Chittagong Port Authority (CPA) will receive 40-67% of revenue from the New Mooring Container Terminal (NCT) under a concession agreement with DP World that is set to be signed on Thursday, shipping ministry documents show.
The UAE-based global port operator will also invest about $150 million over the agreement period to modernise the terminal, upgrade equipment and strengthen technical capacity.
It will pay the government a $50 million upfront fee and an annual fee of $7,50,000.
The revenue-sharing arrangement will be calculated per twenty-foot equivalent unit (TEU) under a slab-based system, with CPA’s share rising as the terminal’s total revenue increases.
The agreement will also include a minimum-revenue guarantee for the government.
The agreement between CPA and DP World for the operation and maintenance of NCT is due to be signed on the afternoon of 8 October at the Invest Bangladesh auditorium in Dhaka, confirmed Shipping Secretary Md Zakaria.
The government has long maintained that an experienced international operator should be appointed to run NCT more efficiently, despite protests and opposition from various local groups.
The invitation for the signing ceremony describes the agreement as a public-private partnership (PPP) project aimed at developing Bangladesh’s logistics infrastructure through increased investment, greater operational efficiency and skills development.
Turnaround times targeted to halve
DP World aims to cut container dwell and vessel stay times by up to 50 per cent through improved terminal management, advanced operating systems, greater crane efficiency and modern operating practices.
The current average container dwell time at Chattogram Port is around 9.4 days, while vessels remain at the port for an average of 2.53 days.
The changes are expected to improve container-handling efficiency, reduce vessel waiting and turnaround times, lowering logistics costs for businesses.
NCT will have an annual handling target of 1.23 million TEUs.
The use of advanced terminal operating systems and automation is also expected to reduce uncertainty in shipping-line schedules and improve the overall reliability of port operations.
DP World will bear the cost of electricity and other utilities required to operate the terminal.
The agreement includes provisions to protect the rights of workers currently engaged in NCT operations.
According to the government, no new external workers will be recruited for the terminal. Existing registered workers will instead have the opportunity to continue working under DP World, an experienced international terminal operator based in the UAE.
The transfer of NCT operations to DP World will take place in phases after the agreement is signed.
The company will also implement internationally recognised standards and protocols covering health, safety, security and environmental protection. The government expects this to reduce accidents and improve worker safety and welfare.
DP World has experience operating terminals at more than 60 ports globally. The government says international best practices in terminal operation and maintenance will be applied at NCT based on that experience.
The draft agreement received in-principle approval on 1 October under the Shipping Ministry’s PPP project titled “Operation and Maintenance of CPS New Mooring Container Terminal, Including Overflow Container Yard.”
Negotiations with DP World reached an advanced stage during the previous interim administration but were suspended in February following labour unrest and objections raised by the negotiation committee.
The process regained momentum in June after the new government assumed office and the Shipping Ministry directed officials to resume negotiations with DP World.
NCT is the largest of the four main terminals at Chattogram Port.
In the last fiscal year, the terminal handled approximately 1.385 million container units, accounting for nearly 44 per cent of the port’s total container traffic.
NCT is currently under the management of Chittagong Dry Dock Limited (CDDL), which operates under the Bangladesh Navy.
The terminal was previously operated by local company Saif Powertec.
Although CDDL now oversees the terminal, workers and officials deployed there remain employees of Saif Powertec.
Among the other major terminals at Chattogram Port, the General Cargo Berth and Chittagong Container Terminal are operated by local companies, while the Patenga Container Terminal is operated by Saudi Arabia-based Red Sea Gateway Terminal International.
