Chattogram Port at the Crossroads: Reforming a Gateway to Bangladesh’s Future

 

By Ghulam Suhrawardi

Drawing upon a lifetime of academic scholarship, professional engagement, and policy observation, I offer this article as a critical intervention into one of the most pressing infrastructural challenges confronting Bangladesh and the broader South Asian region. The Port of Chattogram is far more than a logistical hub—it is the economic lifeline of the nation. Positioned at the vital intersection of the Karnaphuli River and the Bay of Bengal, it facilitates over 90% of Bangladesh’s international maritime trade. Its proximity to strategic corridors—including India’s Northeastern frontier, Myanmar, and China’s Belt and Road Initiative—further amplifies its geopolitical importance.

Any disruption in the port’s efficiency reverberates across the national economy, from slowing industrial output and crippling export channels to deterring foreign investment and inflating consumer prices. Yet, despite its unparalleled significance, Chattogram Port remains paralyzed by entrenched inefficiencies, systemic corruption, and institutional inertia. The moment for reform is fast slipping away. This article seeks to illuminate the urgency of comprehensive modernization—not as a matter of convenience, but as a strategic imperative for national resilience, regional connectivity, and long-term economic sovereignty.

A Deep-Rooted Crisis: Systemic Corruption and Institutional Paralysis

Upon taking office, interim government Shipping Advisor Dr. Shakhawat Hossain bluntly described the shipping sector’s endemic corruption as “as deep as the Pacific Ocean.” His stark warning is substantiated by an audit from the Comptroller and Auditor General (CAG), which unearthed financial irregularities amounting to Tk 258 crore between FY 2017–18 and FY 2019–20 within the Chattogram Port Authority (CPA). These include:

• Violations of procurement and financial transparency laws
• Disregard for Public Procurement Rules (PPR) 2008
• Irregular expenditures and unlawful recruitment
• Non-transparent lease agreements and unexplained advance payments

Despite these revelations, accountability remains elusive. The CPA chairman and the Ministry of Shipping have not provided adequate public responses, reinforcing a culture of impunity. This institutional inertia continues to erode the port’s operational credibility and public trust.

Understanding the Key Entities in Port Governance

Reforming Chattogram Port requires unpacking its complex institutional structure:

• Chattogram Port Authority (CPA): The statutory body under the Ministry of Shipping, responsible for infrastructure development, port safety, licensing, and channel maintenance. It also acts as a landlord and sometimes a limited operator.
• Port Operators: Generally private firms, both local and foreign, that manage container terminals and logistics chains under lease agreements from CPA.
• Stevedores: Labor contractors responsible for physically loading and unloading cargo. These entities operate under permits from CPA but are often controlled by powerful syndicates.
• Service Providers: Small- and medium-sized vendors delivering tugboat services, bunkering, pilotage, and ship repair. Though essential, they lack policy influence.

This multi-actor environment creates a bureaucratic labyrinth—ripe for corruption, delays, and inefficiencies.

CPA and the Port Operator Debate: Reform vs Resistance

The ongoing debate over the future of Chattogram Port has reached a critical juncture, as the interim government has proposed the introduction of internationally renowned port operators to overhaul its operational model. Among the contenders are some of the world’s most experienced and efficient port management companies, including DP World (United Arab Emirates), APM Terminals (Netherlands), PSA International (Singapore), International Container Terminal Services Inc. (ICTSI) (Philippines), and Ports America (United States). These global giants have an established track record of transforming outdated and congested ports into world-class logistical hubs—enhancing competitiveness, reducing congestion, and catalyzing regional trade.

These companies bring with them advanced terminal management systems, digitized customs and cargo handling, and automated equipment that drastically cut vessel turnaround times—often from several days to less than 24 hours. For instance:

• DP World’s Jebel Ali Port in Dubai handles over 15 million TEUs annually with some of the lowest dwell times in the world.
• APM Terminals in Rotterdam is known for its robotic cranes and automated guided vehicles, optimizing both safety and throughput.
• PSA International’s flagship port in Singapore is widely regarded as the most efficient transshipment hub globally, operating 24/7 with AI-based container tracking systems.

The case for engaging such operators in Chattogram is built on several measurable advantages:

• Significant gains in operational efficiency, reducing bottlenecks and delays.
• Integration of cutting-edge technology, including digital port logistics, e-customs clearance, and automated cargo terminals.
• Increased foreign direct investment (FDI), as global operators often bring not just capital but also international trade linkages and financing capabilities.
• Stronger integration into global supply chains, allowing Bangladeshi exporters to access more competitive shipping rates and faster routes.

However, this push for reform has encountered intense institutional resistance, particularly from factions within the Chattogram Port Authority (CPA), politically affiliated labor syndicates, and vested interest groups. While these groups frame their objections in terms of protecting national sovereignty and safeguarding employment, the underlying motivations often reveal a desire to maintain monopolistic privileges.

At the heart of the opposition lies:

• A fear of losing control over opaque procurement processes, which are often marred by inflated contracts and non-competitive bidding.
• Resistance to merit-based recruitment, which threatens existing systems of nepotistic appointments and politically motivated placements.
• Concerns over reduced discretionary financial flows, as private operators would introduce transparent accounting and stricter auditing standards, thereby limiting avenues for rent-seeking behavior.

Furthermore, internal CPA audits and media investigations have frequently highlighted inefficiencies, procurement violations, and revenue leakages—all of which would likely be curtailed under an international operator’s stringent governance and oversight frameworks. This explains the reluctance of certain officials and labor leaders to welcome reform, as the introduction of a globally accredited port operator would not only disrupt the existing power matrix but also expose long-standing systemic malpractice.

The broader implication is clear: this is not a battle between foreign control and national interest, but rather a contest between progress and protectionism. Without reform, Chattogram Port risks falling further behind its regional competitors such as Colombo, Visakhapatnam, and Yangon—all of which are modernizing rapidly and attracting transshipment traffic that could otherwise benefit Bangladesh.

Ultimately, the future of Chattogram Port hinges on the political will to overcome entrenched resistance and embrace a modern, competitive, and professionally managed port ecosystem—one that serves the interests of the nation rather than the narrow agendas of a few.

Labor and Syndicate Resistance: A Barrier to Progress

For decades, labor unions and syndicates have exercised monopolistic control over cargo handling, container movement, and port transport. These groups often act as informal gatekeepers, extracting unofficial fees and stalling operations to assert dominance.

While labor leaders claim that foreign operators would outsource jobs and marginalize local workers, this claim lacks economic validity. In fact, modern ports operated under global standards typically increase employment by:

• Introducing new skilled job categories (e.g., crane operators, IT logistics coordinators)
• Providing training and certification programs
• Paying higher wages for productivity-linked roles

Furthermore, Bangladesh has a comparative advantage in labor costs—making it financially impractical to bring in a foreign workforce. What is needed is a labor transition plan, not a retreat from modernization.

Political Patronage and Karnaphuli Encroachments

Political interference and business patronage have distorted port development. Land allocation for warehouses, container depots, and service stations often bypasses competitive bidding and favors politically connected businesses.

Simultaneously, illegal encroachments on the banks of the Karnaphuli River have significantly narrowed navigable channels, threatening vessel access and sediment management. Encroachments, often linked to political figures or real estate syndicates, continue with impunity, despite High Court orders to remove them.

Unchecked river pollution from untreated industrial waste and residential runoff further jeopardizes port sustainability, endangering Bangladesh’s only deep-draft maritime artery.

Port Congestion and Customs Corruption: A Bottleneck for Growth

One of the most debilitating challenges facing Chattogram Port today is chronic congestion and inefficiency, particularly in vessel turnaround and cargo clearance. While global ports such as Singapore, Rotterdam, and Colombo boast vessel turnaround times of just 12 to 18 hours, ships at Chattogram often wait an average of 72 to 96 hours (3 to 4 days) to unload and depart. This disparity significantly increases the cost of doing business in Bangladesh—through elevated demurrage charges, delayed deliveries, and lost commercial opportunities.

This persistent congestion has wider economic implications. Exporters—especially in the ready-made garments (RMG) and perishable goods sectors—face shipping delays that compromise delivery commitments to international buyers. Importers, on the other hand, suffer from prolonged clearance times that slow down production cycles and inflate input costs. The situation is especially detrimental to small and medium enterprises (SMEs), which lack the financial buffer to absorb such logistical inefficiencies.

Underlying Causes of Congestion

The root causes of congestion at Chattogram Port are structural, procedural, and institutional:

• Manual customs clearance and excessive paperwork: Despite the global trend toward digital port ecosystems and e-customs systems, much of Chattogram’s customs procedures remain manual. Forms must be physically submitted, reviewed, and signed—often requiring multiple visits to various counters. This not only slows processing but also creates opportunities for illicit “facilitation payments.”
• Insufficient berths and storage yards: The port operates far beyond its designed capacity. While the current infrastructure was built to handle roughly 1.5 million TEUs (twenty-foot equivalent units) annually, actual container volumes have surpassed 3.2 million TEUs, more than double its intended throughput. Expansion projects like the Bay Terminal and Patenga Container Terminal are ongoing, but delays in execution continue to hinder relief.
• Fragmented intermodal logistics: There is a lack of coordination between shipping lines, trucking syndicates, railway cargo services, and inland container depots (ICDs). This siloed operation results in trucks waiting hours or even days to access the port, compounding yard congestion and reducing overall cargo velocity.
• Absence of real-time container tracking systems: Unlike modern ports where GPS, RFID tags, and AI-enabled cargo monitoring ensure end-to-end visibility, Chattogram relies on outdated manual logbooks and limited software systems. This leads to misplaced containers, shipment misclassification, and inventory delays.

The Cost of Corruption in Customs

Beyond congestion, customs corruption remains a deeply entrenched barrier to efficiency and transparency. Traders frequently report:

• Systematic bribery for clearance acceleration
• Arbitrary valuation of goods leading to inflated duty payments or fines
• Misuse of discretionary power by customs officers to harass compliant businesses
• Delays engineered by officials to solicit unofficial payments

According to the World Bank’s Logistics Performance Index (LPI) 2023, Bangladesh ranks 88th out of 139 countries, scoring poorly on customs efficiency, tracking capabilities, and timeliness of shipments. In contrast, regional competitors like India (38th) and Sri Lanka (73rd) have made significant improvements by investing in digital customs systems, anti-corruption task forces, and logistics automation.

A study by the Bangladesh Institute of Development Studies (BIDS) estimates that logistical inefficiencies—including customs-related corruption—cost the national economy 1% to 1.5% of GDP annually, primarily through higher transaction costs, reduced export competitiveness, and forgone FDI.

Breaking the Logjam: A Reform Blueprint

To resolve these systemic challenges, a multi-pronged strategy must be pursued:

1. Full-scale automation of customs operations through a National Single Window (NSW) system, integrated with shipping lines, banks, and tax authorities.
2. Expansion of port capacity with rapid completion of Bay Terminal, new container yards, and modernization of equipment such as gantry cranes and rubber-tired gantries.
3. Implementation of digital cargo tracking systems, including RFID, IoT, and blockchain-based documentation.
4. Deployment of anti-corruption watchdogs and digitized audit trails to enhance transparency in customs assessments and discourage rent-seeking behavior.
5. Better multimodal coordination among CPA, Bangladesh Railway, trucking associations, and private ICDs to ensure seamless cargo flow.

Port congestion and customs corruption represent not only logistical bottlenecks but also broader governance failures that undermine Bangladesh’s aspiration to become a regional trading hub. Unless addressed with urgency, these challenges will continue to erode the country’s trade efficiency, investor confidence, and economic momentum. Reforming Chattogram Port is thus more than a matter of infrastructure—it is a test of the nation’s political will, administrative capacity, and vision for a globally competitive economy.

A Way Forward: Pragmatic, Transparent, and Strategic Reforms

To unlock Chattogram’s full potential, Bangladesh must embrace a reform agenda grounded in global best practices and national ownership. This includes:

1. Public-Private Partnership (PPP) via BOT Model: International operators can build, operate, and transfer terminal operations, with full local staff integration and oversight by CPA and security agencies.
2. Customs Automation and Digitalization: End-to-end digitization of customs processes through single-window platforms, AI-based risk assessments, and blockchain-enabled cargo tracking.
3. Labor Re-skilling and Inclusion: Create a phased labor transition policy involving trade unions to retrain and absorb existing workers into higher-skilled roles.
4. Anti-Encroachment Enforcement: Form a joint task force involving the Ministry of Environment, CPA, and local law enforcement to clear riverbanks and implement zoning regulations.
5. Integrated Connectivity Investment: Expand road, rail, and inland waterways from Chattogram to Dhaka, Sylhet, and industrial SEZs to create a seamless supply chain ecosystem.

 Conclusion: Seizing the Strategic Moment for National Renewal

Chattogram Port now stands at a defining crossroads—one that will shape the economic trajectory of Bangladesh for decades to come. This is not simply a matter of administrative reform or port logistics; it is a decisive test of national ambition, governance integrity, and economic foresight. The port’s transformation is no longer a political option—it is a strategic necessity for Bangladesh to realize its aspirations of becoming a competitive middle-income country, a regional transshipment hub, and a sustainable maritime economy in the Indo-Pacific.

With global supply chains shifting and regional ports in India, Sri Lanka, and Southeast Asia rapidly modernizing, Bangladesh risks falling behind if bold, evidence-based action is not taken now. The opportunity cost of inaction is staggering—measured in lost investments, eroded exporter confidence, rising logistics costs, and diminishing geopolitical leverage.

To seize this pivotal moment, a holistic reform agenda must be embraced, anchored in five interlocking priorities:

1. Break the Cycle of Misgovernance and Corruption

Chattogram Port’s operational inefficiencies are deeply tied to a culture of entrenched patronage and systemic rent-seeking. Replacing discretionary governance with transparent, accountable institutional frameworks—particularly within the Chattogram Port Authority (CPA) and customs—is essential. This includes digitization of all procurement, licensing, and clearance processes, backed by audit trails and independent oversight mechanisms.

2. Embrace Innovation and Global Best Practices

Modern ports operate as technology-driven ecosystems. Bangladesh must invite global port operators through transparent bidding to introduce automation, artificial intelligence, and integrated terminal management systems. These innovations can cut vessel turnaround times, streamline cargo flows, and align Chattogram with ports like Rotterdam, Jebel Ali, and Singapore. Building the long-delayed Bay Terminal must also be prioritized as a national infrastructure flagship.

3. Empower and Reskill the Labor Force

Reform must be inclusive—not at the expense of labor but in partnership with it. Skilled, well-compensated workers are the backbone of any modern port. Investment in training programs, international certification, and safety protocols will ensure that workers transition from manual roles to high-value, technology-enabled positions. This approach not only retains jobs but enhances worker dignity and income security.

4. Secure Environmental Sustainability and River Navigability

No reform will be sustainable unless the Karnaphuli River—Chattogram’s arterial waterway—is protected from encroachment, pollution, and sedimentation. River dredging, shoreline zoning enforcement, and industrial wastewater regulation must be urgently implemented. Greening port operations by investing in low-emission equipment and renewable energy systems can also reduce the port’s carbon footprint and align it with global climate benchmarks.

5. Invest in Multimodal Connectivity

Ports thrive only when connected. Expanding rail links, expressways, and inland waterways from Chattogram to Dhaka, the Economic Zones, and the northern corridor is critical for reducing transport time and ensuring seamless cargo movement. Integration with Bangladesh’s National Special Economic Zone (formerly Bangabandhu Sheikh Mujib Shilpanagar), the country’s largest industrial city, will position the port as a gateway for high-value manufacturing exports.

As Nobel Laureate Professor Muhammad Yunus profoundly stated, “Development is a journey, not a destination. And the vehicle must be fit for the road ahead.” The time has come to make Chattogram Port fit for that journey—through bold leadership, collaborative reform, and strategic vision. If navigated wisely, this transformation will not only elevate the port’s capacity but also symbolize a broader national renewal—one grounded in transparency, resilience, and prosperity.

The window is open. The future is waiting. The time to act is now.