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Inefficient port raises cost of doing business

Inefficient port raises cost of doing business
July 30, 2017 admin
In Business, Finance

Star Business Report

 The cost of doing business has been increasing due to inefficiency of the country’s premier port in Chittagong, businesses said yesterday.

At present, it takes more than two weeks for release of goods from the port, whereas these were supposed to be delivered within 48 hours, they said at a discussion organised by the Dhaka Chamber of Commerce and Industry at the capital’s Lakeshore Hotel.

M Khaled Iqbal, chairman of the Chittagong Port Authority, was present at the discussion where exporters and importers voiced their grievances about the country’s premier port.

The non-cooperation among the service delivery agencies like the port authority, customs, clearing and forwarding agencies, transport companies and banks are mainly responsible for the delay in the release of goods, business leaders said.

Subsequently, the businessmen suggested involving the private sector in management of the port, through which 92 percent of the country’s export and import are done.

The port management’s inefficiency has to be borne by the businessmen ultimately, said Hossain Khaled, a former president of the DCCI. Last fiscal year, Bangladesh could not achieve its garment export target and longer lead-time at the port was one of the major reasons, said Asif Ibrahim, another former DCCI president.

Meanwhile, garment exports from Sri Lanka, Cambodia and India — all Bangladesh’s competitors in the global apparel trade — increased last fiscal year.

Shorter lead-time for excellent performance by their ports was one of the reasons for better export performance, he said.

Due to delays in Chittagong port, garment exporters tend to use the expensive air shipments to maintain the strict lead-time of buyers, said Faruque Hassan, vice-president of the Bangladesh Garment Manufacturers and Exporters Association.

“Delays in Chittagong port have been costing us abnormally at a time when profitability declined a lot and production cost rose,” Hassan said.

Had the Chittagong port performed even at the same level as the Colombo Port in Sri Lanka, the maritime cost would have reduced a lot and Bangladeshi exporters could have sent goods to the US for 0.6 cents and 0.8 cents per kg, said M Masrur Reaz, a programme manager of the World Bank.

“The number of equipment in Chittagong port increased a lot over the years, but the operational efficiency did not.”

Reaz came up with three suggestions for enhancing port efficiency: greater involvement of the private sector in port management, significant improvement of port governance and introduction of competition in service quality.

Some 68 tonnes from a consignment of 700 tonnes of steel products, imported for making pre-fabricated buildings at the Rooppur Nuclear Power Plant went missing from the Chittagong port, said Humayun Rashid, managing director of Energypac Power Generation.

 

“I have not found the consignment yet. I have to count the damage as I had made a commitment to my customers,” Rashid said, while calling for construction of a fuel oil store at the port.

Many ships do not want to carry goods from the Chittagong port whereas they are interested in transporting goods at very cheap rates from the ports in Malaysia and China, he added.

Eid holidays and natural disasters also affect the port performance, said Mahbubur Rahman, president of the International Chamber of Commerce, Bangladesh.

So, alternative mechanisms are needed for efficient management of the port.

Expressing grief, Rahman said Mongla port could not become a fully operational one even after so many years.

A section of businessmen use the Chittagong port as warehouses by delaying the release of their goods, he added.

In response, the CPA chairman said the port is capable of handling the current growth in cargo until 2019.

He went on to recommend businesses should increase their use of the Pangaon river port to reduce congestion at the premier port.

DCCI President Abul Kasem Khan also spoke.

Sources:  thedailystar

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