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Dhaka, Sept 29 (bdnews24.com) While Bangladesh should have been earning revenue by providing transshipment facility for Indian cargoes from Kolkata to Tripura through Ashuganj-Akhaura, it has instead chosen to offer them subsidy on the service.
The first commercial transshipment cargo from Kolkata to Tripura through Ashuganj rolled on Wednesday without paying any transit or transshipment fee to the government.
"The government is not recovering even the economic cost for providing the service, let alone collecting the transit and transshipment fee from Indian cargoes," private think-tank Centre for Policy Dialogue's distinguished fellow Debapriya Bhattacharya told bdnews24.com on Thursday.
Inland vessels in Bangladesh enjoy certain subsidy on fuel or in the form of no-charge on pollution or reduced berth or river charge, "but why on earth we're providing the same subsidy for transporting cargoes from one part of India to another?" he wondered.
GOVT CONTRADICTS SELF
The government by allowing free transshipment is working against the proposals of a committee that it constituted itself, Debapriya pointed out.
It formed a core committee on transit headed by Tariff Commission chairman to formulate proposals on transit and transshipment, he added.
"The core committee put forward proposals on collecting fee on river transit and transshipment, but we don't have any reason to believe that the government has taken those into cognizance."
IMPLICATIONS FOR FUTURE
Debapriya said the government has set a bad precedent by not imposing any fee on such cargoes, as it would have negative impact on future negotiations.
"When there'll be a negotiation with India for fixing transit fee, the current situation could be referred to as a precedent," the economist cautioned.
"In fact, the Bangladesh government has already damaged its interest by flip-flopping on its stance", he added.
The government earlier imposed a transit fee of Tk 10,000 per container and Tk 1,000 for per-tonne bulk cargo for riverine transport through a statutory regulatory order in 2010-11 fiscal and collected about Tk 0.6 million as fee from India.
But later it was withdrawn, and it is widely believed that a certain quarter within the Bangladesh government pushed the move.
MINISTERS VS ADVISERS
Two influential advisors of the prime minister offered the idea that Bangladesh should not be making any profit out of the service.
Moshiur Rahman, the economic advisor, in March said that Bangladesh should not charge any fees for either transit or transshipment.
Rahman, a former bureaucrat, however, said in June that the government plans to incorporate a provision for 'justified profit' in terms of financial returns in the transit rate fixing policy.
On the other hand, foreign affairs advisor Gowher Rizvi in an interview to bdnews24.com in April said the country had every right to demand a toll or usage fee for providing transit facility.
"But the amount should be usually to cover the cost of maintaining and improving the infrastructure facilities for connectivity," said Rizvi, an academician.
A third view came from foreign minister Dipu Moni, who at a press briefing in May said Bangladesh should get share of the benefit of transit that neighbouring countries would make.
She also said it does not make any sense if the government only concentrates on recovery of cost spent on building the infrastructure for transit.
Similarly, finance minister AMA Muhith last year on several occasions emphasised on making profit from the transit service.
"Indeed, commercial transshipment without any fees through Ashuganj-Akhaura explicitly contradicts the professed position of the government," said Debapriya.
Since the 1980s, India has been demanding transshipment facilities for goods through Ashuganj river port from Kolkata to Tripura. But finally, the port turned into a transshipment point in May last year.
During the visit of Indian premier Manmohan Singh early September, Bangladesh apparently refused to sign transit-related exchange of letter as the two countries failed to strike the Teesta water deal.
However, in the joint communiqué issued on Sep 7, both the heads of government asked the authorities concerned to expedite the process to complete the transit facility formalities.
"In view of the recent development of fee-free transshipment, it is now to be seen how the bilateral transit negotiations proceed in the future," the CPD fellow said.
The first commercial transshipment cargo from Kolkata to Tripura through Ashuganj rolled on Wednesday without paying any transit or transshipment fee to the government.
"The government is not recovering even the economic cost for providing the service, let alone collecting the transit and transshipment fee from Indian cargoes," private think-tank Centre for Policy Dialogue's distinguished fellow Debapriya Bhattacharya told bdnews24.com on Thursday.
Inland vessels in Bangladesh enjoy certain subsidy on fuel or in the form of no-charge on pollution or reduced berth or river charge, "but why on earth we're providing the same subsidy for transporting cargoes from one part of India to another?" he wondered.
GOVT CONTRADICTS SELF
The government by allowing free transshipment is working against the proposals of a committee that it constituted itself, Debapriya pointed out.
It formed a core committee on transit headed by Tariff Commission chairman to formulate proposals on transit and transshipment, he added.
"The core committee put forward proposals on collecting fee on river transit and transshipment, but we don't have any reason to believe that the government has taken those into cognizance."
IMPLICATIONS FOR FUTURE
Debapriya said the government has set a bad precedent by not imposing any fee on such cargoes, as it would have negative impact on future negotiations.
"When there'll be a negotiation with India for fixing transit fee, the current situation could be referred to as a precedent," the economist cautioned.
"In fact, the Bangladesh government has already damaged its interest by flip-flopping on its stance", he added.
The government earlier imposed a transit fee of Tk 10,000 per container and Tk 1,000 for per-tonne bulk cargo for riverine transport through a statutory regulatory order in 2010-11 fiscal and collected about Tk 0.6 million as fee from India.
But later it was withdrawn, and it is widely believed that a certain quarter within the Bangladesh government pushed the move.
MINISTERS VS ADVISERS
Two influential advisors of the prime minister offered the idea that Bangladesh should not be making any profit out of the service.
Moshiur Rahman, the economic advisor, in March said that Bangladesh should not charge any fees for either transit or transshipment.
Rahman, a former bureaucrat, however, said in June that the government plans to incorporate a provision for 'justified profit' in terms of financial returns in the transit rate fixing policy.
On the other hand, foreign affairs advisor Gowher Rizvi in an interview to bdnews24.com in April said the country had every right to demand a toll or usage fee for providing transit facility.
"But the amount should be usually to cover the cost of maintaining and improving the infrastructure facilities for connectivity," said Rizvi, an academician.
A third view came from foreign minister Dipu Moni, who at a press briefing in May said Bangladesh should get share of the benefit of transit that neighbouring countries would make.
She also said it does not make any sense if the government only concentrates on recovery of cost spent on building the infrastructure for transit.
Similarly, finance minister AMA Muhith last year on several occasions emphasised on making profit from the transit service.
"Indeed, commercial transshipment without any fees through Ashuganj-Akhaura explicitly contradicts the professed position of the government," said Debapriya.
Since the 1980s, India has been demanding transshipment facilities for goods through Ashuganj river port from Kolkata to Tripura. But finally, the port turned into a transshipment point in May last year.
During the visit of Indian premier Manmohan Singh early September, Bangladesh apparently refused to sign transit-related exchange of letter as the two countries failed to strike the Teesta water deal.
However, in the joint communiqué issued on Sep 7, both the heads of government asked the authorities concerned to expedite the process to complete the transit facility formalities.
"In view of the recent development of fee-free transshipment, it is now to be seen how the bilateral transit negotiations proceed in the future," the CPD fellow said.
