Growing Economy needs Expansive Port Infrastructure
The session discussed maritime and logistics infrastructure, capacity expansion happening in India, Bangladesh and Sri Lanka to benefit the trade movement
The South Asian region is the fastest growing economy and as it grows the importance of port related infrastructure expansion becomes more evident,” remarked Moderator and Chairperson,
Commodore A K M Faruque Hassan, (N) afwc, psc, BN, Chairman, Mongla Port Authority, Bangladesh.
“South Asia is the least integrated region and intra-regional trade accounts for 5 per cent, while intra-regional investment is less than 1 per cent. This highlights the potential for growth,” commented
Fayyaz Khundker, MD, Ocean Network Express (Bangladesh) Ltd.
Connectivity between neighbouring nations has to improve and this is possible only if bilateral governmental meetings and policies focus on it. Connectivity is not a standalone issue and needs contribution by all nations and by all means, which includes improving logistics infrastructure as well. A lot of trade in South Asia moves through expensive transit routes, for instance, cotton from
India moves via transhipment hubs to Bangladesh increasing the logistics cost. A beginning needs to be made on selected routes rather than opting for extensive coverage and government initiatives along with private participation through PPP will be effective. Technology and knowledge sharing among regional countries can help boost collaborative development.
Vinit Kumar, IRSEE, Chairman, Kolkata Port Trust, India elaborated on infrastructure development at Kolkata Port and how trade with Bangladesh through the port can be improved. Giving a brief intro about Kolkata Port, Vinit Kumar shared the port’s performance that was 58 million tonnes of total loading in 2017
(41 MT in Haldia and 17 MT at Kolkata) and this year 10-12 per cent growth is expected. Last year revenues were `2300 crores and this year 10 per cent growth is expected. The port has draft and vessel size restrictions due to which trans-loading is done. The port has anchorages at open sea and at Sagar and Diamond harbour. Two floating cranes are deployed and a jetty has been constructed outside the dock system. The cranes can discharge cargo at the rate of
8000 tonnes per day. The port is developing multimodal infrastructure for which the mainline from Haldia is being doubled. At Kolkata Port the container handling capacity is one and half rake per day and after capacity addition the handling will increase to four rakes per day. Two terminals are being developed outside the harbour in Haldia, one for liquid cargo while other will be bulk-cum-liquid terminal. A mechanised berth will be added at Kolkata Port and a bulk cargo handling berth will be added at Haldia. The vision is to expedite the discharge rate and evacuation at the port.
There is a lot of trade imbalance between India and Bangladesh. While exports from India are 6 billion, imports from Bangladesh are about
600 million. 60 – 70 per cent of this cargo moves through the land ports, so there is huge potential for seatrade to grow. About 5000 containers were exchanged with Bangladesh through Kolkata Port last year and in the first half of the current year about 4000 containers have already moved.
“All the cotton from India still goes by trucks to Bangladesh, while one of the largest private ports on the east coast of India is just at a distance of 2 hours drive from Guntur, the cotton capital of India,” revealed
Anil Yendluri, Director and CEO, Krishnapatnam Port Company
Ltd, India. This is because we have some connectivity issues between Krishnapatnam and Bangladesh. If these are resolved then traders from both the countries will benefit. The port plans to increase its bulk handling capacity to 300 million tonnes in a decade or two. This can be achieved by building 42 additional berths and dredging them up to 22 meters of draft. The port has excellent road connectivity with 5000 trucks moving in and out daily with zero waiting time. This capacity can be scaled to 50,000 trucks as the roads connecting the port are 20 lanes broader. The port can evacuate 60 trains a day.
The IT infrastructure is maintained such that the data moves between the stakeholders faster than the cargo. Krishnapatnam Port offers door-todoor service to ensure ease of doing business.
Anil also hinted at some of the synergies India and Bangladesh can develop to grow together. For instance, in South India all the states have banned river sand mining, while there is lot of sand in Bangladesh that can be exported to India. Similarly raw cotton can be exported to Bangladesh and finished garments can be imported back to India.
Tamal Roy, Chief Strategy Officer, JM Baxi Group, India briefed on the operations of his company. “JM Baxi Group has always looked east and this has led us to develop some terminals primarily in Haldia, Paradip and Vizag.” Haldia Container Terminal handles 200,000 teus annually and there are plans to increase capacity by adding quay cranes and other equipment. Vessels are already calling this terminal from Pangaon in Bangladesh. The Paradip multipurpose terminal has 16 meters draft and has just been commissioned. It handled half million tonnes of steel till date and will soon handle containers as well. It caters to the hinterland of Odisha. The Vizag terminal handles 400,000 teus per anum and is being expanded to handle a million teus per anum. Bangladesh traders can save 30 per cent of their cost by using ports on the east coast, while India can use ports in Bangladesh to connect north-eastern states. Ports on the east coast can also help in repositioning of empties.
Regulatory moves such as relaxation of Cabotage and coastal shipping agreement between India and Bangladesh offer tremendous potential for trade community in both countries to reduce their logistics cost and time.
“75 per cent of the cargo at the port of Colombo is transhipment, of which 75 per cent is destined for the ports in Bay of Bengal,” said
Romesh David, CEO, South Asia Gateway Terminals Pvt Ltd,
Sri Lanka. In this context Port of Colombo has posted a fifteen year CAGR of 9 per cent which reflects upon the growth in trade from South Asia to the rest of the world. South Asia being the fastest growing region in the world, the trade has immense potential. To match this growing trade the Port of Colombo has been expanding its capacity. Currently it has 7 million teus capacity, growing at around 12 per cent y-o-y. The hard infrastructure at the port has an additional expansion capacity of 9 million teus. This growth will be complementary to the growth of neighbouring ports in South Asia.
“Be it ports in India, Bangladesh or Sri Lanka, how do we increase the volumes of cargo? Are we doing business amongst ourselves?” questioned Md. Abul Kalam Azad, Principal Coordinator (SDG
Affairs), Prime Minister’s Office, Government of the People’s Republic of Bangladesh. If we increase the trade among our nations it will add to the performance of our ports and economies. As the first step Bangladesh will need to increase its exports to ASEAN. The country is expanding its logistics infrastructure including waterways as all the rivers are being dredged for moving cargo. Cargo from Chittagong can reach Assam and the seven sister states of India. Traders can choose any of the ports in Bangladesh based on time and cost efficiencies. In addition to infrastructure, the Customs and other government services in the country are being streamlined for ease of doing business.
(L to R) Tamal Roy, Chief Strategy Officer, JM Baxi Group; Fayyaz Khundker, MD, Ocean Network Express (Bangladesh) Ltd;Anil Yendluri, Director and CEO, Krishnapatnam Port Company Ltd; A K M Faruque Hassan, (N) afwc, psc, BN, Chairman, Mongla Port Authority; Md. Abul Kalam Azad, Principal Coordinator (SDG Affairs), Prime Minister’s Office, Government of the People’s Republic of Bangladesh; Romesh David, CEO, South Asia Gateway Terminals Pvt Ltd; Vinit Kumar, IRSEE, Chairman, Kolkata Port Trust
An engrossed audience during the session
Md. Abul Kalam Azad, Principal Coordinator (SDG Affairs), Prime Minister’s Office, Government of the People’s Republic of Bangladesh, making his point on trade and logistics infrastructure