Govt hikes vessel rent in fresh blow to Pangaon port [ Tritiyo Matra News ]

Govt hikes vessel rent in fresh blow to Pangaon port

Local October 28, 2015

The shipping ministry on Monday increased the container vessel rent by 46.66 per cent for the route of Pangaon Inland Container Terminal-Chittagong Port amid protest by users and other stakeholders.
The increased rent may further discourage the importers and exporters to use the Pangaon ICT which has remained practically unutilised for the last 24 months since its inauguration in November 2013 because of higher cost of container vessel, other port charges, lack of container and irregular schedule of vessels, they said.
According to a circular issued by the ministry, the vessel rent for the 40 TEUs (twenty-foot equivalent units) loaded container has been increased to $440 from the current $300 while the rent for 20 TEUs stuffed container has been hiked to $220 from $150.
On the other hand, the fare for 40 TEUs empty container was fixed to $220 which was $150 before the new chart.
The rent for 20 TEUs empty container was fixed to $110 from $75.
The circular signed by shipping ministry additional secretary Nasir Arif Mahmud, stated that the rent was fixed temporarily to make the terminal operational in full swing and to introduce scheduled-based regular container vessel service in the route.
Officials of Chittagong Port Authority, National Board of Revenue and traders said that they had rather made a proposal to the ministry for reducing the existing fare instead of increasing to make the Pangaon ICT vibrant and attract exporters and importers to use the terminal.
The CPA had proposed the ministry to reduce the rent up to 58 per cent for both the stuffed and empty containers for at least six months and set the rent to $125 and $62.50 for 40 TEUs stuffed and empty container respectively and to $62.50 and $50 for 20 TEUs loaded and empty container respectively.
Mahmud told New Age on Tuesday that the new rate was fixed by a committee headed by shipping minister Shajahan Khan taking the costing of private vessel owners into the consideration.
The ministry has considered investment, bank loan, insurance cost, fuel cost and salary of crews of private operators while fixing the new rate, he said, adding that vessel owners would not fly their vessels if the rent was not competitive.
The government gave licence to 32 private operators to ply their vessels in the route. Till now, no licence holders could float ships in the river.
The CPA officials said two vessels of Nou Kallyan Sangstha and one of Nipa Paribahan would soon start plying the route.
‘The earlier rent chart was incomplete as there were no ships from the private sector to ply the route,’ Mahmud said.
Traders showed reluctance to use the terminal as there was no fixed schedule of vessels for the route, he said adding that now private sector will ply their vessels the route with fixed day sailing to carry import and export goods.
Soon, the ministry will also reduce the port tariff by 70 per cent so that import and export through the terminal become competitive, he said.
Dhaka Customs Clearing and Forwarding Agents Association vice-president Lokman Hakim told New Age that the ministry increased the rent to give extra benefit to Summit Alliance Port Limited as the CPA has already leased out its three ships which originally procured for Pangaon to the company for carrying goods to and from its own container terminal.
Summit has set up a private container terminal and freight station at Mokterpole in Munshiganj and the government increased the fare to make the summit profitable, he alleged.
Even, at a meeting with shipping ministry, Nou Kallyan Sangstha proposed rent at much lower rate at $240 and $120 for 40 TEUs and 20 TEUs containers respectively, Hakim, who also imports goods through Pangaon, said.
‘Many importers like me have already stopped to opening letter of credit to import products through Pangaon as the cost of import is very high,’ he said.
The revenue board also said that the ministry did not consult with it which also proposed to reduce the vessel rent before hiking the rent, a NBR official said.
He said that only 12 container vessels with 384 containers came in the terminal in July-September period of the current fiscal year whereas the terminal has the annual capacity of handling 1.16 lakh containers.
The new high rent will be devastating for the port to make it attractive to the users, he said.
The NBR has already called an inter-ministerial meeting to find out ways for solving the problems as it is very keen to make the terminal fully operational, he added.