The new sea port at Payra could immensely contribute to the economy of Bangladesh, which aspires to achieve a middle-income status by 2021 and become a developed country by 2041. Building of the Payra port is essential for Bangladesh to meet the growing requirement of its international trade that is conducted mainly through sea route. The country’s two other commercial ports, Chittagong and Mongla are too shallow to handle large container ships. Sheikh Hasina-led Awami League (AL) government wants to develop the Payra port in a manner that it could handle vessels as deep as 10 metres.
The Payra port has generated huge interest among several countries both regional and beyond after the AL government sought foreign assistance for developing Bangladesh’s third sea port. Shipping Minister Shahjahan Khan told parliament on June 21, 2016 that the Payra sea port would be built on a government-to-government (G-to-G) and foreign direct investment (FDI) basis. Reports suggest that at least ten countries had already submitted their investment proposals. In addition to India and China, some European and Gulf countries seek to invest in the Payra port project. The Bangladesh government will have to invest only $ 400 million in the project if the proposals are accepted.
India and China, both having cordial ties with Bangladesh, are competing with each other to build the South Asian nation’s first deep sea port to gain much needed access to the Bay of Bengal. India is looking for an alternative sea route for its isolated North Eastern states that are heavily dependent on the narrow Siliguri Corridor to transport goods. Payra port, which is located in the south-western corner of Bangladesh, is much closer to India’s border and could easily be used by the North Eastern states.
The state-owned overseas port builder India Ports Global is reportedly keen to design, fund and build Bangladesh’s newest deep sea port on its own. The shipping ministries of the two countries have been engaged in negotiations on the Payra port project for the last one year and a positive outcome is expected soon. As part of its “Neighbourhood First” policy, Narendra Modi’s National Democratic Alliance (NDA) government has broadened India’s participation in the development of strategic infrastructure in South Asia, including Bangladesh.
The ports sitting on the Bay of Bengal are also strategically important for China, especially its landlocked south-western region. In January 2016, China National Petroleum Corporation started pumping oil from a new deep water port in Myanmar, while China Harbour Engineering Company Limited (CHECL) is currently involved in the up gradation of Chittagong port. China has been making concerted efforts to win the contract of the Payra port project particularly after the cancellation of the Sonadia deep sea port project by the AL government.
Beijing’s Ambassador in Dhaka Ma Mingqiang reportedly said in March 2016 that China was ready to invest in the Payra port project in collaboration with any country. In a significant development on December 8, 2016, Bangladesh signed two memoranda of understanding worth $600 million with two Chinese enterprises for building two of the nineteen components of the Payra Sea Port Project. Reports say CHECL has agreed to build the core port infrastructure, while China State Construction Engineering Corporation is to execute riparian liabilities and set up housing, healthcare and educational facilities in the Payra port.
The idea to develop Bangladesh’s third sea port at Payra in Patuakhali district was first conceived in 2013. Bangladesh’s parliament soon passed the Payra Sea Port Authority Act on November 3, 2013 and two weeks later Prime Minister Hasina formally opened work on the port on November 19. The pace of the construction work accelerated after 2014 when the AL government formed the Payra Port Authority (PPA) under the Chittagong administrative authority. In November 2015, the Executive Committee of the National Economic Council (NEC) reportedly approved a Tk 1,128 crore for building primary infrastructures and facilities to make the Payra port operational.
Shipping Minister Shahjahan Khan has said the AL government has undertaken steps to implement the Payra port project in three phases and its construction will be completed by 2023 in the third phase. Payra port had begun to function on a limited scale on August 13, 2016 when it was inaugurated by Prime Minister Hasina. Reports suggest that the port will handle loading and unloading of food grains, fertilizer and cement at the initial stage.
The feasibility study on Payra port conducted by the British firm HR Wallingford estimated the total cost of construction at $20 billion, of which one-fifth would be required for dredging only. Planning Minister AHM Mustafa Kamal said that about 94 lakh cubic metres of dredging would be undertaken to clear siltation along the coastline. The Bangladesh government seeks to implement all the nineteen components of the port project in phases and build a world class port at Payra. According to reports, the deep sea port at Payra could handle large container ships of 8,000 containers capacity or 120,000 tonnes of cargo once it is fully operational.
The Bangladesh government believes that the enhanced capability of Payra port will bring down the cargo handling cost to one-third. The PPA said that most of the maritime channels leading from sea to port have a depth of 7 to 15 metres. It has been pointed that, unlike Chittagong and Mongla ports, Payra’s navigability will not be “tide-dependent”. Due to greater depth, it will be navigable “round the clock”.
The AL government is also focusing on building transport networks between Payra port and other key regions of the country. Planning Minister Mustafa Kamal made it known that a 6 km four-lane road would be constructed to connect the Payra port with the Barisal-Kuakata highway. The Payra port would also be connected with important business centres in the country, including Dhaka and Narayanganj by rail, waterways and road better than the Chittagong port.
The United Kingdom’s DP Rail has agreed to invest $ 7.5 billion in the 127 km-long Dhaka-Payra port rail link project, a crucial infrastructure as part of the AL government’s ambitious economic development plan. The project includes setting up of an inland Container Depot and a landing port at Payra. On December 21, 2016, DP Rail inked a memorandum of understanding (MoU) with Bangladesh for building the proposed rail link and other infrastructure.
The government has planned to develop mega infrastructure around Payra port as well. Reports say the government has initiated the process of acquiring land for the port, five power plants, a land-based liquefied natural gas (LNG) terminal and an oil refinery. The Bangladesh-China Power Company Limited has already started building a 1,320 MW power plant near the port, while several Bangladeshi enterprises, including Rural Power Company Limited, Ashuganj Power Company Limited, Bangladesh Petroleum Corporation (BPC), PetroBangla and Sena Kalyan Sangstha are making efforts to obtain land for building power plants, oil refinery and LNG terminal.
Media reports suggest that the AL government has approved three 1,320 MW power plants of the proposed five plants. Besides, several private companies are trying to set up garment factories and other industries in the area. The Bangladesh government also intends to build an Exclusive Economic Zone (EEZ) and develop a tourism circle centring the beach town Kuakata and an air port, to add new impetus to the development of the country’s southern region.
The Payra port could play an instrumental role in Bangladesh’s economy after it becomes fully operational. It is likely to generate enormous employment opportunities, increase export and import and boost the country’s capacity in handling ocean-going cargoes. Shipping Minister Shahjahan Khan recently noted that the PPA had earned Tk 17 crore as revenue in just four months (August to December 2016). The inhabitants of Patuakhali distinct are upbeat over the bright financial prospects of the Payra port. They believe that setting up of the port, power plants, EEZ, and various other industries would create large employment opportunities for them.
In order to achieve faster economic growth, Bangladesh must develop facilities at its sea ports through which over 80% of the country’s foreign trade is carried out. Bangladesh’s increasing international trade now stands at $ 60 million annually. This South Asian nation is expected to grow more than 7% in the fiscal year (FY) 2016-17. The country has been listed in Goldman Sach’s “Next 11” emerging economic power houses of the 21st Century.
Furthermore, efforts are on to strengthen Bangladesh’s maritime and disaster-management capability. The PPA said a “self-sufficient and modern” naval base would be set up at Payra port capable of hosting naval commandos, aviation, ships and submarines. Security experts maintain that the naval base’s central location would make it ideal for naval aviation, which is needed for proper maritime surveillance. Moreover, it will be easier to provide logistical support from here to the ships plying the seas. Besides, the base would ensure maritime security to the country’s southern cost, including the Sunderbans. It would also be the focal point of disaster preparedness.
Payra port will not only accelerate the pace of economic development in Bangladesh but also strengthen the country’s commercial, economic and political ties with other countries in the region. Bangladesh could earn substantial foreign exchange by offering port facilities to India’s North Eastern states, China, Nepal and Bhutan. Bangladesh’s foreign policy analysts are of the opinion that Payra port has the potential of becoming a regional hub for trade, transit and connectivity adding the country’s leverage in terms of economic diplomacy. It is expected that the Bangladesh government pursues the Payra port project expeditiously considering the country’s long-term interests.