The Bay of Bengal is geographically in a strategic location for constructing deep seaport. China was the first to propose to construct one at Sonadia of Cox's Bazar which wasn't materialized. Bangladesh went ahead with building its first deep seaport at Matarbari, also at Cox's Bazar. We evaluate the potential of the Matarbari Deep Seaport to drive growth and development.
According to the World Economic Forum, Bangladesh is one of the world’s fastest growing economies. The country will grow to a trillion-dollar economy by 2040 as estimated by the Boston Consulting Group (BCG). To keep the nation on track, exports and imports will be the cornerstone of the country’s economy. Thus, ensuring the increase of trade through the country’s sea ports will be instrumental in this venture.
Bangladesh currently has two major sea ports – Chattogram and Mongla. These two sea ports experience TWO key hurdles:
- First, increased congestion at these sea ports. Annually, these seaports deal with approximately 3.3 million TEU (Twenty-foot Equivalent Unit) containers, of which Chattogram port alone handled around 3.2 million TEU containers in FY 2021-22. At present, the annual container handling capacities of Chattogram and Mongla ports are 4 million and 0.2 million respectively. According to a report by Chattogram Port Authority, the annual container handling volume of Bangladesh is likely to reach 14 million TEUs by 2041. Therefore, these two seaports are not adequate to provide for the needs of millions of TEUs that are expected to reach our country in the upcoming years.
Second, high costs due to a lack of deep-seaport in Bangladesh. Feeder vessels are relatively smaller in size than the mother vessels. These huge mother vessels cannot enter into our sea ports due to the insufficient depth and breadth. A vessel larger than 190 meters in length and 9.5 meters in draft cannot anchor in the Chattogram port jetty. Because the current maximum draft of the port is just 9.2 meters. As a result, mother vessels or ships of higher tonnage are forced to offload their cargo at the transshipments hubs or deep-sea ports in Sri Lanka, Singapore and India, before feeder vessels could transport the consignments to Bangladesh. Hence, shipping goods to or from our existing ports increases trading costs as well as time. Also, the location is strategically important for geopolitics as well as geoeconomics. Thus, an absence of a deep-seaport did not bode well for Bangladesh’s maritime prosperity.
To solve these problems, the Government of Bangladesh (GoB), along with Japan International Cooperation Agency (JICA) and Chattogram Port Authority (CPA) is constructing the country’s first deep sea port at Matarbari, Cox’s Bazar. Even though the idea of a deep seaport in Bangladesh dates back to 1978 when the Netherlands Economic Institute suggested testing its feasibility – that didn’t go far.
Later on, China suggested a deep-seaport in Sonadia of Cox’s Bazar district with a proposal to finance the construction of it. China’s proposal had the same fate as the earlier one. The idea wasn’t materialized. No agreements were signed between Dhaka and Beijing. On the other hand, Japan came up with their Bay of Bengal Industrial Growth Belt or BIG B Initiative with a more integrated development approach, including a power plant.
The Matarbari coal power plant was proposed in 2011 and has been under construction with funding from the Japan International Cooperation Agency (JICA). JICA suggested building a deep sea port here when their feasibility test report found out that the sea depth in Matarbari is 15.5 meters which extends to 30 meters in a little further distance – the perfect depth for a deep sea port. After the completion of the project, mother vessels will be able to dock at the Matarbari port easily.
With the Matarbari Power Plant and the Moheshkhali Economic Zone nearby, the area has the potential to become an industrial hub, which is complemented by the construction of the Matarbari Deep Seaport.
The deep sea port project is being built at a cost of around BDT 177.77 billion (17,777.16 crore). JICA will provide around BDT 128.92 billion (12,892.76 crore), Government of Bangladesh will fund BDT around BDT 26.71 billion (2,671.15 crore), and Chattogram Port Authority will finance around BDT 22.13 billion (2,213.24 crore).
Reducing Pressure on the Sea Ports Mongla Port Chattogram Port Payra Port
The excess pressure that is likely to weaken the Chattogram and Mongla ports will be significantly reduced by the Matarbari deep sea port. On completion of the project, Matarbari Port’s container terminal will have an annual capacity of 0.6 million to 1.1 million TEUs in 2026, which will increase to 1.4 million to 4.2 million by 2041.
Yearly Cargo Handling of Chattogram Seaport
Yearly Cargo Handling of Mongla Sea Port
Yearly Cargo Handling of Payra Sea Port
Saving Costs Time
A deep seaport was suggested by the Netherlands Economic Institute in 1978 to eliminate the necessity of using lighter vessels for connectivity with mother vessels in larger ports in other countries. This reduction in time and costs will greatly benefit the export-oriented manufacturers of Bangladesh such as RMG, consumer electronics exporters as they will no longer have to pay unnecessary exorbitant freight costs in the supply chain.
Since the mother vessels will be able to directly dock at the Matarbari port, the cost of transportation of goods by sea will be reduced by about 15%. JICA estimates that the Matarbari terminal will save around $131 per 20-foot container and $200 per 40-foot container. Currently the RMG and other exporters have to transport products and raw materials using ports in Singapore, Malaysia and Colombo because of the inability of Bangladesh to anchor mother vessels increasing the cost and time. Recently, Owusu Maru, a ship with a 12.5 metre draught took berth at Matarbari, the largest ship to ever do so in Bangladesh.
Ease of Import
Each year, Bangladesh has to import energy, cement clinkers, steel products, scrap iron, fertilizers, cereals and other products. And the imports are expected to rise for many goods in the future. The Matarbari deep sea port will play a pivotal role in easing the process of imports into the country.
Separate terminals and jetties are being constructed for importing coal, LNG, and other goods. Through the Coal Transmission Terminal (CTT) yearly coal imports are supposed to increase by the following estimates
- 2026 - 9 Million Tons
- 2031 - 14 Million Tons
- 2041 - 41 Million Tons
To supply coal at the power plant, several jetties will be constructed at the Matarbari port to import coal. There will be a fuel jetty, a fuel transportation facility and two coal-handling jetties. The Floating Storage and Regasification Unit (FSRU) terminal of the port will have the capacity to receive at least 4,700 mmcf/D (million cubic feet per day) LNG. To import crude oil by large tankers, a Single Point Mooring (SPM) is being built in the outer anchoring area of the port. Oil, cement, food grains, iron products and scrap metals will also be imported by the Matarbari port reducing the burden on the Chattogram port.
Not to mention, the pain point of increased freight cost and time will now be ameliorated for the importers. Also, the enhanced ease of import and export will attract foreign investors more in Bangladesh.
Boosting Integrated Economic Development Plan
The deep-sea port is part of a larger plan of the current government for making an industrial hub. It’s not a standalone facility. Rather, part of an integrated approach for economic development.
Moheshkhali Economic Zone
The ongoing Moheshkhali Economic Zone is only 4 km from Matarbari sea port and has a total area of 3,500 acres which has already shown significant prospect for investment . Carrying containers between Moheshkhali Economic Zone and Matarbari for transportation should be very easy.
Matarbari Power Plant
On the other hand, Matarbari has two of the country’s coal based ultra super critical power plants with a total capacity of 1,200 MW. The plants are supposed to partially go in operation next year. Because the industries in the economic zone nearby will require robust power supply for operations, Matarbari power plant can prove to be a blessing given it operates in full potential.
Pipelines and LNG Terminal
Power plants will require coal, industries will require gas, oil etc. To reduce time of cost of oil and gas supplies, the country’s first under-sea oil pipeline has already been commissioned. While it took 12 days to transfer oil from tankers through lighter vessels previously, it takes only 3 days now.
On the other hand, Bangladesh has set-up two LNG terminals at Moheshkhali, with another terminal approved by the government in June 2023.
As it seems, Matarbari-Moheshkhali region is well-planned for connectivity, energy supply, transportation and all modern facilities for investment. Local and foreign companies will be attracted to set up their companies or factories in the zone due to the facilities. It would be easier to import production or manufacturing related raw materials in the zone due to the Matarbari port. Also, the products manufactured in the economic zone will be exported easily through the Matarbari port. Ultimately, a shipping and industrial hub will emerge surrounding the deep seaport and Moheshkhali Economic Zone which will create thousands of employment opportunities and accelerate the economic growth of the country.
Geoeconomics
Neighboring nations such as India, China, Nepal, Bhutan, Myanmar and Indonesia will be able to easily transport their goods using the Matarbari port. This will generate huge revenue for the country from transit if other countries use the deep-sea port. Also, due to Matarbari port’s unique location, the port could play a pivotal role in the geopolitics of the region.
The Goal to Materialize Yet
The entire masterplan around the Bay of Bengal is requiring a huge investment currently. Even the Matarbari Deep Seaport is being developed with partial Japanese debt from JICA. In order for the debt to be useful and not a burden, Matarbari has to attract foreign investment. On that part, Bangaldesh has to ensure ease of doing business, reduced administrative and bureaucratic red tapes and availability of necessary soft infrastructure. So far the incoming investments are promising. The path forward has to be carefully walked, with vigour and courage to build a prosperous future.
About the Author
Shah Adaan Uzzaman is the Blog Administrator at The Confluence. A former Bangladesh Television Debate Champion and winner of several policy & debate competitions, he is currently a student of IBA, University of Dhaka.
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[…] seaports are not adequate to satisfy the growing container handling demand of the country. The Chattogram Port Authority estimates that the container volume in Bangladesh is likely to stand at 14 million TEUs each year […]