RLL Container Report - 18 January 2017
From: John Keir, Ross Learmont Ltd. Email: john.keir@telia.com Date: 18 January 2017
Booming box business in the Bay of Bengal
With a population of 170 million, Bangladesh has grown into the eighth most populous country in the world. In spite of the spectacular rise in the number of inhabitants, Bangladesh has not built a new port since the country gained independence from Pakistan 45 years ago. In an urgent effort to catch up with the rapid changes in shipping, the Bangladesh government has contracted two Chinese companies, CHEC and CSCEC to develop a USD 600 million deep-sea port at Payra on the Bay of Bengal.
The port of Payra will replace Chittagong as the country’s main trading port. At present, some USD 60 Billion of annual trade passes through the ports of Chittagong and Mongla, both of which have a shallow draught. This results in costly transfers to smaller vessels of 1,100 teu and it is estimated that these extra handlings cost Bangladesh an additional USD 15,000 per day.
As Dakha is the capital, home also to some ten percent of the entire population, and at the same time a major manufacturing centre, the government decided that the city should be connected by a fast rail link to the new container terminal, which will be capable of handling 8,000 teu vessels. In order to keep this seven-fold increase in box traffic off the over-burdened road network, the Government and Bangladesh Railway signed a Memorandum of Understanding with the British company, DP Rail to construct a new 240 km railway between Dhaka and Payra.
The agreement gives DP Rail the exclusive right to design, finance, build and operate a new railway between the capital and the container terminal. For its part, the London-based company expects to have rail freight services up and running by 2024. In its first year, it is estimated that the line will transport two million teu, rising to circa four million teu by 2030. Many new jobs have been created by the country's dynamic, ready-made garment industry, which grew at double-digit rates through most of the 1990s.
By the late 1990s, about 1.5 million people, mostly women, were employed in the garments sector as well as leather products, especially footwear. During 2001-2002, export earnings from ready-made garments represented 52% of Bangladesh's total exports. By 2009, Bangladesh had overtaken its neighbour in apparel exports, when its exports stood at USD 2.66 Billion, way ahead of India's 2.27 Billion US Dollars. In 2014, the monthly value of exports had risen to USD 3.12 Billion, which in turn prompted the government to adopt a radical approach to improving the country’s intermodal infrastructure.
John Keir, Ross Learmont Ltd.
18 January 2017
Copyright ©, 2017, John Keir