PROJECT UNDER GOVERNMENT TO GOVERNMENT (G TO G)

Preliminary Development Project Proforma Propo!al (PDPP) for

Establishment of Deep Sea Port at Sonadia, Coxsbazar

E"ec#tin$ %$ency&

M'N'(TR) O* (+'PP'NG

1. 2. '. +.

Project title: Establishment of Deep Sea Port at Sonadia, Coxsbazar. i) Sponsorin !inistr"#Di$ision: !inistr" of Shippin ii) Exec%tin & enc": !inistr" of Shippin Expected date of commencement and completion: (%l" 2)1) to (%ne 2)1* ,ele$ance of the proposal -ith concerned sectoral allocation: .he !inistr" of Shippin is %nder the !edi%m .erm /%d et 0rame-or1 2!./0) of the 3o$ernment of the People4s ,ep%blic of /an ladesh. !./0 is in the form of rollin allocation -hich is c%rrentl" in place %p to the 0inancial 5ear 2)11612 and -ill be contin%ed for next three "ears and so on. &t present, there is an allocation of 78. s%b6sector %nder .ransport Sector %nder !./0 for the next '2three) financial "ears 2i.e. 2))961) to 2)11612) and this project -ill be incorporated %nder the !./0 allocation in near f%t%re. .h%s this project proposal is $er" m%ch rele$ant -ith the concerned sectoral allocation.

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!ain :bjecti$es and brief description of the Project -ith j%stification: Main o,jective!& 21) .o contrib%te to the ro-th of national econom" of /an ladesh b" streamlinin maritime international trade and accommodatin lar e $essels for enablin to enjo" the ;Economi" of Scale<. 22) .o %tilise the deep sea port as a ;,e ional =%b Port< so that the eo raphic position of /an ladesh co%ld offer real opport%nities to pla" a major role in re ional trade and act as a ate-a" for the re ion to the rest of the -orld.

-rief .e!cription of t/e Project 0it/ j#!tification&

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/an ladesh has maintained an a$era e ann%al ro-th rate of aro%nd ?.)) percent. .here has been a contin%o%s rob%st ro-th of both exports and imports. .his is a $er" positi$e trend for o%r econom" despite the -orld recession. 7n $ie- of the chan ed de$elopments the o$ernment has alread" %nderta1en a n%mber of meas%res to boost %p international trade. Establishment of a deep sea port is one of the important initati$e in this re ard.

7n /an ladesh, there are onl" t-o Sea ports pro$idin ser$ices for international sea borne trade. .he Chitta on Port located in the So%th6eastern part and the !on la Port located in the So%th6 -estern part of the co%ntr". .he installations of Chitta on Port are sit%ated alon the ban1 of the ri$er @arnaf%li, abo%t 1? 1m from its o%tfall into the /a" of /en al. .he maxim%m permissible draft ran es from A.*) m to 9.2) m -ith len th restriction of $essels bein 1AA m. .he !on la Port is located in the P%ss%r ,i$er abo%t 1') 1m inland from the ba" and its permissible draft ran es from B.)) m to A.*) m -ith len th restriction of $essel bein 22* m. .herefore, the both ports cannot accommodate lar e $essels to the berths, and li htera e is reC%ired for a s%bstantial portion of the import trade from anchora e in the ba".

.he total tonna e of sea borne trade of /an ladesh is ro-in

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on a$era e 1) D per ann%m. &lso the trend to-ards containerisation persists and container traffic is ro-in on a$era e 12 D per ann%m. .he present trend in -orld shippin is to ha$e bi er ships to deri$e economies of scale, b%t /an ladesh cannot zones 2EPEs) are operatin and more are realize the benefits d%e to limitations of its ports. &t present, ei ht export processin expected to come %p in the f%t%re. 7n addition, car o can also be expected from Fepal, /h%tan and possibl" China 25%nnan Pro$ince) and the landloc1ed northeastern states of 7ndia. .o ens%re proper ser$ices to the /an ladesh exports and imports and to ser$e the re ional mar1ets, port facilities for deep draft $essels are indeed necessar". 8ith a pop%lation of abo%t 1++ million, the econom" is mo$in rapidl" to-ards mar1et econom". .he 3o$ernment of /an ladesh 23:/) has emphasized di$ersif"in its econom" a-a" from a ric%lt%re and has made ind%strial de$elopment a priorit". !oreo$er, the transit iss%e is oin to be materialized as per 3o$t. decision. 7n these bac1drops the importance of an efficient port is %nC%estionable. 3:/ has also adopted the polic" of promotin the de$elopment of infrastr%ct%re projects, incl%din establishment of a port. 7n this re ard, 3o$t. of /an ladesh en a ed the Cons%ltin firm !#s. Pacific Cons%ltants 7nternational 2(apan) for Cond%ctin a .echno6Economic 0easibilit" St%d". &fter completion of the st%d" the Cons%ltants s%bmitted their final report d%rin (%ne 2))9. .he total thro% hp%t of Chitta on Port is presentl" o$er ') million tones, -hich is abo%t 9BD of /an ladesh sea6borne trade, ro-in

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on a$era e 9.2 D per ann%m. .his trend is anticipated to contin%e or accelerate in foreseeable f%t%re. .he projected Container and Car o $ol%me as per the Cons%ltant4s ,eport is sho-n in the tables belo-:
T%-1E 2 '

Tar$et Container Vol#me for Eac/ Port in -an$la.e!/.

21))) .EGs)
Port )ear T/e Deep (ea Port (D(P) 'nternational Dome!tic *ee.er Chitta on Port 7nternational Domestic 0eeder fm#to DSP !on la Port 7nternational Domestic 0eeder fm#to DSP Dha1a H :ther 78 Ports 7nternational Domestic 0eeder fm#to Exist. Ports Domestic 0eeder fm#to DSP
T%-1E 2 ''

3445 4 4 4 A2B A2B ) 2? 2? ) ) ) ) )

3467 4 4 4 1,A'' 1,A'' ) '' '' ) 2)) na na )

3434 3944: 69=7= 778 1,*)) 1,')) 2)) +B 2? 21 2''2) na na ''2

3487 :973; 79=75 394:8 2,))) 1,))) 1,))) A9 ) A9 29A+) na na 9A+

3477 6<97;< 689=:: 79636 2,))) 1,))) 1,))) 211 ) 211 2',91)) na na ',91)

Tar$et General Car$o Vol#me for Eac/ Port in -an$la.e!/ .

21))) ton)
Port )ear T/e Deep (ea Port (D(P) 'nternational Dome!tic *ee.er Chitta on Port 7nternational Domestic 0eeder fm#to DSP !on la Port 7nternational Domestic 0eeder fm#to DSP Dha1a H :ther 78 Ports 7nternational Domestic 0eeder fm#to Exist. Ports Domestic 0eeder fm#to DSP 3445 4 4 4 ?,9+9 ?,9+9 ) 1)B 1)B ) 1*,'B ) A+' 1+,*2 B ) 3467 4 4 4 B,1?9 B,1?9 ) '?1 '?1 ) 2)) na na ) 3434 893;4 398<= ;45 A,))) A,))) ) B)9 B)9 ) 29)?) na na 9)? 3487 65973< 669;:: =9776 A,))) A,))) ) 1,1'+ 1,1'+ ) 2+,**1) na na +,**1 3477 8;9775 3<955= 649<;3 A,))) A,))) ) 1,+2+ 1,+2+ ) 21),A92) na na 1),A92

.he container traffic thro% h the seaports of /an ladesh as forecasted b"

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the Cons%ltants 2.he Pacific Cons%ltants 7nternational, (apan) -ill increase %p to 2.BA million .EGs at the "ear 2)2), -hich is 2.2A times of container $ol%me handled at the t-o seaports of /an ladesh d%rin 2))?6)B and the eneral car oes, except clin1er and liC%id b%l1 car oes, -ill increase to 11.)9 million ton, -hich is 1.? times of those of 2))B6 )A. &s per cons%ltants $ie-, it is impossible to handle all these increased $ol%mes at the existin seaports. .he Shippin ind%stries so% ht to increase the scale of their ser$ice capacit" b" formin strate ic consorti%m, acC%irin other shippin lines, and thro-in man" lar e sized $essels in the mar1et. &t the same time, these major shippin companies ha$e been contin%in to order lar er sized $essels to compl" -ith ro-in c%stomer demand and see1in the economies of scale.

(pecific 'mportance of a Deep (ea Port& 7t is apparent that medi%m size mother ships c%rrentl" deplo"ed in the tr%n1 ro%tes are most li1el" to be cascaded do-n to the feeder ro%tes. & necessit" and rational to constr%ct a deep6sea port is that the port m%st be read" to accommodate s%ch redeplo"ed lar er and deep draft ships into the feeder ro%tes. Contin%o%s ro-in in ship size -ill affect the existin port in /an ladesh. Shippin lines, especiall" international ones, ma" deplo" lar er sized $essels once the deep sea port is de$eloped and the handlin $ol%me at there reaches aro%nd )2 million .EGs a "ear. .he shippin lines -hich are loosin mone" in Chitta on Port b" idlin the ship at anchora e almost half da" d%e to the tidal and other restrictions ma" choose deep sea port. &s per cons%ltants4
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estimation, it -o%ld cost approximatel" I *,)))#call for a 9)) .EGs Class ship or a shippin line -o%ld sa$e I 2,?),))) ann%all" for a simple -ee1l" caller b" shiftin their port from Chitta on to deep6 sea port. &nother economical benefit for a shippin line, -hich shifts the port of call from Chitta on to deep6sea port b" replacin a 9)) .EGs small feeder ship -ith a lar e size to '))) .EGs ship, is estimated abo%t '*D cost sa$in in terms of cost#.EG. &t deep6 sea port, there is no berth -aitin loss time and no draft restriction. .h%s, if the deep sea port has eno% h -ater depth, international shippin lines ma" deplo" $essels of '))) .EGs in f%t%re on feeder ser$ice ro%tes bet-een the deep sea port and Sin apore, .anj%n pelpas, Port @lan and Colombo Ports. Ens%rin -ater depth of 1+.) metres the proposed deep sea port co%ld recei$e most of the $essels %p to +,))) .EGs and a part of $essels %p to *,))) .EGs. 3i$en the estimated eneral car o 23C) $ol%mes, it is expected that the normal size of the 3C $essel -ill in f%t%re be 2),))) to '),))) D8.s to carr" traditional 3C incl%din lon steel prod%cts and lar e constr%ction materials -hich can not be pac1ed in containers. &t present the majorit" of 3C $essels are belo- 2),))) D8.s. /%t some exceptions exist for specialized traffic, for example finished cars, -hich are carried b" the p%re car carriers or semi container ships that carr" b%l1 combined -ith containers and are enerall" lar er in size. .he lar er $essels reachin *),))) D8.s ma" call the 3eneral Car o terminals. 7n consideration of the abo$e car o items and t"pes of $essels, the 3eneral Car o terminal of
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deep6sea port sho%ld be de$eloped as m%lti6p%rpose terminal for lar er $essel size of *),))) D8.s.
7n $ie- of abo$e and the 3o$ernment Strate " to-ards %p6 radation of port sector to meet %ser4s reC%irement as -ell as red%ce cost of doin b%siness, it is ine$itable to constr%ct a Deep Sea Port 2DSP) -ith reasonable -ater depth, -hich can accommodate *),))) D8.s container and con$entional car o $essels at an" tidal conditions, to cope -ith increasin car o demand and $essel size. 7n addition, to cope -ith increasin ship size, man" international port and terminal administration bodies tried to find the best -a" to %tilize the port facilities to the maxim%m. .he" ha$e been stri$in for efficienc" in all aspects of port operation b" rationalizin mana ement and operation s"stems. Efficienc" in terminal ser$ices has alread" been attained in man" ports thro% ho%t the -orld thro% h pri$atization and attractin -ell6established pri$ate terminal, as -ell as, ship operators. Pri$atisation of container terminals, either b" terminal operators or shippin lines, is therefore the modern trend of port operation in major ports in the -orld. .herefore, the 3o$ernment of /an ladesh has adopted a ne- Fational Shippin participation in ports. Polic" and %idelines for pri$ate

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Relevance of t/e project 0it/ t/e !/ort me.i#m lon$ term policie! plan! pro$ram!9 etc>)& 7n order to ens%re inte rated and -ell coordinated de$elopment and also to enco%ra e re ional and international trade the proposed deep sea port is $er" m%ch in line -ith the pro$isions of FS&P,677, !D3s. !oreo$er, establishment of a deep sea port is a commitment of the present o$ernment as mentioned in the election manifesto.

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B.

Relevance 0it/ ot/er .evelopment pro$ramme! of t/e concerne. !ector& .he o$ernment has adopted a lon 6term $ision for the de$elopment of the co%ntr". 0or the p%rpose, the plans and pro rams, -hich ha$e alread" been %nderta1en b" the o$ernment, -o%ld pro$ide oals for the f%t%re and chart o%t specific co%rse of action termed as J Vi!ion 2R#pa?alpa)@3436A. 7n p%rs%it of achie$in the $ision, the o$ernment has identified some priorit" areas that incl%de maintenance of macroeconomic stabilit" and control o$er commodit" price hi1e in the face of the present lobal economic crisis. .he present o$ernment has i$en a commitment to establish a deep sea port in the /a" of /en al to increase efficienc" of the container port and impro$e trade facilitation. 7n this respect, d%e considerations ha$e been paid to the Steps .o-ards Chan e: Fational Strate " for &ccelareted Po$ert" ,ed%ction 77, !illenni%m De$elopment 3oals 2!D3s) and the S&&,C De$elopment 3oals 2SD3s) and need for s%stained efforts achie$in these oals.

A.

E"pecte. !ocio@economic ,enefit! o#tp#t! of t/e propo!e. project& /an ladesh -o%ld reC%ire additional Port capacit" to handle the forecast amo%nt of container and non6containerised international car o. 7f car o thro% hp%t exceeds the existin ports4 capacit", the econom" is penalized thro% h hi her shippin rates and the imposition of a rate s%rchar e d%e to port con estion. /an ladesh international trade -o%ld be affected and competiti$eness of exports diminished si nificantl". >ocal prices of imported commodities -o%ld increase leadin to hi her inflation rates. .his is a$oidable if s%fficient port capacit" is pro$ided. Draft is a major constraint to f%rther expandin Chitta on 4s capacit".

8ith the DSP, the /an ladesh econom" -o%ld reap s%bstantial benefits

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in terms of the follo-in : Enhanced competiti$eness of /an ladesh exports as prices of imported and export commodities decrease as a res%lt of shorter shippin time and lo-er shippin costs. .his -o%ld res%lt in hi her emplo"ment. Exporters -o%ld inc%r lo-er financial costs for these shipments d%e to the shorter processin and shippin time for their car o. .his res%lts in hi her profitabilit" for exporters and more in$estments. 3eneral price le$els -o%ld decrease as import costs decrease. C%rrent inflation rates ma" slo- f%rther i$in the local pop%lation the abilit" to b%" more for the mone" the" ha$e. >o-er frei ht rates for container and eneral car o d%e to the %tilization of bi er container and eneral car o $essels. /ased on the anal"sis made, -itho%t transit car o, rate sa$in s -o%ld total abo%t GSI *9'.*B million and -ith transit car o GSI B91.+2 million o$er the ')6"ear project life c"cle. De$elopment of Sonadia#!ohesh1hali 7sland into a ne- ind%strial #economic zone.

Majority employed population of the project area are labour (20.3%), followed by salt production (1 %), small scale business (1!."%), and fishin# (1$.$%), a#riculture and (%.&%), retired'old unemployed (13.3%)

remainin# 12.3% ma(e others, which includes) tradin# ser*ice, forestry, ri(shaw'tempo dri*er and shrimp firmin# etc. +t is to be mentioned here that althou#h a lar#e number of areas are used for shrimp farmin#, but only a
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ne#li#ible number (0.%%) of people are en#a#ed in its operation. ,he shrimp culti*ation is mostly done by the outsiders and only some local people wor( there as labors or they lease them their land. .he port -ill create emplo"ment opport%nit" for local people in port related acti$ities. .he emplo"ment in port related acti$ities -ill be more rem%nerati$e and conseC%entl" the income of local people -ill increase. -bout $%% population of the total population is women. Most of the female members of the households are en#a#ed in household acti*ity. .omen are, remar(ably, in*ol*ed with income #eneratin# acti*ities at household le*el li(e poultry rearin#, catchin# fish fry. ,he household si/e in the project area is hi#her than the national a*era#e si/e. .1, which is ,he port cattle rearin#, *e#etable #ardenin#, etc. - lar#e number of #irl child are in*ol*ed in

de*elopment will pro*ide ser*ice facilities in respect of family plannin# and health ser*ices that will help in brin#in# the population #rowth down to national le*el. ,he poly#amy rate is hi#her than other areas. ,he port will #enerate employment opportunity for all men and women and conse0uently the #ender situation will impro*e.

9.

i) E!timate. amo#nt an. co!t of t/e propo!e. project ('n 1a?/ Ta?a)&

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1ocal& U( B 6455><;8 million (T?> :=5<3>76 million) *orei$n& U( B 6365><58 million (T?> <76<4>=6 million) Total& U( B 33<8>:75 million (T?> 67;<53>;3 million)C K%! per t/e e!timate! of t/e Con!#ltant!> (-rea? #p of co!t i! attac/e. at %ppen.i" @ ')>

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ii) Nat#re of forei$n a!!i!tance (loan $rant ot/er!)& 3rant#loan >i1el" so%rce of forei n assistance: 8orld /an1#&D/#(/7C#7D/ and#or an" other de$elopment partner2s). 7s there an" proposal to %nderta1e feasibilit" st%d" for the projectL 7f "es, -hat -o%ld be the estimated cost, nat%re and li1el" instit%tional arran ements for s%ch a st%d"L !inistr" of Shippin , 3o$t. of /an ladesh en a ed a Cons%ltin firm named !#s. Pacific Cons%ltants 7nternational 2(apan) in association -ith !#s. &sian En ineerin Cons%ltants Corp. >td. 2.hailand), Dextro%s a .echno6Economic 0easibilit" St%d". Cons%ltants >td., !#s. (PE Cons%ltin >td., !#s. De$ Cons%ltants >td. 2/an ladesh) for Cond%ctin &fter completion of the st%d" the Cons%ltants s%bmitted their final report d%rin (%ne 2))9. :n the basis of .echno6 Economic 0easibilit" ,eport the o$ernment formed a committee on 1? Fo$ember 2))9 to prepare the .o, of cons%ltin firm -hich -ill be en a ed to prepare the detailed desi n of deep sea port.

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%ny ot/er relevant information& /an ladesh is doin m%ch better in some sectors, b%t the proper balance

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bet-een sectors is reC%ired for achie$in positi$e oals./an ladesh has recentl" achie$ed s%ccess in a si nificant ro-th rate of 3DP. /%t, the problem also remains that the ro-th rate of 3DP is dominated b" a ric%lt%re -hile prod%ction is -ea1. .he ro-th of the man%fact%rin sector is not satisfactor". 7n $ie- of the %p-ard trend of national econom" the o$ernment has alread" %nderta1en a n%mber of meas%res to boost %p international trade. Establishment of a deep sea port is one of the important initiati$es in this re ard. .he deep sea port -ill boost %p the econom" of /an ladesh thro% h international trade as -ell as economic ro-th -hich -ill lead /an ladesh as a co%ntr" of middle income ro%ps.

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