Importers allege the WTC has monoplised the goods transport at Chattogram port and hiked shipping fares arbitrarily
DHAKA : The Water Transport Cell (WTC), which was formed to operate lighter vessels in a systematic way for the convenience of users, is now a source of trouble for businesses to carry goods from the Chattogram Port’s outer anchorage.
Over the years, the Chattogram Chamber offshoot has emerged as a cartel of vessel owners that took full control of the lighter ship business, hikes fares at its will and makes businesses pay those, businesspeople allege.
Importers, who bring consumer goods and industrial raw materials in bulk, have to wait for its mercy to get schedules to run their own vessels to carry goods from mother vessels.
Some sailors were injured in a last month attack by people favouring the WTC on a lighter ship which did not have a “WTC serial”.
By hiking shipping fares without consulting the stakeholders, the WTC has also contributed to a rise in the cost of doing business, businesspeople further claim, adding that the fare of transporting goods from Chattogram to Dhaka has increased, in some cases, as high as 175% over the last decade.
According to port data, during FY16-FY21 an average of 7.80 crore tonnes of goods were imported every year, of which 70% were unloaded at the outer anchorage and the remaining 30% at the port jetty.
Most of the goods unloaded at the port were transported by ships controlled by the WTC.
In 2018, the WTC transported about 1.45 crore tonnes of goods involving total fares of at least Tk800 crore. In 2019, the organisation transported 27 lakh tonnes more and earned at least Tk1,000 crore in fares. In 2020 – during the Covid-19 pandemic, the transporting fell to 1.28 crore tonnes and the WTC’s earning was around Tk710 crore.
The WTC currently has around 1,300 ships under it while the total number of lighter ships that transport goods from the outer anchorage of Chattogram port on 34 routes across the country stands at around 2,500.
In 2013, when a crisis of lighter ships arose, many industrial groups started to use their own ships for transportation. Right now, around 400 such ships are being used in transporting goods from the port.
Owning and maintaining a lighter ship mean additional costs and hazards for industries including cement and steel-makers as each such vessel costs Tk4 crore to Tk12.5 crore depending on size (1,000-3,000 tonnes capacity), and requires another Tk25 lakh to Tk50 lakh to maintain and operate.
“As they could not give us lighter vessels in time, only the cement industries have invested Tk3,000 crore for buying lighter vessels to carry their own goods,” said Md Shahidullah, first Vice President of the Bangladesh Cement Manufacturers’ Association (BCMA).
But industry owners have alleged that the WTC even wants to control the movement of their ships even though there are widespread allegations of ineptness against the WTC itself.
The masters of many of the ships operated under the WTC are incompetent, say people concerned, adding they do not follow naval signals and regulations which often causes shipwrecks. On top of this, the majority of WTC ships are not insured against accidents. As a result, importers face extreme financial losses.
In many cases, importers have to pay compensation for the waiting mother vessels due to delays in deploying lighter ships. This increases the cost of imports, they said.
“I was a founder of the Water Transport Cell. The purpose of this organisation was to coordinate the transportation of goods from the outer anchorage to the port. But it now wants to control the business of transporting goods on shipping routes,” said Amirul Haque, managing director of Premier Cement Mills Limited.
“As a result, the business is now hostage to 150 businessmen. In the last five years, the WTC has caused a damage of about Tk20,000 crore in shipping goods,” he said.
Abul Bashar Chowdhury, chairman of BSM Group, told The Business Standard, “Our company has 17 lighter ships. There has been a mixed reaction among industry owners over getting their turn. We invested in lighter ships to transport goods from mother vessels. Why do the goods have to be transported on the basis of a WTC serial?”
Monopoly in fixing fares
According to importers, the cost of transporting goods from Chattogram to Dhaka by river was Tk150-180 per tonne a decade ago, which is currently Tk548. However, the fare has been adjusted to Tk415 for the September-December period this year due to Covid-19.
Importers have termed this hike in shipping fares “abnormally high” as the number of ships has increased substantially over the years.
The Department of Shipping has issued a directive to adjust fares of the lighter ship, if needed, in consultation with the BCMA and the leading representatives of the stakeholders.
However, the WTC has never consulted anyone, including traders, while increasing fares, said Mahbubul Alam, president of the Chittagong Chamber of Commerce and Industry.
Recently, the WTC has reduced fares on 30 out of 34 shipping routes from Chattogram port. Of these, the fare of carrying per tonne of goods on the Barishal route has been reduced from Tk574 to Tk390, on Chandpur route from Tk524 to Tk396, Khulna route from Tk807 to Tk715, and on Mongla route from Tk753 to Tk673.
Amirul Haque, managing director of Premier Cement Mills Limited, said, “The WTC has fixed the fare arbitrarily. The cost of doing business is increasing a lot because of this. At the end of the day, the consumers have to pay the price.”
WTC Convener Nurul Haque denied the allegation of controlling the shipping business. He, however, admitted that they “could not fix the fare consulting with all stakeholders because of the pandemic.”
“The carrying cost from Chattogram to Dhaka is now Tk415 per tonne which is still an unreasonably high fare. We demand bringing it down to Tk300,” said Md Shahidullah.
Allegation of beating sailors
There are allegations that some members of the Bangladesh Shipping Workers Federation beat sailors on various shipping routes on behalf of the WTC to establish control on goods transportation.
One such victim is Md Noor Nabi, ship master of MV Anisha-1, who was beaten by WTC men recently. “On 1 September, we were loading cement clinkers from the mother vessel at the outer anchorage of the port. Suddenly, some young people came by speed boats and said we cannot operate without a WTC schedule. They told us to move the ship elsewhere. They attacked as moving the ship was delayed due to high tide. Five sailors including the ship’s Captain Jahangir Alam were injured.”
He added that Jasim Uddin, the master of the MV Amin-2, Md Imam Hossain, master of Sheikh Brothers, and Masum Billah, a sailor, were also beaten over the issue.
Nabi Alam, joint general secretary of the Bangladesh Shipping Workers Federation, acknowledged the beating incident.
“The drive was launched to ensure that all ships run in accordance with WTC schedules. Some people were beaten because they were obstructing our people,” he said.
Nurul Haque, convener of the WTC and also general secretary of the Bangladesh Cargo Vessel Owners Association, said, “According to the decision of the Department of Shipping, only cement companies will be able to transport goods on their own ships. Ships of industrial groups that are not in production should also maintain WTC schedules.”
Conflicting decisions of shipping department
“The WTC was supposed to be monitored by the Department of Shipping but they do not do that. Due to lax monitoring by the DG Shipping, they are doing everything as they wish,” said Md Shahidullah, who is also general secretary of the Bangladesh Steel Manufacturers’ Association.
According to WTC data, until 2009, the Chittagong Chamber of Commerce and Industry (CCCI) was monitoring the management of lighter ships at the outer anchorage of the Chattogram port. At that time, the WTC’s name was “Water Transport Co-ordination Cell” (WTCC).
In 2009, the WTCC came out of the CCCI shadow and then the Bangladesh Cargo Vessel Owners Association (BCVOA) and the Coastal-Ship Owners Association of Bangladesh (Coab) jointly established a new independent platform for the lighter vessel owners in the name of Water Transport Cell. It has around 2,200 members.
In 2013, the government formulated a policy on transporting goods by lighter vessels. According to the policy, 50% of the raw materials imported by cement factories have to be transported by ships under the control of the WTC.
Thus, cement factory owners were obliged to transport imported goods in hired vessels even if they had their own ships, which led to a hue and cry among businesspeople.
Against such a backdrop, CCCI President Mahbubul Alam wrote a letter to the shipping minister, requesting him not to implement the policy.
The CCCI president in his letter mentioned that industry owners built lighter ships of higher capacity on their own initiative to get rid of “abnormal” fare hikes and the “hostage-like situation”, which reduced inland waterway fares to a tolerable level and thus commodity prices remained stable.
After that the enforcement of the policy was put on hold and industry owners could transport goods on their own ships.
At a meeting of the Department of Shipping with representatives of all parties on 29 June 2020 also, it was decided that industry owners would transport goods on their own ships.
But recently on 23 August, the Department of Shipping issued an emergency naval notification, instructing industries to follow the 2013 goods transport policy. This has led to complications.
The circular, signed by Commodore AZM Jalal Uddin, director general of the Department of Shipping, states that all the lighter ships involved in transporting goods in Chattogram port, all types of jetties on both sides of the port and mother vessels should load and unload goods by maintaining the schedule of the Water Transport Cell following the Goods Transport Policy 2013.
When contacted over phone, Commodore AZM Jalal Uddin advised TBS to talk to Md Manjurul Kabir, chief engineer and ship surveyor of the Department of Shipping, in this regard.
Manjurul Islam said they were implementing a policy to restore discipline in goods transportation through waterways. “If any party beats the sailors of any ship while implementing this decision that will be their personal responsibility,” he said.
However, businesspeople said the decision of the Department of Shipping is contradictory and not business friendly.