Consortium of 3 companies keen in operating NCT

A consortium of three private sector companies has shown renewed interest in operating the country’s largest, busiest and most important container terminal, the New Mooring Container Terminal (NCT) at the Chattogram Port. After UAE-based DP World and domestic company MGH Group, they have now formally proposed to operate the terminal. Two of the three companies in this consortium are owned by two members of parliament from the government. According to sources, discussions have been going on for a long time about operating the NCT.

Since the Awami League government, DP World of the United Arab Emirates offered to operate the terminal on a lease.

The proposal during the Awami League period reached the negotiation stage during the interim government, but it was suspended due to controversy, worker dissatisfaction and objections. Recently, initiatives have been taken to activate the evaluation and negotiation process again. The port’s workers and employees have once again threatened to protest on the issue. After DP World, domestic company MGH Group showed interest in operating the NCT a few months ago. Among them, the Saif-Cosmos-Everest Port Services Consortium has made a new proposal.

It submitted its proposal to the Ministry of Shipping on April 28. In the proposal, the consortium wants to take over the management of NCT for 15 years. The partner companies in the alliance include Saif Powertech Limited, Cosmos Enterprises and Everest Port Services Limited. Port officials said that NCT is the most important of the four container terminals at Chattogram Port. Last year, about 44 percent of the total containers handled at Chattogram Port were handled at this terminal. As a result, the government’s decision on the future management of the terminal will have a significant impact on the country’s import-export trade. The new consortium’s proposal states that the ownership and control of the terminal will be kept with the Chattogram Port Authority (CPA).

They only want to take responsibility for operation, maintenance, manpower management and fuel costs. The port authority will collect all types of charges related to ships and containers. In return, the consortium will receive a fixed fee for handling each container. A source in the new consortium said that if their proposal is implemented, the port’s revenue will continue to grow. In addition, the private sector will bear a large part of the operating expenses.

This will reduce the financial pressure on the port and improve the quality of services without additional investment. Saif Powertech, which is leading the consortium, has been involved in the port’s container operations for a long time. The company was once also responsible for managing the NCT. Currently, they are the ones who manage container handling and ancillary activities at the CCT. The other two partners, Cosmos Enterprises and Everest Port Services, have also been operating goods and container handling activities at the port for decades. Two members of the current parliament are involved in the ownership of the two companies in the alliance.
The chairman of Cosmos Enterprises is a ruling party MP and Whip ABM Ashraf Uddin Nijan, and the managing director of Everest Port Services, Shahadat Hossain Selim, is also a ruling party MP. The proposal by the consortium to take over the management of NCT for 15 years has sought an operating fee of $69 for each 20-foot container handled. Citing the Chattogram Port Authority’s own information, the proposal says that the port currently earns $161.82 for each 20-foot container. It spends $56.15 on terminal operations.
The port makes a net profit of $105.67. They said in the proposal that the port can make a profit of $92 on each 20-foot container without any additional investment. In addition, there will be no expenditure on fuel, maintenance and manpower. A source from the port users said that if local institutions are given priority in managing strategic facilities like the port, the flow of money within the country will be maintained and national capacity will be strengthened.
They also believe that foreign exchange savings and security issues need to be taken into consideration. However, this new proposal is not yet at the decision-making stage. Because the government’s discussions with DP World on the management of NCT are still ongoing. Sources said that there is not much scope for new proposals to be discussed before a decision is finalized on DP World’s proposal. Port sources said that if the ongoing talks with DP World are not successful, a fresh tender may be called. In that case, along with other interested domestic and foreign companies, the proposal of this new consortium may also be considered. The sources said that the government now has multiple options for the future management of NCT.
Whichever model is finalized, whether it is a long-term lease through a foreign operator, a PPP model by a domestic company or a proposal from a domestic consortium based on management services, will have a long-term impact on the efficiency, capacity and revenue management of the country’s main seaport.