dhaka and visiting US envoys have talked to government policymakers on the issue more than 20 times.

Considering the geostrategic importance of the deep-sea port, India too has talked to government policymakers at least seven times, while China came up with open proposals more than five times.

Meanwhile, the 3.1-kilometre tunnel under the Karnaphuli river is making little progress. The feasibility study of the project is still not completed.

The theme of the Chinese Industrial Park on the eastern side of the Karnaphuli is “One city and two towns”. The western part of the river has been prospering but the eastern side is hardly developed.

“We are very keen to set up the industrial park, but for this we need a vast area of land. We have requested the government to manage the land,” said CCCC General Manager Wu Guangsheng.

The proposed project to build a road linking Bangladesh and Myanmar has also remained shelved for years due to non-cooperation from the Myanmar government.

According to a plan, the project can be implemented in two phases. In the first phase, a two-kilometre road from Ramu to Gundum in Bangladesh and a 23-kilometre road between Taungbro and Bolibazar in Myanmar can be constructed.

Sources in the communications ministry said Bangladesh had proposed that Myanmar implement the first phase with its own fund, but Myanmar did not respond to it.

In the second phase, Myanmar is to set up a 110-kilometre road link inside its territory, between Bolibazar and Kyanktow. There is a road linking Kyanktow with the Chinese province of Kunming, which links up with the Asian Highway Network.

*US$1=81.73 Bangladeshi taka

 

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