Road to Industrialization

Bangladesh’s largest coal power plant, coal jetties and deep seaport projects are the outcome of the concept of the BIG-B (the Bay of Bengal Industrial Growth Belt) initiative. The BIG-B initiative was aimed at strengthening the development partnership between Bangladesh and Japan and the industrialization of Dhaka-Chattogram-Cox’s Bazar belt. Pankaj Dastider writes from Chattogram on the development impact of the BIG-B initiative.

The objective of the project is to develop a reliable and low-cost logistics network for sea-borne cargo/freight handling and transportation facilities to retain its competitive position in the regional and global arena. Bangladesh has planned to increase its power generation and expects 30 per cent power generation from the coal-fired power plants. The BIG-B initiative was considered as the centre of developing a giant coal-fired power project of 2,400 megawatts (MW) generation capacity with the most sophisticated Ultra Super Critical (USC) technology of Japan. Initially, construction of the 1,200 MW power project, with two units of 600 MW each, started in 2018 and 45 per cent of the overall physical works has been completed.

To implement the power plant project Bangladesh signed an agreement with Japan in 2014. While inaugurating construction works of the coal power plant on January 28, 2018, Prime Minister Sheikh Hasina said her government had put emphasis on electricity generation. Most people who suffered a lot from the scarcity of electricity in the past are now getting it. To pave the way for more electricity production her government has also opened up the sector to private investors by enacting related laws. With the country’s economic advancement the consumption of electricity has also increased. Keeping that in mind the government took steps to construct coal-based power plants. The JICA, Japan’s state-owned overseas funding agency, has come forward with its generous financial support and granted a huge amount of soft loan in the project worth about Tk 36,000 crore (Taka 360 billion). Of the cost, Japan has provided Tk 29,000 crore (Taka 290 billion) and the rest will be spent from the government exchequer. The 1200 MW coal power plant is being set up on 1414 acres of land in Matarbari and Dhalghata unions of Moheshkhali Upazila, and the power project will be built with the Ultra Super Critical technology, a highly sophisticated and environment-friendly technology of Japan. The implementing agency of the project is Coal Power Generation Co BD Ltd. So far, 43 per cent of overall physical works of the Bangladesh segment and 48 per cent of the JICA including the roads construction and township development have been completed.

A Japan-based survey recognized Bangladesh as one of the world’s promising investment destinations. But the position of the country in terms of infrastructure competitiveness is 126th among 133 states, according to the World Economic Forum’s Global Competitiveness report. So, Bangladesh should take up steps for a coordinated action plan for its infrastructure development with the highest priority. The country has shown great resilience even during the Covid-19 pandemic. Its sustained economic growth, rapidly expanding domestic market, and growing connectivity with a vast regional market of four billion people made it a promising destination even for us business and investment. 

The significant reasons for establishing a deep seaport in the Matarbari-Moheshkhali area are: a) to facilitate uninterrupted coal supply to the power plants there and elsewhere in the country, b) to support the country’s growing seaborne trade needs for the future, c) to go along with the global shipping trend of moving towards larger tonnage and d) to utilize our geographical advantage to become a regional access door to the sea. The coal that would be used by the plants should obviously be imported by ‘Handymax’ or ‘Supramax’ sized vessels drawing 12-15 metres. Neither Chattogram nor Mongla has that capacity and/or connectivity to feed the future power plants by handling such vessels. If we construct a port to enable the larger ships, say 16-metre draft to call in the port, the transportation cost of the export and import will come down by 15 percent and a good volume of foreign investment will be ensured, which will bring dynamism in our trade and industry. The port will pave the way for the expected growth of trade, business and industry. The infrastructure and communication system will develop which will generate huge employment for the countrymen. Export and import will grow further and revenue will grow considerably. Once constructed, the Matarbari deep seaport will be able to berth as many as 35 ships at the terminals at a time, and will be able to handle an additional 50 lakh (five million) TEUs containers a year.

The communication system is the main driving force of a country’s development. There is no alternative to interrupted development of the country’s communication system, such as road, rail, marine and airways. In this perspective, Bangladesh’s avenues to 32 Asian countries and Europe have been unveiled through 141,000 kilometres of the Asian Highway. Six road corridors under the ambit of the SARRC and seven road corridor networks under the BIMSTEC are connected to Bangladesh. The roads of Bangladesh are being used for the transportation of cargo to the seven northeastern states of India under the regional connectivity network. The roads are being used for the transportation of cargo from Nepal and Bhutan. Communications need to be developed with Myanmar and China. Matarbari is being developed as the country’s electricity hub. A 90-km pipeline has been set up from the floating LNG (liquefied natural gas) vessel in the Bay of Bengal. Jetties and warehouses are being constructed along the channel made for unloading and storing imported coal to feed power plants. In the absence of any appropriate accessibility of large vessels to either Chattogram port or Mongla port, the country’s exports and imports are carried out through transhipment from the Singapore port, which increases huge transportation cost and delayed shipment. This necessitated development of substantial new port capacity and the government considered developing port facilities for coal imports and storage. As Japan quickly responded to provide financial support the Bangladesh government gave top priority to the project in order to support the power generation plant. The 1,200 MW Matarbari Ultra Super Critical Coal-fired Power project contains components like the deep seaport for coal imports which is expected to provide the power generation companies with the opportunity to plan and develop coal-fired power plants.       

Abul Kalam Azad, Executive Director of the Coal Power Generation Co Bangladesh Ltd (CPGCBL), which is implementing the Matarbari Ultra Super Critical Coal-fired Power Project, said 45 per cent of the overall physical works of the project has been completed. Initially, works in two plants of 600 MW each is going on. The first unit is expected to be ready for commercial operation by January 2024 and the second unit of 600 MW will be ready by July 2024. Meanwhile, the feasibility study of the second 1200 MW coal-fired power project will be completed. Works on this project will start after the completion of the first project. He said that more than 10 ships already moored at the deep seaport at Matarbari. The Chattogram Port Authority said the first ship reached the Deep Seaport at Matarbari on 22 December 2020 as the authority conducted an experimental capacity test of the port under construction. Laden with steam generator parts, the Panama flag vessel “Venus Triumph” docked around 10:20 am sailing off from Indonesia’s Pt Pelabuhan Cilegon Mandiri port. Aiming at navigating the ship the Coal Power Generation Company Bangladesh Ltd created a 14-km channel with a width of 250 metres and depth of 18 metres. The ship entered into the channel from the Bay of Bengal. Matarbari Port Development Project is one of the Fast Track projects of the country. Works of the Tk 17,775 crore (Tk 177.75 billion) project, also financed by the JICA, started on November 16 last year (2020). The Japanese government has reportedly been interested in financing the Matarbari Deep Seaport development after the JICA had conducted a feasibility study on it. The study found that the development of a port in the proposed Matarbari area has huge potential in terms of its strategically important location in the Southeast Asia region. 

Japan’s eagerness to provide necessary financial support in developing the deep seaport was conveyed during the visit of its Prime Minister Shinzo Abe to Dhaka on September 6, 2014. At that time, the JICA Bangladesh officials said they are “very proud of being able to work together with the people of Bangladesh in their efforts of development which have resulted in great achievements.” The JICA said both the premiers, Sheikh Hasina and Shinzo Abe, agreed that the BIG-B, a grand decision to promote industrial agglomeration along the Dhaka-Chattogram-Cox’s Bazar belt, has great potential under the ongoing tectonic changes of the global economy. In the last quarter of the 20th century, the centre of gravity of the world economy moved from the Atlantic to the Pacific. The West Coast of the US, Japan, the Four Tigers of South Korea, Taiwan, Hong Kong and Singapore, other Southeast Asian countries, China became the major economic powers driving the global economy.

Now, in the first quarter of the 21st century, the world economy is shifting its centre from the Pacific to a much broader area which is called the Indo-Pacific region. The Pacific continues to play an important role but it is being connected more and more with the emerging economic powers along the Indian Ocean from Southeast Asia to South Asia, and to Africa. And, of course, the Bay of Bengal is centrally located within this tectonic change as it can function as a key junction between the two oceans.

Bangladesh is the linchpin of the Indo-Pacific region and stands to gain a great deal from the shift in global economic dynamism toward the Indian Ocean. The BIG-B initiative seeks to take full advantage of this trend. It has three main pillars. The first pillar is Industry and Trade which consists of a long-awaited deep seaport at Matarbari that will make Bangladesh an important trade gateway to the rest of Asia and beyond. The second pillar is energy which is being developed into a massive supply base of primary energy (coal, LNG and oil).  Transportation is the third pillar of BIG-B. To enable greater industry, trade and energy production the Dhaka-Chattogram-Cox’s Bazar transport artery needs to be strengthened and even extended to the neighbouring countries. More and better national highways and railways are an absolute must to accelerate the movement of goods and people that is essential for a highly vibrant industrial agglomeration.

The Matarbari Port Development Project (MPDP) will be operated by the Chattogram Port Authority (CPA) that faces challenges of strong leadership for the coordination of the Integrated Development Master Plan for the Moheshkhali area, as suggested in the JICA Preparatory Survey. As the deep seaport will be operated by the CPA itself, experts have suggested that the policymakers make the CPA a completely autonomous body as soon as possible. Secondly, the CPA itself should give up its bureaucratic style of management suitable for government officials and move forward to introduce business type management in its day-to-day affairs. The CPA should make further efforts to increase efficiency in its terminal operation because it is a service-oriented organization and involved with a dozen of port user organizations. The entrepreneurs and trade body leaders, however, observed that international berth operators might be employed who have to supply all the required equipment of cargo handling for efficient port operation. The definition of port, for example, Chattogram port, in the Chittagong Port Authority (CPA) Act and regulation have to change. The tender period also has to change from five (5) years to 15 years as the private operators will use their own equipment. Otherwise, the CPA has to create opportunities so that any reputed international berth operator can participate in the tender legally. The Chattogram port alone carries 92 per cent of the country’s trade volume. This absolute dependency of international trade on a single port becomes more complicated. So the government has to take appropriate measures to develop efficiency for the deep seaport.

The JICA, formed in 1974, is currently the world’s largest bilateral development agency, spreading its activities to 152 countries. It plays a great role in the development of the economic infrastructure of the under-developed and developing countries. The works of the Matarbari Port Development Project (MPDP) at the cost of Tk 17,775 crores began on November 16, 2020. The deep seaport will be operational by the end of 2025 or the beginning of 2026 and it will boost trade through the Chattogram port. Earlier, in September 2020, the government-appointed Nippon Koei JV of Japan through a contract, to provide consultancy services for the construction of the deep seaport to handle the country’s growing external trade. The consulting firm is currently working on detailed design, tender assistance and construction supervision for marine and civil works of JICA-funded deep seaport.

The executing authorities of the port are the CPA and the RHD (Roads and Highways Department). Works of the CPA are going on as scheduled but the works on the part of the RHD are reportedly lagging behind the schedule. The government has taken the move to build a transport infrastructure network like roads and railways to link up Matarbari with the mainland of Cox’s Bazar and thus the country. As part of the communication development plan of the south Chattogram region, several new projects including the two-tube Bangabandhu Tunnel under the river Karnaphuli and the Dohazari-Cox’s Bazar-Gundhum railway line up to the Myanmar border are visible now. Access Road under the Coal Power Plant and Cross Border Road under Matarbari Port Development Project will be constructed. Once constructed, the deep seaport will make Bangladesh the centre of trade and business in South Asia, and the gateway to the region as the mother vessels having up to 16-metre water draft accommodating even 8,500 TEUs (twenty-foot equivalent unit) containers will anchor in the port, lessening the country’s dependence on the feeder’s vessels. It will reduce the transportation cost of cargo by 15 per cent. The port will also attract huge foreign direct investment (FDI).  

The neighbouring countries have already developed deep seaports to meet their growing demand for trade and business. Myanmar, Sri Lanka and Pakistan have constructed deep seaports. India has also started the development of deep seaports in the Bay of Bengal. The Bay of Bengal is the littoral part of the Indian Ocean. Again it has joined the South China Sea via the Straits of Malacca. For the economic superpowers of the South China Sea, especially China and Japan, the Bay of Bengal is of high strategic importance. Bangladesh is located at the bosom of the Bay of Bengal, the biggest bay in the world. Not only for its geographical location but its win over the vast delimitation area through international arbitration with Myanmar and India and the blue economy, persistent growth of the economy with seven per cent-plus GDP (gross domestic product) have positioned Bangladesh at an advantage in the region. Matarbari will be connected with the ongoing Dohazari-Cox’s Bazar-Gundhum railway project. The railway will have double gauge lines as projected. The Railway department has conducted research for the Dhaka-Chattogram-Cox’s Bazar Railway Preparatory facility which has planned the Matarbari and Moheshkhali Islands’ railway network extension.

Special attention has been given to the development of river transportation as well. Lighter and feeder vessels will easily transport cargo through river ways from Matarbari to Chattogram, Mongla, Pangaon and other destinations. Generally, a port is connected to different related establishments, such as inland container depots (ICD), inland container terminals (ICT), special economic zones (SEZ), industries and the city through the port’s road, rail and waterways, which is called hinterland connectivity.

The 7th Five-Year Plan of Bangladesh put emphasis on the 3R Strategy: road, rail and river connectivity. Accordingly, the hinterland connectivity of the Matarbari Port will be developed on the 3R Strategy, with a view to establishing the port’s communication with the rest of the country.

Implementation of the economic corridor involving Bangladesh, China, India and Myanmar (BCIM Corridor) could also usher in new opportunities for this sub-region. Policy analysts held the view that it would have an enormous impact on Bangladesh’s overall socio-economic condition. Alongside the BCIM corridor initiative, a plan is also there to establish a maritime “Silk Route” across the Bay of Bengal to link with the countries in the rim of the Bay and the Indian Ocean. Cooperation in power and energy, transport infrastructure, shipping, tourism, trade, business and investment, in particular, will gain momentum in the event of building the economic corridor. India said it believes in an “inclusive” Indo-Pacific and described its connectivity with Bangladesh as a ‘game-changer ensuring a ‘win-win’ situation for both.

Matarbari Island, once a neglected rural area located at the bosom of the Bay of Bengal, is all set to reshape the economic face of the country as a sparkling trading nation. The governments of Bangladesh and Japan jointly identified the Matarbari area, an island of salt and shrimp located about 80-km south of Chattogram city, as the tipping point for carrying out the BIG-B initiative. The island and the surrounding area have all the potential to be completely transformed into an integrated and industrial trading hub, as well as a central energy base. That is the reason why Japan decided to support a national flagship project titled Matarbari Ultra Super Critical Coal-fired Power Project.

Anisuzzaman Chowdhury, programme manager, JICA Bangladesh, said the government had initiated a move to construct a deep seaport at Sonadia of Cox’s Bazar under public-private-partnership (PPP) but it was impossible as the project would not be sustainable and environment-friendly because the area is ecologically critical and would have faced legal obstacles as per Environment Protection Laws 1995. So, steps have been taken to implement the Matarbari deep seaport development project under the Government to Government (G2G) agreement as the Japanese government quickly responded to the move of Prime Minister Sheikh Hasina. The 1200 MW Matarbari Ultra Super Critical Coal-fired Power Plant project will also facilitate procurement of coal from the international market at relatively cheaper prices as compared to the individually purchased coal from foreign countries.

The JICA official said centring the power plant and port development mega projects a comprehensive township in the country’s southeast region is being developed on a huge area comprising Matarbari-Moheshkhali and Ukhia, Teknaf, Chakoria Upazilas of Cox’sBazar and Banskhali and Satkania Upazilas of Chattogram by exploiting the enormous resources lying untapped in the country’s southeast region and the Bay of Bengal. He said industrial water supply shortage in the entire project area and the would-be developed township and special economic zone is the most critical problem. “There will be a huge scarcity of industrial water in Matarbari-Moheshkhali project area as the project operations will need at least two lakh cubic metres of water every single day after the beginning of the commercial operations in the projects by the end of 2025 to feed the industrial network being developed in the special economic zone (SEZ) of BEZA, power plants, deep seaports and concentration of a huge working population, no fewer than five lakh people in employment in the industries as estimated, plus the locality. The condition of groundwater in the project site is in a very bad shape and surface water is the only alternative. The JICA is conducting a survey in the Sangu River, Matamuhury river, Karnaphuli river and Kaptai lake to mitigate the problem,” he said.

The annual export-import volume of the existing ports of Bangladesh is above US$60 billion and more than 4,000 ships call in the port a year. As per statistics, the yearly arrival of ships in the ports increases by 11 per cent. But larger vessels above 9.2 metres draft and 190 metres in length cannot enter the Chattogram port, the prime seaport of the country. Container vessels carrying over 2800 TEUs cannot enter jetties of the port that handles more than 92 per cent of the country’s total export import. The development of a deep seaport as an economic infrastructure has a huge positive impact on the growth and development of the country.

Md Shafiqul Islam, a former secretary of the government of Bangladesh, said, it has become strategically very critical for Bangladesh considering its potential impact on the accelerated development and economic growth of the country. Such a port will allow the country to reap the benefit of connectivity that China’s One Belt One Road (OBOR) initiative offers, he adds.

Although the Matarbari deep seaport is located some 80 km off Chattogram seaport, both the ports will draw benefits from each other by using basic advantages, which will reduce tariff rates for the port users. In the first phase, a 300-meter multipurpose terminal berth and a 460-meter container terminal berth will be developed. In phase-2, the container terminal berth will be extended by additional 1050 meters. In the second stage of the port development project, the multipurpose berth will be extended by 1200 meters and 340 meters feeder berth. It is in this stage that the industrial port will be developed having a 28-km-long four-lane connection road. Construction of the deep seaport, coal jetty and terminal for liquefied natural gas (LNG), four units of 600 MW coal-fired power plants along with communication networks, is underway at Matarbari.

Bangladesh’s first deep seaport in Matarbari will go into commercial operation five years from now, by the beginning of 2026, project officials said. The objective of the Matarbari Port Development Project is to strengthen the port logistics capacity of Bangladesh by constructing a new commercial port and a port connecting the national highway in the Matarbari-Moheshkhali-Chakaria belt. The project was approved at the ECNEC meeting on March 10, 2020.

Nippon Koei JV, which signed a contract for providing consultancy to the project, kicked off consultancy on November 16, 2020. A jetty is being built and the navigation channel being created to facilitate coal unloading from the 1200 MW coal power project. The Power Division signed a memorandum of understanding (MoU) with the Ministry of Shipping on May 5, 2015. The Power Division will be responsible for the implementation and operation of the 1.5-km-long jetty and 250-metre wide channel for the $ 4.0 billion cost power plant.

Project Manager (Civil Works) of the Matarbari Project Development Project Shiful Hassan Chowdhury said the consulting firm is working on a design drawing which will be completed by June this year (2021). As per schedule, the works are on and the tender processing for the development of the port will start in July. On completion of the tender processing by June 2022, construction of the Multipurpose Terminal and Container Terminal will start. Shiful Hassan, also executive engineer of the CPA, said construction of the Multipurpose Terminal will be completed by June 2025 and that of the Container Terminal by December 2025. Meanwhile, the geotechnical survey of the project has been finalized. He hoped the construction of the two terminals would be completed as scheduled – by December 2025.

President of the Chattogram Chamber of Commerce and Industry Mahbubul Alam described the Matarbari deep seaport as a ‘game-changer for Bangladesh’s economy and will ensure a win-win situation for Bangladesh, its close neighbours, South Asia, Southeast Asia and beyond. Once the deep seaport goes into commercial operation it will not only carry goods to our local market but also act as a bridge to the entire region including India’s seven northeastern states, Myanmar, Nepal, Bhutan and even Kunming of China. The Moheshkhali-Kutubdia region and also Chattogram will be the next Singapore of Bangladesh. It will also be the hub of energy, tourism, business, trade and industry. Many countries have expressed their interest in investing in the huge 4,000-acre special economic zone surrounding the deep seaport.

The government is working with the vision and commitment to meeting the growing demand for electricity. In 2013, the government planned to set up 13 coal-fired power plants across the country with 7800 MW generation capacity in the public sector. All these plants will be operated by imported coal. The plants are four 600 MW generation capacity plants in Matarbari (Cox’s Bazar), two 600 MW capacity plants in Khulna, two 600 MW capacity plants in Chattogram, one 600 MW capacity plant in south Chattogram, one 600 MW capacity plant at Meghna Ghat near Dhaka, two 600 MW capacity plants at Mawa near Dhaka and one 600 MW capacity plant at Zajira (Shariatpur). Coal-fired power plants are also under construction in Khulna, Mawa and Chattogram in the private sector. Thirty per cent of power generation is expected from coal-fired power plants.

Chattogram Port, developed near the Karnaphuli river, 16-km upstream of the Bay of Bengal, is a tidal port with an approximate tidal range being between 1.5 meters and 4.5 meters. Pilotage is compulsory, the streaming distance being 16 km from the outer anchorage to the main berths and the average daytime piloting is only five hours a day. The maximum permissible draft of the vessels in the port ranges from 8.5 meters to 9.2 meters and the maximum permissible length of the vessels is 186 meters. For night navigation, the permissible vessel length is further limited to 153 meters. Yet this port is an integral part of the sub-regional transport and logistics chain and plays a vital role in achieving substantial economic growth through facilitating international trade. The rapid growth of international trade necessitated setting up a deep seaport at a suitable place in the Bay of Bengal to handle high-draft larger vessels for transportation of goods directly to different countries in Southeast Asia and beyond.