New mode of Inland trade connectivity and development

AKM Asaduzzaman Patwary

Research Fellow, DCCI

 Government commits to private sector investment of GDP and private sector development and poses emphasis on various pressing contemporary macro economics issues. In line with this, relentless demand for communication infrastructure is critical for sustainable trade and economic growth in complex world economy.

Bangladesh essentially needs enormous infrastructure development encompassing energy security, multi modal communication infrastructure connectivity for intra-country, regional engagement for unfolding manifold economic leverage, outcome for own and neighboring economies. Communication Infrastructure has been rated globally inevitable to earn desired global growth. Water connectivity infrastructure development portfolio has great deal of importance in line with our growing Industrialization contributing to GDP.

screenshot-17River has got enormous position across the history as many ancient civilizations were built concentrating river like Tigris-Euphrates valley Mesopotamian civilization, Nile valley Egyptian civilization and Yellow River Chinese civilization are remarkable. River has endowed human lives in many respects ranging from promoting subsistence livelihoods, building trade base and local micro economic foundation. Since British regime in 1830, River transport was used extensively for transport and trade Indian sub-continent in regions. Therefore, livelihoods have always been benefited from the rivers and urbanization of Bangladesh has also been river-centric. Vietnam and Netherlands are also riverine economies. Bangladesh is blessed with a large number of rivers stretching 5,968 km of navigable waterway of the total 24,140 km waterway with rivers, stream and canals and 700 rivers passes through our country. Around 22 river ports and 450 small-medium ports are across country-wide waterway. Bangladesh’s network of 3,900 kilometers of inland waterway is the only mode of transport for 12% of country’s rural communities. The contribution of water transport to GDP is 0.89% whereas road transportation is around 7%.

Our Inland Waterways Transport could play an important role in cargo and passenger handling, ensuring trade facilitation and regional integration. IWT accounts for 47% and 40% of the total transportation available within China and the EU respectively whereas our IWT contains 50% of all freight traffic and 25% of all passenger traffic.

Our rail and road network is uncompetitive as they are incrementally busy and time-consuming. Relating to Dhaka-Chittagong route, both the price of container transport and the speed of transport are major arguments in favor of inland water transportation in comparison with transportation by road or railway. Container transportation from Dhaka to Chittagong takes approximate 02 days by truck per container, 7days by train and by ship 16 hours with relatively low cost. Against this state, the inland water connectivity could massively trim cost and time overrun. Our inland water transportation accounts for around 40% of cross-border trade. Inland waterway transport is less expensive and essential for trade among the country’s biggest cities and with neighboring India and Bhutan. Inland waterway has overall cost advantage over other modes. A past study of World Bank estimated Tk. 1.00 for IWT, Tk.4.5 for road and Tk. 2.5 for rail to transport per ton cargo per km and concentration of IWT could save about 60 million liters of fuel per year. A report of Chittagong port stated bulk of commodities handled in the maritime port are mostly transported through inland waterways to different destinations of which 61% is transported by waterways, 38% by road and only 1% by rail.

The distance of the river route from Chittagong to Dhaka is approximately 157 nautical miles having 4.5 Mtr river draft. The large rivers having maximum draft of 4 meter are well-connected to two major maritime ports and new port of Payara. Therefore, inland waterway could become the most convenient mode of hinterland connectivity. Moreover, the national imperative to develop inland river transport stems from energy economics and efficiency in terms of cargo mobility. Globally, it is 150kg for trucks, 500kg for railway and 4,000kg for inland water transport. In terms of energy, inland shipping consumes 63kwh/1000 tonne-km while rail transport consumes almost double that 120 Kwh and truck consumes 252 Kwh.

 Inland water transportation is interconnections with other transport modes as there are many inland ports and terminals across inland waterway, approximately 3.7 berthing facilities per 100 route-km.

To reap this benefit of water connectivity potentials, there are wide-ranging visible challenges like navigability in dry season, weak port operation, inadequate port handing equipment, pilotage and hydrographic survey, well-equipped liner vessels, limited night navigation, limited traffic surveys, passenger and cargo requirements, feeders and creek routes, port and city road network and limited dockyard facilities as pre-requisites for capacity building and logistic support system to revolutionise our local supply chain network management.

container-congestion-at-chittagong-portAlongside, insufficient capacity for growing merchandise in-country transportation, LNG cylinder and liquid fuel transportation, storage and fuel carriers, economic zone supporting river port capacity, large vessel-accommodation specialized jetties as well as materials, machinery handling support can be addressed for handling growing capacity of IWT. The growing demand of Chittagong port use marks rapid handling and container management capacity building and improvement of entire service delivery system.

The modern and uninterrupted waterway development can open up the multilateral trade network across our regional economic blocs BCIM maritime silk route and almost all ASEAN economies marking trade opportunities unlocking blue economy and enabling export expansion creating greater momentum. Our water connectivity can also align Bhutan and Nepal and India under BBIN protocol as three large rivers sources through India. Our inland water network can also extend to northeastern states of India and mainland of India for mutual trade benefits and expand trade with India and other neighboring countries next to India enlarging our trade basket.

For entwined waterway connectivity, India and Bangladesh signed the Protocol on Inland Water Transit and Trade on seven routes for the transportation of goods which need to be revamped and effectively implemented in no time to step forward our bilateral our bilateral trade relation.

Government, taking the multidimensional and integrated water way connectivity utility into account, undertook 65 main river navigation routes development schemes aligning regional water connectivity to reap maximum economic benefits. 15-year long master plan of Government to improve navigability of countrywide waterways can be another greater dimension in our waterway development.

Progression of inland water-transport condition and logistic competitiveness for sustaining our regional and global value chain require extensive focus for full utilization of Inland Waterways through timely policy formulation, long-term infrastructure development scheme and focused initiatives for public and private investment as public investment in shipping sector is less than Transport & Rail sector and national development budget is inadequate. With development spree in Inland water connectivity, our shipbuilding industry will have momentum catering growing local logistic needs.

screenshot-19Indeed, Waterway connectivity development can bridge rural and urabn economies enabling wide-spanning multiple socioeconomic impacts, engendering new economic opportunities like private investment growth, regional employment generation along the river ports and adjacent districts as well as facilitating our local inclusive and logistic value chain and SDG indicators. Chittagong port is witnessed consistent cargo handling growth despite hardcore infrastructure limitations over the years. But, to ease the Chittagong, Pangaon terminal is made obligated for primary textile industry users to some extent. However, Pangaon port capacity is to be enriched and equipped more for Textile business and caters other export sectors.

Our Textile Industry and export have made sustainable growth over last one and half decade. This unrivaled growth leader has outpaced other export oriented industries and set a vision of $50 billion cumulative export earnings by 2021. Our conventional road transport system cause around $650 Million export earning loss and including import loss in International trade is around $850 Million which hold back our rapid and extra ordinary growth of textile led export earning growth. On the other hand, Global protectionism policy affects our yearly export earning. Considering entire gamut, our transport logistic network needs to be multi modal rather than unimodal.

Creating synergy of effective waterway and innovative economic opportunities is needful to build Bangladesh charting the way of intensive investment opportunities and incorporated sub-regional waterway connectivity achieving of long-cherished journey of being a Developed economy by 2041 as Inland water connectivity is an exclusive and most reliable means to steer our economic visions and nation into new height.