In a significant development for Bangladesh’s maritime trade and port management sector, a Saudi Arabian firm has officially confirmed a 22-year contract to manage the Patenga Container Port. Ambassador Essa bin Yousef Al Duhailan of the Kingdom of Saudi Arabia (KSA) stated that the deal with Red Sea Gateway Terminal (RSGT) Company is anticipated to be signed by November this year.
You can also read: EPZ in Patuakhali to boost investment and export opportunities
The $240 million newly-built terminal is located in Bangladesh’s main seaport Chittagong, the first planned terminal at the port since New Mooring Container Terminal (NCT) in 2007. The Port of Chittagong (recently renamed as Chattogram), handled a record 3.2 million TEU in FY 2021-2022, with 4,209 vessel calls, and is the busiest port in the Bay of Bengal, serving as the gateway for 90 per cent of Bangladesh’s import and export ocean cargo.
The Agreement
The Bangladeshi Ministry of Shipping has formally selected Red Sea Gateway Terminal (RSGT) to operate the new 500,000 TEU Patenga Container Terminal at Chittagong Port. The Chattogram Port Authority (CPA) and Red Sea Gateway Terminal, which is currently managing operations at the King Abdul-Aziz Port in Jeddah affirms the agreement after several rounds of negotiations between the Saudi firm and Bangladeshi authorities.
The contract grants the RSGT exclusive rights to manage and operate the Patenga Container Port for a period of 22 years. Under the terms of the agreement, the Saudi firm will be responsible for the day-to-day management of the port, including handling operations, container logistics, and infrastructure maintenance.
“We are extremely pleased to have been selected for this opportunity. The rapid growth of Chittagong Port’s cargo volumes necessitates further investment in modern equipment, advanced technology and building new human capacity. This project fits well with Red Sea Gateway Terminal’s competencies and its expansion strategy for emerging markets. We are very confident that, through this investment, we will be able to contribute significantly to Bangladesh’s fast-growing trade and economy” stated RSGT’s Director of Global Investments, Gagan Seksaria.
What are the objectives?
RSGT said it will equip and operate the terminal on the basis of a long-term concession from the Chittagong Port Authority (CPA), subject to the completion of a formal procurement and negotiation process and approvals by the relevant authorities.
The primary objectives of the contract are to modernize and optimize the port’s operations, thereby increasing its capacity and overall efficiency. This move comes as part of the Bangladeshi government’s broader efforts to attract foreign investment and expertise in key sectors of the economy. RSGT’s experience and expertise in managing ports and maritime logistics are expected to bring cutting-edge technologies and best practices to Patenga, potentially transforming it into a world-class container terminal.
The contract is also expected to have positive implications for the region’s trade and economy. The upgraded infrastructure and streamlined operations at the Patenga Container Port are likely to attract more international shipping lines and investors, leading to increased trade opportunities for Bangladesh. As a result, the port’s significance in regional and global trade corridors is likely to grow, benefitting both the government and private enterprises.
Investment and Upgradation Plans
As part of the contract, RSGT has committed substantial investment in upgrading the port’s infrastructure and facilities. The investment is set to be allocated towards the construction of new container yards, the acquisition of state-of-the-art handling equipment, and the implementation of advanced digital systems for seamless operations.
Moreover, the RSGT plans to focus on workforce development, providing specialized training to local employees to ensure the transfer of skills and knowledge. This investment in human capital is expected to contribute to the growth of the maritime industry and create job opportunities for the local workforce.
The Government of Bangladesh adopted a “Policy for Implementing Private-Public Partnerships (PPP) Projects through Government-to-Government Partnerships (G2G)” back in 2017. In July of 2019, RSGT and the Ministry of Shipping of Bangladesh signed a Memorandum of Understanding (MOU) under which RSGT will invest in and provide operational assistance and expertise to the Bangladeshi port sector.
A further MOU was signed between the Ministry of Investment of Saudi Arabia (MISA) and the PPP Authority (PPPA) of Bangladesh, on October 28th, 2021. This was followed by the First Joint Platform Meeting between the two parties, held on February 23rd, 2022.
Mr. Zafar Alam, Chairman of the Bangladesh Port Authority, expressed his confidence in RSGT’s capabilities and emphasized the positive impact of this collaboration on Bangladesh’s maritime sector. He remarked, “We believe that the involvement of Red Sea Gateway Terminal will greatly enhance the efficiency and productivity of the Patenga Container Terminal. With their extensive experience and advanced technology, we can transform this facility into a major trade hub, attracting more shipping lines and driving economic growth.”
The Patenga Container Terminal, located near the port city of Chittagong, is one of the busiest ports in Bangladesh and a crucial gateway for trade in the region. With RSGT’s appointment, the terminal is expected to witness a significant upgrade in infrastructure, operational efficiency, and technological advancements. The implementation of state-of-the-art equipment and digital solutions will streamline processes, reduce turnaround times, and ensure smoother cargo handling operations.
