November 29, 2022
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The Economic Impact of Matarbari Deep Seaport

The Economy of Matarbari Deep Seaport

Bangladesh’s first deep sea port is being constructed at Matarbari, Dhalghata, Maheshkhali Upazila, Cox’s Bazar, which is the tourism capital of Bangladesh. During low tides, the Karnaphuli River cannot be used as a path for mother vessels to reach Chittagong Port, the country’s main seaport. Due to this, Bangladesh is carrying out export-import activities by using feeder’s vessels. However, the cost also increases in addition to taking extra time to move products. Meanwhile, the cargo handling volume of significant seaports in the country is increasing every year. In the future, Matarbari deep sea port will be constructed to reduce the additional pressure of container handling on Chittagong port and boost export-import by lowering the cost of container handling. A thermal power plant and economic zone are also being constructed next to the project. Due to which, apart from reducing the pressure on existing ports, Matarbari deep sea port will play a significant role in the country’s economy in many other ways.

Overview

The construction of the Matarbari coal-fired power plant, was initiated in 2018 with JICA’s assistance at Dhalghata in Maheshkhali Upazila of Cox’s Bazar. Initially, the plan was to build a jetty to bring coal to the nearest coal-based power plant. While JICA submitted the feasibility test report for the jetty, they saw that the sea depth in Matarbari is 15.5 meters which extends to 30 meters in little further distance, which is the perfect depth for a deep sea port. It was from there that JICA suggested Matarbari for the construction of the country’s first deep-sea port. Before this, Sonadia Island was considered for the construction of a deep sea port as suggested by China, but later it was planned to build a deep sea port at Payara in Patuakhali. But even there, the project was stalled because dredging the 70 km area of ​​the channel would cost a lot of money every year.

Matarbari deep sea port is one of the most important projects among the ongoing mega projects of Bangladesh. Two jetties are being constructed in this deep sea port, one of which will be a 460-meter long container jetty, and the other will be a 300-meter long multipurpose or bulk jetty, where all types of goods can be moved. The Matarbari Deep Sea Port Development Project started on 16th November 2020 and was funded by JICA. The construction cost of the Matarbari deep sea port project is estimated at 17,777 crore BDT, of which JICA is funding 12,892 crore BDT, Chittagong Port Authority’s own funds 2,213 crore BDT, and the Bangladesh government is funding 2,671 crore BDT. Meanwhile, the Chittagong Port Authority has successfully completed the acquisition of a total of 283.27 acres of land to implement this entire project. In the first phase of the project, a 300-meter multipurpose jetty with a 29.15-acre backyard and a 460-meter container jetty with a 50-acre backyard are being constructed. Besides, a channel of 350 meters in length will be constructed for access to the port, out of which 250 meters will be constructed for the coal jetty of Matarbari Coal Based Power Plant, and the remaining 100 meters will be constructed for Matarbari Port. According to a CPA report, it may take up to June 2025 to complete the work of the port.

Matarbari Project Phase 1 Stage 1
Matarbari Project Phase 1 Stage 1
Matarbari Project Phase 1 Stage 1
Matarbari Project Phase 1 Stage 1

In the second chapter of the first phase, the port’s turning basin will be further extended to the south, and three full container jetties totaling 1,050 meters with a 123.55 acre backyard will be constructed. The additional portion of the port will be used for truck parking, and warehouse construction, logistics park, and accessory services. Moreover, the second phase of the Matarbari deep sea port is recommended to be done along the Kohelia river where three container jetties of total 1050 meters with 131-acre backyard are proposed to be constructed on the west side of the deep sea port. Besides, the access channel depth and basin depth of this section will be kept at 16 meters. Meanwhile, 250 meters of channel excavation work for three jetties has been completed under the Matarbari Coal-Based Power Plant project. Besides, the construction of a 2500-meter-long sedimentation mitigation dyke has also been completed under the supervision of Coal Power Generation Company Bangladesh Limited to calm the sea water inside the channel and keep it free from sedimentation. Meanwhile, CPGCBL has already constructed another breakwater of 2500 meters for the power plant. However, for Matarbari deep sea port, another 397 meter long breakwater is required, which will also be completed under the CPGCBL project. The project authorities expect that the work of this port will be completed by approximately 2026. Once the Matarbari deep-sea port project is completed, ships or mother vessels with a maximum 8000 to 10000 TEU container capacity of 16 meters draft will be able to dock here easily.

Matarbari Project Phase 1 Stage 2
Matarbari Project Phase 1 Stage 2
Matarbari Project Phase 1 Stage 2
Matarbari Project Phase 1 Stage 2

Economic Impact

Along with the constant increase in Bangladesh’s import and export by sea, the container handling capacity in the country’s seaports is also increasing rapidly. Every year, ship arrivals in Bangladesh increase by more than 11 percent. On the other hand, the sea ports of Bangladesh handle about 33 lakh TEU containers annually, of which Chittagong port alone handled about 32 lakh TEU containers in the fiscal year 2021-22. Currently Chittagong and Mongla ports have an annual container handling capacity of 40 lakh TEU and 2 lakh TEU respectively. According to the CPA report, the annual container handling volume in the country will reach 140 lakh (14 million TEUs) by 2041. As a result, Matarbari Deep Sea Port will play a significant role in reducing excess pressure on Chittagong (98%) and Mongla (2%) ports to keep pace with Bangladesh’s growing trade. On completion of the project, Matarbari Deep Sea Port’s container terminal will have an annual capacity of 6 lakh to 11 lakh TEUs in 2026, which will reach 14 lakh to 42 lakh TEUs by 2041. Besides, according to JICA’s study, the Matarbari terminal will save $131 per 20-foot container and about $200 per 40-foot container.

Currently, Bangladesh is using deep sea ports of India, Sri Lanka, and Singapore to export goods from the country or import goods into the country. Because Bangladesh does not have any deep sea ports, no mother vessel can enter the Bangladeshi seaports. Therefore, feeder’s vessels are required to take cargo from the Bangladeshi ports to the deep sea port of the mentioned country and to load cargo on the mother vessel. Then on returning, the feeder’s vessels are then required to carry the imported cargo. Due to the distance, transporting goods to or from these ports increases in cost and time. After the Matarbari deep sea port becomes operational, since the mother vessels will be able to come directly to this port, the cost of transportation of goods by sea will be reduced by about 15 percent. And, as the time will also decrease along with the cost reduction, the export-oriented manufacturers of the country will also be able to enjoy the benefits.

However, the inland connectivity of the entire country with this port is a key issue. To address this issue, Bangladesh Roads and Highways Department is building a 20.65 km long road from Fansiakhali on Dhaka Chittagong highway through the Badarkhali market of Chakaria upazila to Matarbari deep sea port in Maheshkhali upazila. In addition, a total of 17 medium and long bridges will be constructed on this new road, and road elevations and embankments will be constructed keeping in mind the cyclones and floods in the project area. By doing this, all the goods coming to Matarbari sea port will be able to easily reach Dhaka Chittagong highway using this new road, and transportation of goods to different regions of the country will be possible in a very easy and short time. Apart from the roadway, the Matarbari sea port will also be connected to the Dohazari-Cox’s Bazar railway project, which is currently funded by ADB. According to the port project plan, a dual-gauge railway route will be built on this route, and the Dhaka-Chattagram-Cox’s Bazar Rail Project Preparatory Facility study by the Ministry of Railways also mentions plans to expand the Dohazari-Cox’s Bazar railway network to Maheshkhali Island. As a result, goods can be easily transported from Matarbari port to different parts of the country by road as well as by rail. In addition, Bangladesh is a riverine country, and there are hundreds of rivers throughout the country. By using these waterways, it will be possible to deliver goods from Matarbari to Pangaon port in Narayanganj and other seaports within the country at low cost through small feeder vessels.

Separate terminals and jetties are being constructed at Matarbari port for importing coal, LNG, cement, steel and metal products and scrap metal. Through the Coal Transmission Terminal or CTT of Matarbari port, 9 million tons of coal can be imported annually in 2026, 14 million tons by 2031 and 41 million tons by 2041. Besides, in 2026, the most of 4,700 mmcf/D (million cubic feet per day) LNG can be imported through Matarbari port’s FSRU terminal. A Single Point Mooring (SPM) terminal is being constructed in the outer anchoring area of ​​the port through which crude oil can be imported by large tankers. Besides, ongoing infrastructure projects in the country require large quantities of cement clinker, which fully depends on import. In 2018, 24 million tons of cement clinker were imported through the Chittagong sea port, and by 2041, cement clinker imports will increase to about 65 million tons. Moreover, imports of steel products and scrap iron will reach 9.9 million tonnes by 2026, which is likely to increase to 17.8 million tonnes by 2041. On the other hand, like fertilizers, cereals, sugar, and wheat, imports of food grains are also increasing every year. Matarbari deep sea port is expected to play a significant role in the import of these products if operational.

In addition to the direct impact of the Matarbari deep sea port on the economy of Bangladesh, there are several indirect impacts. Maheshkhali Economic Zone is already being constructed on 3500 acres of land at Dhalghata, just 4 km from Matarbari seaport. When this economic zone will become operational, many local and foreign companies will establish their production and manufacturing businesses here. Due to which, a lot of new employment will be created. Besides, being so close to Matarbari sea port, it will be possible to easily import production or manufacturing related materials in Maheshkhali Economic Zone. By using Matarbari Port, the products manufactured in this economic zone will also be able to be exported abroad and transferred to other parts of the country. Which will greatly reduce the time of transportation and export of goods. Besides, neighboring countries like India, Nepal, Bhutan, Myanmar, Indonesia and China will also get the opportunity to use this seaport. India already has 23 land ports with Bangladesh, of which 11 are currently operational. If India wants, the cargo ships can unload the cargo at Matarbari port and from there, the cargo can easily be on the way to India using the nearest land port in less time. Apart from India, along with Myanmar, Bangladesh has a land port with Myanmar at Teknaf, the southernmost area which is only 108 to 110 km from Matarbari. Using this, Myanmar and even China can complete their export import. This will open the door to huge revenue for Bangladesh from transit duty. As a result, the country’s economy is expected to be more prosperous and strong. Besides, the Matarbari deep sea port will make Bangladesh a shipping hub.