Geo-Economics of Chittagong Port

The Bengal, as an ancient thalassocracy, had ship trade with Africa, Europe, China and Southeast Asia. Her Chittagong (now, Chattogram) Port is situated in the firth of the Karnafuli River, which originates in the hills north-east of the Chittagong hill tracts and flows into the Bay of Bengal. Since the 4th century BCE, the Chittagong area of Bangladesh has been recorded as the prime seaport of the Bay of Bengal.

The Greco-Roman cartographer Claudius Ptolemy mentioned in his map that the harbour was one of the best in the Eastern world. From the beginning of the known history of Chittagong, the harbour is one of the prime locations for the sea traders. Since 9th-century Arab traders started harbouring in Chittagong, and that played a crucial role in spreading Islam in the Bay of Bengal region. Notable Chinese explorer Xuanzang visited Chittagong port in the 7th century and Ma Huan visited in the 13th century.

Niccolo, the famous explorer from Venice and the Moroccan explorer Ibn Battuta visited the port in the 14th century. During the 16th and 17th centuries Portuguese started to live in the Port city by establishing trading post although they left Chittagong after the Mughal’s conquest of Bengal. They named Chittagong as Islamabad and made a shipbuilding centre that supported Ottoman and Mughal navies. In 1790, the port became the property of the British East India Company after the British winning of Palassey Battle against the Nawabs of Bengal. Later, by 1888, the British Empire brought the port under the Port Commissioners Act. The port was maintained by the British authorities as the busiest regional trade links with Assam (modern Northeast India), Akyab and Rangoon in British Burma, Calcutta, Dhaka and Narayanganj.

In the early 20th century, the Bay of Bengal became one of the eventful harbours similar to the traffic of ports of Atlantic. The trade between British Burma and British India increased rapidly, later, in 1928 the Chittagong port was declared as a “Major Port” of British India since it was the key port close to Assam and Burma where British government was running petroleum industries. The port was also used by the British forces during the Second World War against the Imperial Japanese forces and Burmese fighters.

After the British Indian partition, Muhammad Ali Jinnah, the founder of Pakistan, paid special attention to the Chittagong port and started to explore its potential. Later in 1960, the Pakistan government formed the Chittagong Port. But during the secessionist liberation war in 1971, the Pakistan forces killed more than 100 Bengali employees of the Chittagong Port. The port was nearly destroyed by the heavy bombardments of Pakistani forces. After the independence, the Soviet navy helped Bangladesh to rebuild the Chittagong port.

During 1972-1974, the Soviet navy conducted mine-clearing and salvage operations in and around the harbour and that activity involved about 15 ships and boats. Afterwards, the port has become the heart of Bangladesh trade and commerce. The first jetty was constructed at the Double Mooring and was opened in 1899 and by 1999 the number of jetties had increased to 22.

According to media reports, now the number of containers handling capacity at the Chittagong port is growing by around 20 percent every year although the number of jetties is not increased in last 10 years. It is now handling more than 2.5 containers per year without the proper technology and development. Therefore, the port has been suffering from container vessel congestion. Importers and Exporters are sustaining huge loses. The major exports of the port of Chittagong, such as jute and jute products, hides and skins, tea, naphtha, molasses, frozen fish, shrimps, garments, and fertilizer are facing enormous trouble. At the same time, this vessel congestion has been making Bangladesh’s main imports, such as food grain, cement, petroleum, sugar, salt, fertilizer, general cargo, iron materials and chemicals costly.

On 24th April 2018, Chittagong Port Authority Chairman Zulfiqur Azis told to the reporters, “So this is obvious that we need new ports to handle the ever-increasing cargo and that is why the government has taken an initiative to construct Payra port and a commercial seaport at Matarbari in Maheshkhali.”

India is very interested to use Bangladeshi ports for her trade. In 2015, a MoU was signed between Bangladesh and India during the visit of Indian Prime Minister Narendra Modi, to allow India to use Chittagong and Mongla seaports. Especially, the North Eastern part of India urgently needs Chittagong port. Tripura’s Public Works Department (PWD) National Highway wing Chief Engineer Dipak Ranjan Das told reporters on June 10, 2016, “India has completed preliminary work including making detailed project report to build the bridge in Tripura to access Chittagong port to carry goods and heavy machinery for the northeast region.”

Nearly the same words were echoed from PWD minister Badal Choudhury’s speech when he said, “If Dhaka provides transit facilities to India and if we can use the Chittagong international port and other ports in Bangladesh, commodities and machinery can be transported to the northeast from various parts of India and abroad, saving huge time and money.” He added, “The transit between northeast India and rest of the country and abroad via Bangladesh is likely to become a reality in near future.”

Last year in October, Indian shippers announced $1.2 billion for Bangladeshi ports as the Indian line of credit. $450 million will be received by the Chittagong port’s Bay Terminal, rest will be distributed between Mongla port and the construction of Paira seaport. On the other hand, India’s geopolitical rival in the Indian Ocean region, China has a deep interest in the Bay of Bengal region for its maritime silk route project. China wants greater access to Indian Ocean ports ever since there is China’s “Malacca Dilemma” —through which China imports 80 % of its oil supplies. Already China started construction on a 771-km pipeline that will connect Ruili, in Yunnan, to Maday Island in Myanmar.

Mr Zhao Gancheng, director of South Asia Studies at the government-supported Shanghai Institute for International Studies once said, “Developing the port (Chittagong) is a very important part of China’s cooperation with Bangladesh, and China is aware of its strategic significance, so far, the hardware is far from sufficient. But Bangladesh wants to develop the port in a more extensive way, and wants more co-operation with Chinese companies.”

Mr. Zhao added, “While there is currently no oil pipeline running to Bangladesh, access to Chittagong will be of greater importance in the future when this infrastructure is put in place, with the development of China’s transportation of goods and energy in the Indian Ocean, China will certainly continue to attach more importance to this port.”

In February 2018, China disbursed about 141 million USD (20% of the whole project) to Bangladesh for the multi-lane road tunnel under the Karnaphuli river project which will be constructed by China Communications Construction Company. The tunnel will connect the proposed Asian Highway to the Dhaka-Chittagong-Cox’s Bazar Highway and the Chittagong Port and Anowara Upazila. Bangladesh’s landlocked neighbour Nepal also has shown interest to use the Chittagong port since Nepal only uses Haldia Port of West Bengal in India. Therefore, Nepal wants to use Chittagong port for storing her goods at the warehouses and export those to the Middle East, Europe and America.

But it is a widely conceived fact that the port is a classic model of the ‘tragedy of the commons’. Because the overall port interests are being suppressed and often neglected by the individual stakeholder (Chittagonians in particular) interests. Chittagong Port Authority (CPA), who is responsible for entire coordination and planning, lacks the legal authority and financial or managerial autonomy to launch radical reform programs. Still, there is the corrupt bureaucracy that is also a big struggle for reforms and changes. There are allegations that Port services are not competitive and there is no system of performance-based pay.

It is time for a revival of Bengal Thalassocracy, and the boxes of opportunities are scattered all over the Bay of Bengal. Bangladesh must open those boxes and explore those geoeconomic opportunities. The Chittagong port is one of the biggest boxes where the opportunities for robust trade and commerce are shining. To grab one of the box opening keys, Bangladesh should priorities radical reforms in Chittagong port with her most important trade partners.

To achieve that Chittagong port goal, several analysts have recommended that, firstly, the port needs an atmosphere where the interests of the ports will be prioritized, not the priorities of the individuals. Secondly, a war on corruption at the Chittagong port may change the current picture of bureaucracy imposed congestions and crisis. Thirdly, Port services must be provided on a competitive basis and introduction of the performance-based payment system. And finally, the government should adopt necessary measures including legislation to ensure that CPA can practice overall authority, financial and managerial autonomy of the Chittagong (Chattogram) port.

DISCLAIMER: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy and position of Regional Rapport.