BANGLADESH: CHINESE PORT BUILDING PICKING UP?


BANGLADESH: CHINESE PORT BUILDING PICKING UP?

Sonadia-island-of-Bangladesh-Deep-Sea-portDr Joyeeta Bhattacharjee

Analysis

Media in Bangladesh recently reported that China is all set to win the contract of the coveted deep-sea port in Sonadia, a small town of 9 sqkm offshore of Cox’s Bazaar in Chittagong division. A memorandum of understanding (MOU) will be signed during Prime Minister Sheikh Hasina’s visit to China starting from 6 June. This should alert India, which would be closely monitoring the developments.

According to reports, the State-owned China Harbour Engineering Company Ltd (CHEC) will construct the port. A major portion of the project will be financed by the Chinese government. The project has three phases. Phase 1 will cater to the shipping demands till 2020, Phase 2 till 2030, and Phase 3 till 2055. Initially, the CHEC will construct the Phase 1. The major task of the company will be engineering (including detailed investigation and design), procurement, construction and operation.

The construction of Sonadia deep-sea port was conceived in 2006 to reduce the burden of Chittagong, the country’s major port, which has already exceeded its capacity. Given steady economic growth of the country, Chittagong is unable to handle the traffic, so the country needs an alternative seaport.

Another rationale has been the country’s desire to become a major economic hub. Bangladesh believes a sea-port could very well fulfil this objective since it is geographically located in a place which could give sea access to regions like China’s Yunnan Province, India’s land-locked seven north-eastern States, Nepal and Bhutan. Trade in these areas are greatly hampered owing to their distance to the sea. A new port would cater to these regions and would also benefit Bangladesh economically.

Why Chinese interest?

getimageCountries including China, India, the Netherlands, the UAE and Denmark had expressed an interest in the construction of the new port. Considering the interest expressed by important countries, initially the Bangladesh government was apprehensive about giving contract to one single country. It thought of forming a multi-national consortium comprising all the interested countries for construction of the port and government would fund the project. It was the lucrative Chinese financial offer that the Bangladesh government could hardly overlook, and this encouraged it to change the decision. For a least develop country like Bangladesh, self-funding of the port would have added additional financial burden.

imagesAnother eligibility criterion for China might have been its recent initiative in port building in various countries. Of late, China has shown a keen interest in construction or maintenance of ports in various countries in South Asia. China has taken over the management of the Gwadar port in Pakistan, built the Hambantota port in Sri Lanka and has also expressed an interest in Maldives. Chinese motivation for constructing ports at these strategic points is mainly to secure its energy supplies, passing mostly through these major points.

The Chinese interest for the construction of a deep-sea port in Bangladesh is opening sea access for its land-locked Yunan Province. Sonadia is located around 1000 km from Yunan. At present, the nearest sea port to Yunan is almost 1800 kmaway from the province. The port in Bangladesh will not only reduce the distance by 800 km, but it will also reduce its distance to Europe a major export-destination for Chinese products.

Concerns in India

im052The strategic community in India has expressed apprehensions. They feel that the Chinese interest in port-construction in Bangladesh is part of its policy of encirclement to establish its supremacy in the region. Also, fears are being expressed at Sonadia port being used by the Chinese Navy, it becoming a permanent headache for the Indian defence establishment as it is very closely located to many of the India’s strategic installations. Only time can tell about the extent of probability of such fears.

There is still some hope that Bangladesh will take note of the apprehensions expressed by India and show maturity in dealing with these issues. The port in Bangladesh should purely be an economic venture, which would add to the peace and prosperity of the region.

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The writer is a Research Assistant at Observer Research Foundation, Kolkatta
AUGUST 24, 2014

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This entry was posted in CHALLENGES, CURRENT ISSUES, DEFENCE & SECURITY, ECONOMY, FOREIGN RELATIONS & POLICY, GROWTH & TARGET, INDUSTRIES, REGIONAL COOPERATION, Regional Policy, STRATEGY & POLICY and tagged , . Bookmark the permalink.

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