Shipping deal with Colombo in focus

President Abdul Hamid receives his Sri Lankan counterpart Maithripala Sirisena at the Hazrat Shahjalal International Airport yesterday. The Sri Lanka president is on a three-day state visit here. Photo: PID

Dhaka and Colombo are expected to strike nearly a dozen deals, including one for facilitating the plying of feeder vessels between the two South Asian nations, officials said yesterday.

The deals are to be signed today after the official talks between Prime Minister Sheikh Hasina and Sri Lankan President Maithripala Sirisena, who would be leading their delegations this morning.

President Sirisena arrived yesterday on a three-day state visit.

Presently, 90 percent of Bangladesh's shipping, both exports and imports, is routed through Singapore Port and Kelang Port in Malaysia.

Colombo wants Dhaka to route some of Bangladesh's external shipping through its port, as the island nation's port remains underutilised.

Experts here in Bangladesh gave mixed reaction to the possible shipping deal.

One group said if Bangladesh used Colombo instead of Singapore or Kelang, its lead time and cost for export and import would reduce by 20 to 30 percent. They said Singapore and Kelang had become congested and it took a lot of time to exchange cargo between mother and feeder vessels.

Another group said the deal would not have much benefit for Bangladesh as the routes depended on the shipping lines.

For example, they said Maersk Shipping Line, the largest shipping company in the world, now use Kelang for its mother vessels. It used to use Colombo before.

“It will fully depend on a shipping line…,” said a senior shipping ministry official who was involved in the joint working group of the two countries.

On giving Bangladesh priority in berthing in Colombo, the official said, it was not a big issue as a ship could easily get on-arrival berthing at Colombo port.

“If we can route some of these mother vessels through Colombo port, lead time and cost will reduce,” said Sheikh Mahfuz Hamid, managing director of Gulf Seaways.

He said Bangladesh's export, especially garment and pharmaceuticals, to Sri Lanka would significantly increase, as vessels would be directly moving between the ports of Bangladesh and Sri Lanka.

Mahfuz said a deal on coastal shipping would be more effective for Bangladesh as freight cost would be low.

His company has ships that ply along the coastline of Bangladesh and India.

A shipping ministry official said coastal shipping agreement was under process and that it would not be signed this time around.

Bangladesh High Commissioner in Colombo Riaz Hamidullah told the Sri Lankan newspaper Ceylon Today, "Our thinking is that if we get the right kind of incentives and facilitation, we can ask our exporters and importers, to shift their cargo to a very logical port like Colombo."

“According to him, at this point, 20 percent of Bangladeshi transhipment cargo, particularly bound for the West, is calling on Colombo Port,” the paper said.

The high commissioner also noted that the maritime connectivity would be a game changer.

Officials in Dhaka said the two sides want to make feeder vessel services operational between other seaports of the two countries, like Mongla and Payra in Bangladesh and Trincomalee, Hambantota and Jaffna in Sri Lanka, and even with ports of other countries in the Bay of Bengal region.

Sri Lanka already has a good exposure in shipping logistics and LP Gas business in Bangladesh. Sri Lanka hopes its president's visit would boost its businesses further.

The other treaties expected to be signed today include agreements regarding cooperation in agriculture, education, trade and investment, information and communication technology, promotion and reciprocal protection of investment, reciprocal facilitation of trade and tariff reduction, deals between the two central banks, foreign service institutes, and a treaty between Bangladesh's think-tank BIISS and Sri Lanka's LKIIRSS.

A deal was expected to be signed for cooperation between two standards testing institutions, news agencies, Chittagong BGMEA Fashion Institute and Sri Lanka Textile and Apparel Institute.

Bangladesh's State Minister for Foreign Affairs Md Shahriar Alam has said trade, investment, agriculture, fisheries, coastal shipping, education, information technology and visa-related issues would come up during Sirisena's meeting with Prime Minister Sheikh Hasina around 10:00am today.

He said they were also in talks with Sri Lanka for a free trade agreement. The two-way trade is around $90 million but there was huge potential for expansion, he said.

Officials said since Sri Lanka is a small country with a population of only 20 million, Bangladesh's opportunity to increase export there would be small. Sri Lankan businessmen and entrepreneurs should look to invest in a larger country like Bangladesh.

The Sri Lankan president was given a warm welcome at Hazrat Shahjalal International Airport when President Abdul Hamid received him.

This is Sirisena's first visit to Bangladesh as president.

He paid tribute at National Martyrs Memorial in Savar and Bangabandhu Memorial Museum yesterday.

Foreign Minister AH Mahmood Ali called on him in the evening.

Speaker of Jatiya Sangsad Shirin Sharmin Chaudhury, Health Minister Mohammed Nasim, and Leader of the Opposition Raushan Ershad were expected to call on Sirisena at his Sonargaon Hotel suite today.

The Sri Lankan president would meet Bangladesh President Abdul Hamid at Bangabhaban this evening. President Hamid would also host a state banquet in honour of the visiting president.