No fees finalized as ports readied for Indian cargo transshipment

Bangladesh’s two seaports are all set for a trial run of Indian cargo ships’ movement, tentatively later this month, under a transshipment arrangement. But the two countries are yet to finalize the transit fees to be charged.

Under the arrangement, the Indian cargo ships will carry goods to and from the northeastern parts of India to its other regions through Bangladesh by using the Chittagong and Mongla ports.   

Sources in the shipping ministry said an Indian cargo ship was likely to arrive at Chittagong Port from Kolkata on January 25 as a tentative schedule for goods’ transit is being prepared by the Chittagong Port Authority (CPA).

At a recent meeting at Chittagong Port Bhavan, the CPA Chairman, Rear Admiral Zulfiqar Aziz, said: “We are all set to start working with the Indian ships under a transshipment agreement and a ship is scheduled to arrive this month on a trial basis.”

Such an arrangement, once rolled out, will help India ship goods to and from its northeastern region by waterway and then via roadways through a use of ports and highways in Bangladesh. For its part, Bangladesh is expected to benefit from fees charged on such movements of cargo.

Bangladesh and India have, however, not yet finalized the fees to be charged. 

A paper,‘Major Achievements for the Month of December, 2019,’ recently uploaded on the site of India’s shipping ministry, notes: “On the quantum of administrative fees to be charged by Bangladesh for movement of India’s transit cargo for NER (North East Region) through Chattogram and Mongla Ports, Bangladesh agreed to review its proposal as the proposed high charges would be unfruitful for the industry to adopt the shorter route.”

In Bangladesh, no official could confirm specifically when the two countries planned to settle the fees issue.

Earlier, in the first week of December last year, the secretaries of the ministries of shipping of Bangladesh and India held a meeting in Dhaka, where it was decided to begin the trial run in January this year.

According to the plan, “mock goods” from Kolkata would be transported to Chittagong port during the trial run via sea route. Another cargo ship will leave for Mongla. Then the goods will be carried to the Indian states of Tripura and Assam by road via Akhaura and Tamabil and other ports in Bangladesh.

Later, a second trial run will be organized after making necessary changes, if any required, from the lessons to be learnt from the result of the first trial.

Fees yet to be finalized

Under the terms of the General Agreement on Tariff and Trade (GATT), no customs duties will be applicable in transit as India is a signatory to GATT.

However, the Bangladesh government can impose fees and charges for using its ports and roads.

Sources said the shipping ministry proposed Tk192 per ton of goods for using its ports and Tk34 per ton for ship landing charge in line with the tariff schedule of Bangladesh. Besides, Bangladesh also proposed a service charge for using its ports.

On the other hand,the  road transport and bridges ministry has proposed Tk2.10 per ton of goods for use of each kilometre of road inside Bangladesh.

“We have already placed our proposal to the Indian side but the fees are yet to be finalized,” said Chandan Kumar Dey, additional secretary of  the ministry. 

Prime Minister Sheikh Hasina announced a transit deal between Bangladesh and India in 2010 during her visit to Delhi. Both countries signed a memorandum of understanding (MoU) in 2015 over India’s use of Chittagong and Mongla ports.

Bangladesh and India signed an agreement on October 25, 2018 on providing facilities to India for the use of Chittagong and Mongla ports.

The routes suggested for this transshipment include, among others: from Chittagong Port or Mongla Port to Agartala via Akhaura; from Chittagong or Mongla port to Dawki via Tamabil; from Chittagong or Mongla port to Sutarkandi via Sheola; and from Chittagong or Mongla to Bibekbazar via Simantapur.