THE Chittagong Port Authority on November 17 signed agreements, outsourcing the operations of the Laldia Container Terminal, in the upper estuary of the River Karnaphuli, to Denmark鈥檚 APM Terminals and of the Pangaon Inland Container Terminal, on the River Buriganga in Keraniganj, to the Switzerland-based logistics firm Medlog SA. The agreements, as the government says, are meant to bring world-class technology, efficiency and global best practices into the port system of Bangladesh. But a couple of issues involving the agreements with foreign operators to run the terminals have raised concern. It is in this context that 107 citizens, who included academics, activists, lawyers, writers and journalists, on November 20 issued a statement demanding that the government should cancel the agreements on the appointment of overseas operators for the container terminals. Under the agreements signed, the two foreign companies have been granted a 100 per cent tax exemption for 10 years. In addition, as it is reported, the royalty paid to the companies, technical know-how fees and dividends would receive tax exemption. An order issued in this connection says that foreign technicians working in the sector would also receive a 50 per cent tax exemption on their income for the first three years.
The terminals have been outsourced understandably to increase their efficiency as local entities lack the ability to do so. This might be entirely true. But why would the government not put in efforts to build the capacity needed and increase the efficiency warranted to streamline the terminals and make them modern? What the government should, rather, do first is to break the reported syndicates prowling the terminals that hold back their efficiency. It should, along with this, arm the local entities to build the capacity and increase the efficiency. The way the agreements have been signed suggests that Bangladesh may not benefit much from them because of the tax exemptions. The foreign operators would run the Laldia terminal for 30 years and the Pangaon terminal for 22 years. The arrangement for such a long period may entail issues of national security. But the government has had no consultation with stakeholders, port users and political parties on the agreements. Whilst the agreements appear to have been signed hurriedly, the process lacks transparency as the government is not disclosing the content of the agreements. The agreements, therefore, stumble over monetary benefits for Bangladesh, issues of its national security and an apparent secrecy about the process.
This is why the statement that the citizens have issued has called the agreements both 鈥榮urprising鈥� and 鈥榳orrying.鈥� The government has shown signs of failure in arming local entities to run the terminals. It should, in such a situation now, review the agreements for warranted benefits and in the best interest of the country.
