Deep seaport dillema in Bangladesh

Deep seaport dillema in Bangladesh

For a nation whose economy is considered to be on a rapid rise in the world, known as the second most

powerful textile industry, listed in Goldman Sach’s ‘Next 11’ and expected to advance at 7.1% this year,

Bangladesh still lacks a deep sea port.

A new port has not been built in the 45-year- old country which sees $60 billion worth of yearly trade

throughout Chittagong and Mongla, the two existing seaports that happen to be too shallow for

substantial containers. This results in the pricey transfer of goods to smaller ships to move the freight

which hikes up the daily cost by an added $15,000, reports The Diplomat.

Resolving this issue has not exactly been an easy task for Bangladesh, but not due to a lack of choices,

international backing or a shortage of investors. The problem is the exact opposite. Numerous plans are

being pushed by powerful contenders which have left Bangladesh in a frozen state, unsure about which

direction to take. Many deals have been made and broken in the process. Due to these complications,

China, Japan and India are competing to construct the first deep seaport in Bangladesh.

Bangladesh may be a small country, it is strategically located being surrounded by India and right on the

Indian Ocean. The Indian Ocean region consists of 25% of the world’s land, a third of global population

and 40% of oil and gas reserves. It also serves as the host of one of the most crowded and significant

shipping lanes where East Asia is supplied with its major supply of crude oil from the Middle East.

Dhaka, the capital city of Bangladesh is viewed as pliable economically and politically and has caught the

interest of both the east and west. Being a core part of the region, Bangladesh is balancing the

competing influences of India, China, the United States, and Japan.

Bangladesh plays a major role in China’s plan for reinforcing their trade routes, the Belt and Road

initiative. A network of ports has been established by China, called the 21st Century Maritime Silk Road

that extends from Chinese coasts through Southeast Asia, the Indian Ocean, the east cost of Africa and

through the Mediterranean to Greece.

Intended as commercial, this project has provoked apprehension in other parts of South Asia, who view

it as potentially having militaristic ramifications — or at least leveraging this reasoning to push their own

competing agendas. This consternation was brought up by Booz Allen Hamilton, a consulting firm in a

2005 internal report prepared for the US Department of Defense. The idea was referred to as the “String

of Pearls”, a label that has since been used to critisise China’s ambitions on South Asian waters.

The competition has risen to an apex when it comes to the location and the financier of Bangladesh’s

first deep sea port, with some powers making great financial and political steps to work in their


Currently, there are four likely sites for the new port:


Located on the northeast curve of the Bay of Bengal, Chittagong has always been the largest and most

important seaport in Bangladesh. Once a major hub on the ancient Maritime Silk Road, Chittagong has a

rich history. Its position is just as relevant today. “We handle 98% of the country’s container cargo, 92%

of the total cargo volume,” a port development administrator explained. “So you can imagine how

important this port is to Bangladesh. If Chittagong port collapsed the whole economy will collapse.”

The dilemma is that the current maximum draft of the port is just 9.2 metres which is not deep enough

for many container ships.

A proposal to remedy this problem is the construction of a new port on a 1,200 acre island in the Bay of

Bengal off the coast of Patenga. “The Bay Terminal” would technically not be a deep sea port – as its

maximum draft would be up to 13 or 14 metres, rather than the 15 needed to be granted the title, but

larger vessels would be able to get into the port directly.

“It will be a great achievement if China agrees to use our Chittagong port, which we want to develop

into a regional commercial hub by building a deep seaport in the Bay of Bengal,” Bangladesh’s Foreign

Minister Dipu Moni told Reuters.

This plan would fare well with China’s broader ambitions of building an overland corridor from Yunnan

province to a port on the Bay of Bengal. The plan would essentially provide China with a link to the sea

that, aside from transiting Myanmar, could bypass Southeast Asia.

After international commentators branded the Chittagong deep seaport proposal as one of China’s

“pearls”, Bangladesh was put in a risky geopolitical position. This led to Indian ships being granted

permission to use the Chittagong port.


Acknowledging that Chittagong may fall through, China had a plan for another deep sea port. Sonadia,

an island near Cox’s Bazar was deemed as a suitable location following a Japanese survey in 2009, which

China is eager to finance.

China Harbour Engineering Company, a subsidiary of the state-owned China Communications

Construction Company – which happens to be blacklisted by the World Bank on allegations of corruption

– was chosen as the developer. It was assumed that Bangladesh had given China the green light after

Prime Minister Sheikh Hasina’s visit in 2014, but it was not.

Since China was already constructing ports in Sri Lanka, Pakistan, the Maldives, and Myanmar,

Bangladesh was the last remaining link that would leave India completely surrounded.

“India’s not very happy that China and Pakistan are holding a strategic and economic relationship, and

part of their objection is the One Belt, One Road and the Pakistan-China economic corridor,” said Shahid

Islam, a research fellow at the BRAC Institute of Governance and Development.

In 2016 a formal announcement was made that the plan had been dismissed.


Bangladesh consented to a contract for Japan to build a deep seaport in Matarbari, just 25km away from

Sonadia. This is a potential cause for the dismissal of Sonadia port.

Japan International Cooperation Agency is to construct the port, as well as a liquefied natural gas

terminal, a series of four 600 MW coal-fed power plants, in addition to rail lines, roadways and electrical

systems as part of a monumental deal. The master plan is that the port would be used to receive coal,

which could power an entire new industrial zone in the far southeast of the country.


Not to be mistaken for a condolence prize for China, who was beaten by Japan for a port in the south,

the construction of a deep seaport was proposed at Payra, located on the northwestern coast of the Bay

of Bengal.

Financed on a public-private partnership platform, the building of this port was originally granted to a

Chinese company until India, Japan and the United States raised their heads. India stated that they

wanted to be one of the key investors.

The Payra deep sea port was then reconfigured as a cooperative port that many different countries

could invest and operate terminals in.

Reports say that 10 countries have considered taken the plunge investing upto $15.5 billion.

“Bangladesh politics are driven by India, and the US to some extent,” Shahid Islam explained.

“Bangladesh can’t move ahead with China in terms of big collaborations, in terms of making the Silk

Route or One Belt, One Road or an economic corridor.” dillema-in- bangladesh/

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