Terminal operators lining up for Bay Terminal, AD Ports signs MoU

Update (16 May 2024):

AD Ports Group today announced the signing of a MoU with the Chittagong Port Authority for the development and operation of the Multi-Purpose Terminal in Chittagong Port and other ancillary opportunities in Bangladesh.

Rear Admiral Mohammad Sohail, Chairman of Chittagong Port Authority, said: “The Multi-Purpose Terminal in Chittagong is a priority for the Government of Bangladesh. It will be a game changer for the regional economy in general and Bangladesh’s economy in particular.”

“We are pleased to collaborate with AD Ports Group on the development of this vital project, leveraging their expertise and capabilities as a global trade and logistics player,” Sohail added.

“We hope that this MoU will pave the way for further cooperation that will attract more foreign direct investments to Bangladesh,” Mohammad Sohail concluded.

Previously reported (9 May 2024):

The long-delayed Bay Terminal at the Port of Chattogram in Bangladesh, which is expected to increase the port’s capacity by 3M TEU per annum spread over four terminals, is now moving forward at a faster pace.

Since the project was first proposed Bangladesh has warmed to allowing foreign investment in its ports, with as much as US$11.5 billion in foreign investment said to be targeted for the Bay Terminal. The latest figure is that foreign and local conglomerates are coming forward with plans worth US$8 billion.

In the latest development the AD Ports Group is said to be ready to invest $1 billion in the multipurpose terminal at the Bay Terminal project. A four-member delegation of the Dubai based port developer is scheduled to visit Bangladesh on May 13 to discuss the investment proposal.

After extensive discussions with the Chittagong Port Authority (CPA), AD Ports Group officials are expected sign an investment deal on May 16, according to CPA spokesperson Omar Faruk.

Faruk said AD Ports Group will invest in the multipurpose terminal on a build own and operate basis, with the terminal reverting to the CPA after a certain number of years. Alternatively, CPA may partner with the AD Ports Group to operate the terminal.

The Bay Terminal will be built along the Halishahar coast, with a maximum draft of 12m to accommodate 5,000 TEU vessels up 300m long. The other three terminals at the port are two container facilities and one liquid bulk terminal. PSA Singapore and DP World are planning to invest around US$1.5 billion each in the two container terminals, with East Coast Group and its foreign partners investing US$3.5 billion in the liquids facility for oil and gas.

Following studies that began in 2022, the International Finance Corporation of the World Bank is providing US$500M to dredge the main navigational channel build a breakwater. On the landside, Bay Terminal will extend over 2,500 acres of land, of which the CPA now controls 567 acres, with further acquisitions underway.

CPA chairman Rear Admiral Mohammad Sohail said the Bay Terminal master plan is ready while detailed drawings and design work are soon to be completed. He expects construction work on the main terminal area to be started later this year, with almost all of the investment coming from abroad. “We are now starting port operations on the landlord system,” he added.

Although the CPA is highly optimistic foreign investment will now flow into its port, it remains to be seen whether Bangladesh has implemented reforms to address issues that investors have previously identified as obstacles. These include taxation reform and modernisation of corporate law and the wider legal system.