Bangladeshi seaports have been making handsome profits over the past ten years although port efficiency remains static.

The port efficiency did not increase, as the proceeds from the profits were not invested for expanding capacity and increasing management competency.

The both regulatory and operational role of port authority offers discretionary power to it to compromise on service quality, the draft of Country Framework Report for Private Participation in Infrastructure said.

The Country Framework Report for Bangladesh was prepared by the World Bank and Public and Private Infrastructure Advisory Facility (PPIAF), a multi-donor technical assistance facility aimed at helping developing countries improve quality of their infrastructure through private participation.

Chittagong and Mongla ports handle about 20 million tonnes of cargo of which 87 per cent is imports. Of the two ports, Chittagong handles over 80 per cent of total sea-borne traffic and 25 per cent of container traffic. By 2017 the container traffic is forecast to increase by 300 per cent. Mongla Port has been earning Tk 200 million per annum on an average over the past ten years, the study said.

Vessels arriving at the outer anchorage wait three to four days before gaining access to berth.

Productivity at the container terminal in Chittagong is about 100 to 105 lifts per berth per day, well below the productivity factors suggested by UNCTAD of 230 lifts per day.

As a result, time for turnaround of ships is high at five to six days instead of the average of one day in more efficient ports, it said.

Although port tariffs have not increased in 15 years, Chittagong Port Authority (CPA) is in good financial condition and can expect continued growth in traffic and revenue because it has a virtual monopoly, the draft titled " Private Solutions for Infrastructure in Bangladesh" found.

Even though the port is not making any financial losses, it still represents a cost to the economy due to high long waiting times and foregone trade opportunities, it noted.

Neither Chittagong Port nor Mongla Port receives any subsidies from the government since they are financially self-sufficient and in a strong cash position. But no major investment in infrastructure and expansion was made to cope with pressure of cargo growth neither in public nor private initiatives, the study observed.

The construction of a container terminal at the New Moorings site inside CPA's premises is yet to be built. The Port Act, 1908 and Port Rules, 1966 do not provide any basis for private participation in seaports.

A court injunction over the $250 million project of Stevedoring Services of America (SSA) for a container terminal at Chittagong has stalled private participation in port infrastructure, the study said.

Another problem is overmanning and lack of management control over the workforce. At present, Chittagong Port has 18,400 people for cargo handling which is five times the number of people should be required for a port with Chittagong's throughput, it said.

Currently, Stevedoring companies are required to recruit their workers from the Dock Workers Management Board (DWMB) at both Chittagong and Mongla ports. To regain management control of the workforce and to support the privatisation of cargo handling operations, the government should replace the present recruiting system with direct hiring from a labour pool, it suggested.

The competitiveness of Bangladeshi exports and imports would decrease if the present problems at ports continue. After the end of the MFA era, an efficient port system will be one of the critical pillars to ensure that Bangladesh retains and eventually increase its export competitiveness, the study noted.

For betterment of the situation, the study recommended giving more financial freedom and autonomy to Chittagong Port and Mongla Port.