Chattogram Correspondent:

A loan agreement with the international lender World Bank (WB) for the development of the climate-resilient breakwater and dredging of the access channel under the highly anticipated “Bay Terminal Development” project is likely to be signed in June this year.

The Chattogram Port Authority (CPA) has recently sent the reconstituted revised development project proposal (DPP) for this component to the shipping ministry. The DPP is currently awaiting evaluation by the Departmental Project Evaluation Committee (DPEC). Once approved, it will be placed before the Executive Committee of the National Economic Council (ECNEC).

CPA Secretary Md Omar Faruk that after securing approval from the evaluation committee, the project is expected to be greenlit by ECNEC in March or April.

“If everything proceeds as planned, we are hopeful of signing the loan agreement with the WB in June this year,” the secretary stated.

Once the process is completed, an international tender will be floated to engage a contractor in compliance with the WB’s procurement guidelines, Faruk noted.

Notably, the Board of Executive Directors of the WB approved $650 million for this component on 28 June last year.

The funding aims to help Bangladesh develop the Bay Terminal – the largest expansion initiative of the port – to enhance the country’s global trade competitiveness and reduce import and export costs by increasing the port’s operational efficiency and attracting private investment.

A 6.217-km climate-resilient breakwater will be developed with this assistance to protect the harbour from waves, currents, and extreme weather. Additionally, dredging of the port basin, entrance, and a 7-kilometre-long, 600-metre-wide access channel will be carried out to facilitate vessel movement.

According to port sources, the Bay Terminal, which will feature one multipurpose and two container jetties, is projected to handle over three million containers annually, compared to the current 3.2 million boxes handled by the port.

At present, the port allows berthing for vessels with a maximum draft of 9.5 metres and a length of 190 metres only during high tide and daylight. Vessels carrying 2,400 containers can currently berth at the jetties. However, with the breakwater and access channel in place—at a cost of $850 million – vessels with an 11.5-metre draft and 300-metre length will be able to dock, carrying 4,800 containers, 24 hours a day.

The $3 billion project is poised to transform Chattogram Port into a regional hub, creating employment opportunities for 13,500 people. Of the total cost, $2.4 billion is expected to come from foreign investors.

Notably, the port recorded a year-on-year growth of 7.42% in container handling and 3.11% in cargo handling in 2024 compared to 2023.

The port currently facilitates the export and import of containerised goods at the General Cargo Berth, Chattogram Container Terminal (CCT), New Mooring Container Terminal (NCT), and Patenga Container Terminal (PCT). Considering future challenges, a strategic master plan for the port was formulated in 2013 with financial assistance from the Asian Development Bank.

Based on this plan, developed by the Hamburg Port Consultant of Germany, the “Bay Terminal” project was conceived along the Bay of Bengal on the southern part of the city.

To carry out a pre-feasibility study, Sellhorn and HPC of Germany, along with local firm KS Consultant, were engaged in 2017. The consultancy firms later submitted a conceptual master plan and a pre-feasibility study report.

The “Bay Terminal Construction” project was approved as a significant Public-Private Partnership (PPP) project by the Cabinet Committee on Economic Affairs (CCEA) on 4 August 2019.

Among the three terminals, the multipurpose terminal was to be developed and operated under CPA management, while the remaining two were to be managed under the PPP G2G model by private operators.

Following a directive to revise the terminal’s length, South Korean firm Kunhwa-DY JV was appointed in April 2022 and submitted a fresh master plan and study report later that year.

Projections from the report estimate that container traffic will rise to 6.3 million, 8.6 million, and 11.5 million units in 2030, 2035, and 2040, respectively. The port will also need to handle 129 million tonnes and 170.8 million tonnes of cargo in 2027 and 2040, respectively.

The three terminals will have 13 jetties developed along a 3.95-kilometre stretch beside the City Outer Ring Road. Vessels with an 11.5-metre draft will be able to dock using the 6.217-kilometre breakwater.

According to the master plan, the multipurpose terminal, container terminal-1, and the breakwater and access channel are expected to be operational by 2030, while container terminal-2 is scheduled for completion by 2035.

Moreover, the PPP Authority engaged Indian firm Ernst & Young LLP as the transaction adviser for developing and operating the two container terminals under the PPP G2G framework on 29 June 2022. The firm has already submitted the Transaction Structure Report (TSR).

The CPA also engaged Sellhorn-AQUA-KS JV of Germany in September 2022 for the design and estimation of the breakwater, access channel, and capital dredging. The firm submitted an interim report in June last year.

The CPA drafted a DPP for the project in May last year, but the DPEC requested its reconstitution.

Among the required 879.63 acres of land, CPA has already acquired 66.85 acres of private land and 500.63 acres of government land in the Patenga -Halishahar area, along the City Outer Ring Road, for project development.

A non-binding memorandum of understanding (MoU) was signed between the AD Ports Group of the United Arab Emirates (UAE) and the CPA for developing and equipping the multipurpose terminal on 16 May last year. The remaining two terminals are likely to be developed by PSA Singapore and DP World of Dubai under MoUs signed on 12 February 2018 and 17 February 2019, respectively, according to sources.

According to industry insiders, the Bay Terminal project – the largest expansion initiative aimed at boosting Bangladesh’s export-import businesses – will be an economic game-changer in the coming years.