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INDO-BANGLA TRANSSHIPMENT
Charge fixed at Tk 192 per MT
Decision at shipping secretary-level meeting in Delhi
Kumkum Chadha, New Delhi
Fakhrul Islam of Bangladesh shakes hand with Amitabh Kumar in presence of Union Shipping Minister Nitin Gadakari and Shipping Secretary of Bangladesh Shafique Alam Mehdi after signing a standard operating procedure (SOP) for operationalisation of coastal shipping between India and Bangladesh, in New Delhi, on Sunday PTI
A major breakthrough was achieved between India and Bangladesh yesterday with the Indian side giving the go ahead to Bangladesh’s charges for transshipment facilities at Ashuganj port or Akhaura Land Custom Station (LCS) amounting to Tk 192.22 per metric tonne. In the break-up of the charges, according to sources, the basic should be read Tk 130 per tonne as custom related charges, Tk 52.22 as road charges and Tk 10 as Bangladesh inland water transportation supervision charges. Additionally, a custom escort charge of Tk 50 from Ashugnj river port to LCS Akhauara /Agartala shall be levied. This, however, sources clarified will only be levied in the event of an escort being demanded: “These charges are therefore optional and should be treated as such” the official from Bangladeshi side was at pains to clarify.
India, according to sources, has given the go-ahead on a purely experimental basis with a provision for a review. The decision was taken at a shipping secretary-level meeting in Delhi after a day of brainstorming between the two sides. India’s decision stems from the fact that the cargos should move sooner than later: “The charges should be such that they ensure a viable operation rather than making the operation unviable,” said a highly placed source from the Indian side. It is therefore feasible that a “green rather than red” signal be given in keeping with the spirit of what was dubbed as an “overall rather than a sectoral view”.
This means a macro push to cargo movement and positive trade practices rather than create road blocks on nitty-gritty, confirmed another highly placed source. The Indian side on its part proposed to keep options for a review open following consultations with their ministries of Railways, Road Transport and Highways and after assessing the impact of these charges on what it termed as the “competitiveness” of inland water transportation on this route.
The Indian nod was, perhaps a consequence of Bangladesh’s inability to renegotiate the charges given that they had been approved at the level of the Prime Minister’s Office in Bangladesh: “Any change would have meant going back to the top decision makers in Bangladesh for revision” a member of the high level visiting delegation told The Independent.
The report that was submitted to the Indian side at the very outset stated that “after detailed deliberation with the concerned ministries in Bangladesh, highly competitive charges for the transshipment operations at Ashuganj for movement of goods to and from north eastern part of India has been finalised at 192.22 taka per metric tonne”.
A visibly elated Bangladeshi delegation called it a “win-win situation” for both the countries, dubbing it as “yet another milestone in Indo-Bangladesh relationship”.
Reiterating sentiments expressed earlier, Bangladesh Secretary of Shipping Shafique Alam Mehdi said that the ‘positivity’ on both sides was a “heart above head situation” and one of “inclusion above ego”. Heaping immense praise on his Indian counterpart, Rajiv Kumar, Mehdi said he displayed “immense spirit of accommodation” for Bangledesh. Stating India being “exceptionally considerate” about Bangladesh’s requirements, Mehdi said that there may have been differences of opinion but “there were no differences between minds”.
The interactions and deliberations, Mehdi told The Independent, should be read as “meeting of minds”. His major takeaway, he told this correspondent was that seeing this exchange in a different perspective: “I do not see these agreements as a step towards pushing trade and cargo or connectivity. To me and Bangladesh, these are steps towards connecting minds”.
Another important aspect of the proposal was Bangladesh’s decision to do away with the practice of insisting for a bank guarantee on transit cargo. While Bangladesh described this as a “goodwill gesture”, the Indian side said it was a welcome step given its potential to reduce the transportation cost on the one hand and encourage cargo movement on the other. On the MoU of passenger and cruise vessel movement, following a few amendments suggested by Bangladesh, there was a broad agreement on all clauses.
India also suggested to Bangladesh to approach the World Bank for funds on protocol dredging of routes. Given that India is a developing economy it does not qualify to make such a proposal to the World Bank. A definite view on whether Bangladesh will approach the World Bank is yet to be taken.
India and Bangladesh had a day earlier, signed the standard operating procedure (SOP) to launch the ‘Agreement on Coastal Shipping’. The pact, signed between the two countries in June this year, will bring down the export-import cargo costs between the two countries. The SOP was signed by the Joint Director General (Shipping) Ministry of Shipping, Government of India, and the Chief Engineer and Ship Surveyor, Department of Shipping, Government of Bangladesh.
Nitin Gadkari, Union Minister of Shipping and Road Transport and Highways, was present when the two countries inked the SOP. The provisions of the SOP stipulates at par treatment to the vessels of both countries, according to an official release.
The two sides have also agreed upon the use of vessels of River Sea Vessel (RSV) category for Indo-Bangladesh coastal shipping.
The secretary-level talks veered around the memorandum of understanding on passenger and cruise vessel movement, discussion on the protocol to operationalise the MoU on use of Mongla and Chittagong ports, payment of transit fees and bank guarantee, dredging of rivers in the protocol route using Regional IDA Assistance of World Bank Assistance and various upcoming port projects in Bangladesh.
India, it may be recalled, is using for the first time, the Indo-Bangladesh river protocol to transport food grains via Ashuganj to Tripura.
That the quantum of cargo is yet to pick up is another matter. The low pick-up is attributed to two factors: low draft in the upper reaches of Bangladesh rivers and certain non-trade barriers. Bilateral trade between the two countries has taken strides resulting in road congestion on the Indo-Bangladesh border and at the Land Custom Stations/integrated Check Posts. This has also led to increase in transportation costs for the exporters/importers on both sides. As things stand, India and Bangladesh sea route connectivity is through ports of Colombo and Singapore. The long sea route adds to the transportation costs of EXIM trade. Given that there is limited cargo movement between sea ports of Bangladesh and India, it is neither feasible nor profitable for big vessels to ply between these ports. Hence the dependence on smaller ships for direct connectivity of eastern sea ports of India with Chittagong and other ports in Bangladesh. This would also help providing competitive freight rates.
Distinct advantages that stem of the agreement include the movement of cargo to the North East through coastal shipping up to Chittagong and thereafter by road/inland waterways; The deep draft ports on the eastern coast of India becoming ‘hub ports’ for the onward transportation of cargo to Bangladesh via the coastal mode through RSV category of vessels; Indian ports being able to attract enhanced cargo, in addition to reducing the overall transportation cost to Bangladesh.
Charge fixed at Tk 192 per MT | Independent
For the news. More cooperation and agreements the better! Any updates on Teesta joint-commision?
