Port of Chattogram: When a Port Becomes a Prey

by Ghulam Suhrawardi

Port of Chattogram: When a Port Becomes a Prey

Terming the ex-Mayors as ‘devourers of the port, recently spoke a painful truth when he said that “they were not the Mayor for the port, but the port was for them.” Shipping Advisor flagged the political stakes of “individual citizens having become devourers of the port,” and reminded us that the port’s facilities are not “an ATM of private businesses and party leaders.”

Chattogram Port is the economic gateway of Bangladesh; it is the bloodline of our economy, and most of the (around 90 per cent) external trade goes through Chattogram Port. Abuse of power associated with Chattogram Port, therefore, is not merely the issue of a specific person or a local matter of Chattogram city; it is a matter of national economic security and global competitiveness of our ports and global trade. It is a matter of public trust. To say that a former mayor is the “devourer of the port” is not an isolated case of political violence or vendetta against a political opponent. The ex-Mayor was not the mayor of the port. Still, the port was for the ex-Mayor and his cronies to increase their illegal power through private extortion from Bangladesh’s premier national asset, the Chattogram Port.

The problem at Chattogram Port is systemic, not episodic

The fact that Chattogram Port is prone to systemic corruption and abuse of power is well established. Port Users, Shipping Agents, Importers, Exporters, Civil Society, and Investigative journalists have pointed to widespread systemic corruption, abuse of power, and financial irregularities at Chattogram Port in the last few decades.

Media reports and independent analyses have estimated that port-related inefficiencies and corruption add millions of dollars in costs to Bangladesh’s trade annually. While estimates of port-related corruption may vary significantly, even the most conservative figures indicate additional logistics costs of a few hundred dollars per container. At millions of TEUs a year, that would amount to hundreds of millions of dollars in economic losses from non-transparent, illegitimate payments by exporters, importers, and consumers.

Systemic bribery is one of the most oft-quoted problems at the Port. Over the last few decades, users have consistently alleged that informal payments are required at various stages of port processes, from vessel berthing and yard allocation to customs clearance and container release. A year-old report also estimated that illegal payments associated with customs clearance alone amount to millions of US dollars every year.

Abuse of power has also been another consistent charge against Port Officials. Several senior government officials with connections to Chattogram Port operations were questioned by the Anti-Corruption Commission (ACC) over the last few years regarding alleged involvement in embezzlement of funds, favoritism in contracts and licensing, and accumulation of illegal wealth. A number of them have since been investigated, but many cases have not yielded results over time, nurturing a public perception of impunity.

Awarding of licenses, handling contracts, and service agreements have been another much-debated area at Chattogram Port over the years. Some licenses issued by Chattogram Port Authority without tender were later revoked following public outcry and intervention from regulatory authorities. Several permits are still revoked from time to time, even after long years of operations, raising questions about the transparency of the process.

Instances of individual customs officials being caught red-handed accepting bribes in exchange for clearing files are also not uncommon. These individual aberrations, however, are a function of the system, which normalizes and institutionalizes such malpractice.

Attempts and Backlash

Efforts have been made in the last few years to reform, bring accountability, and streamline processes at Chattogram Port. Over the past few years, the ACC has filed cases and made repeated inquiries into corruption allegations involving officials from the Chattogram Port and companies associated with them. The industry-led “Say No to Corruption in the Maritime Sector” campaign also sought to build a culture of integrity, transparency, and ethical business practices, with the support of the Maritime Anti-Corruption Network (MACN).

Attempts have also been made to explore collaborations with experienced foreign terminal operators over the last few years. The logic of such collaborations has been that a professionally run terminal (characterized by international benchmarks of operation and performance) would help Bangladesh reduce discretion in the service delivery process and introduce international best practice (resulting in higher productivity and efficiency at the port).

Professional terminals usually also demonstrate higher crane productivity, shorter vessel turnaround times, and more predictable service delivery than unprofessional ports worldwide. This fact is yet to be established in the Bangladeshi context.

Each of the above steps towards bringing more accountability and professionalism into the port processes has met with orchestrated public and political backlash in the last few years, when foreign participation was the question for leasing or outsourcing the operations of Bay Terminal, PCT, and the new Matarbari Deep Sea Port.

The cacophony we hear today over leasing the Bay Terminal or foreign participation in the operations of the PCT or Matarbari is being projected under the guise of national interest, sovereignty, and national control over a national asset, and of alleged fear of foreign domination. Hardly any of these deeply entrenched interests have anything to lose in terms of national interest, but much to lose in terms of their private income-generating machines.

Few can deny that, for decades, many vested interests have operated an open secret of private extortion (rent extraction) from Chattogram Port, with little oversight from government bodies, turning the premier national asset into their private ATM. Each of the above-mentioned reform attempts would (and is projected to) reduce that discretion and adversely impact the private revenues of a powerful interest group.

To protect these powerful vested interests at each step, a whole media ecosystem and army of online content creators with their footloose, free-wheeling media operatives and trolls have been unleashed to build a false narrative of public fear. Motivated by the same hard money that plastered the names of Transparency International Bangladesh activists and foreign investigative reporters on social media echo chambers, professional management is an existential threat to the nation’s economy.

The same vested interests and their political benefactors have time and again fed this system with their open secret of money politics (lobbies and commissions) and dysfunction (unnecessary paperwork) in exchange for allegiance and to insulate themselves from accountability and oversight. The same vested interests have operated with impunity for years, and the watchdogs were as good as missing. Each of the steps mentioned above is an existential threat to their income and business models.

Masking vested interests in patriotic platitudes

Masking vested interests in patriotic platitudes and jingoistic nationalism, arguments are being made that it is our national duty to fight for our economic sovereignty. The same vested interests are being appeased on the question of port modernization, expansion, opening, easing our doing business conditions, or any other reform that would benefit the national economy as a whole.

But slogans and statements cannot measure patriotism; it is measured by vision and action. A port system that sucks blood from our economy, discourages investment in our business environment, increases the cost of doing business, and results in higher freight rates for our exporters cannot be patriotic.

If Bangladesh aspires to be a middle-income, trading, and manufacturing powerhouse, it cannot come at the cost of ports captured by corruption, inefficiency, and false hysteria. Prolonged port-sector reforms with limited implementation and success have been observed in East Asia, the Middle East, South Asia, and even parts of Africa. The common thread was insulating ports from political interference and bringing in professional management.

Shipping Adviser’s comments were therefore much more than plain rhetoric. It was a warning bell, a premonition to act and reclaim our ports from vested interests and fiefdom-building and insulate the national assets from that with professionalism, transparency, and measurable performance metrics.

The author is the Publisher of the South Asia Journal.