In a big leap forward, the Payra Port Authority (PPA) yesterday signed a deal with a Belgium-based company to start capital dredging of the port's main channel Rabnabad to facilitate entries of large ships that cannot berth now at the Chattogram and Mongla ports.

Payra Port: Deal Signed For Dredging With Belgian Firm

News Source: ,

In a big leap forward, the Payra Port Authority (PPA) yesterday signed a deal with a Belgium-based company to start capital dredging of the port’s main channel Rabnabad to facilitate entries of large ships that cannot berth now at the Chattogram and Mongla ports.

Vessels with a draught of up to 12 meters will be able to anchor at the seaport at high tide once the dredging is completed.

Moreover, as many as 20 million metric tonnes of coal to be shipped from abroad can be supplied every year to the coal-based thermal power plant at Payra from this port.

The dredging of the 75 kilometers long and 100 to 125 meters wide channel is expected to begin in the next six months. The estimated cost is Tk. 8,643 Crore (€864.32 million).

M Jahangir Alam, chairman of the PPA, and David Jonckheere, chairman of Belgium-based firm Jan De Nul, signed a public-private partnership (PPP) agreement at the shipping ministry conference room at the secretariat.

In addition to the capital dredging, the Belgian company will be responsible for maintenance of the Rabnabad channel for 12 years.

Earlier in December 2017, the PPA and Jan De Nul formed a joint venture company, of which PPA has a share of 51 percent and the Belgium-based company has the rest.

In addition, a 20-foot long and 40,000 deadweight tonnage of bulk carrier will be able to head straight into the jetty of the port.

The width of the channel will increase to 14.5 meters in future for turning the Payra into a deep sea port, officials said.

It will take 14 months for the engineering survey of the project and the capital dredging 14 more months. It will also take six months for the primary maintenance dredging and 9.2 years for maintenance dredging.

The Chittagong and Mongla seaports continue to face challenges in handling a growing volume of containers and cargos due to rising exports and imports.

The completion of dredging will help ease the pressure of the two ports, according to officials.

Sitting on the west bank of Rabnabad channel at the confluence of Galachipa-Tetulia river, the Payra port started operation in August 2016 with ship-to-ship cargo transfer on a limited scale.

The two existing seaports in Chattogram and Mongla continue to face challenges in handling the growing volume of containers and cargos due to rising exports and imports. The two-handled about 20 lakh Twenty-Foot Equivalent Units (TEUs) of containers in 2015.

The number of containers is expected to rise to 1.26 crore TUEs by 2045, said the PPA official.

The Chattogram port, the country’s biggest seaport, can now allow entry of ships with draughts of up to 9.5 meters at high tide, while vessels with draughts of up to 7-8 meters can enter the Mongla port.

Of the 19 components of the Payra port project, capital dredging is in the lead. As per a government estimate, the development of all the components will require $16 billion (Tk 125,000 crore).

The completion of dredging will speed up the development of other components such as the establishment of a bulk terminal to handle coal, a container terminal, and oil and LNG terminals, according to the PPA.

Of the total cost, Payra Dredging Company will take a loan from HSBC and its consortium banks, with the help of Belgium Export Credit Agency Credendo, to implement the project, a PPA statement said.

It also said the PPA will pay back the project money in 20 equal half-yearly installments on completion of the initial maintenance dredging (approximately 46 months after the signing of the contract).

Shipping ministry officials said the PPA will have to pay back interests and service charges of around €1,000 million including the principal loan.

According to the PPA statement, under the project capital and maintenance dredging work will be completed by 36 months to facilitate up to 10.5 drafts of 40,000 metric tons of deadweight (DWT) bulk carriers.

It said up to a maximum of the 10.5-meter deep channel will be created followed by six months of initial maintenance dredging. Then both the parties will find sources of funding for maintenance of the remaining years of the contract and the project company will continue dredging during that period subject to availability of funding.

The project will be implemented in 34 months in three steps. In the first step (14 months), the actual amount of siltation in the channel will be determined.

In the second step, the main capital dredging work of inner and outer channels will be completed with the help of 11 dredgers in the next 14 months.

In the third step, initial maintenance dredging will be done by the project company in the channel for 6 months.

Approximately 111.399 million cubic meters of dredging material will be removed during the capital dredging and approximately 152.399 million cubic meters including initial maintenance dredging, the PPA statement said.

The PPA also said a maximum of up to 12-meter draft vessels will be able to come alongside the port jetty with the help of the tide.

Annually, 20 million metric tons of coal can be handled directly from the port jetty, which will fulfill the demanded power generation in the western part of the country at lower transportation cost.

Container ships of 3,000 TEUs and the bulk cargoes of 40,000 tons can come directly to the port jetty.

According to the government plan, construction of five coal-based thermal power plants and an LNG terminal are under construction in adjacent areas of Payra Port. These power plants will be able to produce about 9000 MWs of electricity. Twenty million metric tonnes of coal will be imported every year for the said purpose.

In August 2016, Prime Minister Sheikh Hasina formally inaugurated the operational activities of Payra port, which is a priority project of the government.