The Asian Development Bank (ADB) has backtracked on its plan to provide fund worth Tk 1.0 billion for the development of the Mongla seaport citing environmental reasons, officials said Monday.

After conducting a feasibility study on Mongla seaport and Benapole land port months back, the Manila-based lender had talks with the Ministry of Shipping (MoS) officials relating to its financing of the necessary development works of the two ports.

Of the total amount, Tk 800 million was planned for Mongla port while the rest Tk 400 million for Benapole land port.

Sources told the FE that an ADB delegation recently had met MoS officials and informed them that dredging and other necessary development works to make the port more efficient would be environmentally hazardous for the World Heritage Site, the Sundarbans.

So, the ADB is now not interested to invest in the Mongla port, the delegation members who were also involved with the feasibility study, informed the MoS officials.

A senior MoS official said ADB is now showing interest in funding the development of Beanpole and Burimari land ports. They are likely to provide US$ 13 million for Beanpole port and $ 5.0 million for Burimari port.

With the ADB's funding, necessary development works will be carried out to make the two land ports suitable for regional connectivity, sources said.

Talking to the FE, Ahmed Faruk, project management specialist of the ADB, said a loan may be granted for the development of the Benapole land port. It may be included in the ADB's next year's investment plan.

However, he could not give update relating to the funding for the development of the Mongla port. "ADB officials in Manila are looking after the issue. I can't give you any update. I was only involved in conducting feasibility study," Mr Faruk said.

Joint chief of the MoS Shamsul Karim Bhuiyan told the FE Monday that ADB had submitted a feasibility report to the MoS months back.

"I did not go through the report in detail. I have no idea if ADB has expressed interest to lend money for the Mongla port."

He, however, said there is an ADB proposal to provide fund for the development of the Benapole land port.

India, Nepal and Bhutan have already showed interest to use Bangladesh's Chittagong and Mongla ports to carry out their export and import activities.

Meanwhile, an investment proposal worth $ 750 million by a Singaporean company to develop the Mongla port is lying with the MoS.

Port Evolution Management Limited (Port-Evo), an agent of Singaporean port consultancy firm David Wignall Associates, submitted the proposal to the MoS last year.

The Port-Evo and the Mongla Port Authority have signed a memorandum of understanding (MoU) to submit a proposal for the development of the port.

According to the proposal, the company will carry out necessary dredging to increase depth of rivers nearest to the Mongla port, set up a power plant to supply uninterrupted electricity for port activities, establish terminals, warehouse, cold storage, water treatment plant and an industrial zone in the area.

In return, the company wants to operate and maintain the port for 30 years.

After reviewing the proposal, the MoS asked the Port-Evo to submit a revised and specific proposal for the port's development.

Officials said the government wants to raise the utilisation of Mongla port since a substantial part of the port capacity remains unused every year. The government's move also aims to reduce congestion at the Chittagong port.

Statistics show that the Mongla port has the capacity to handle 6.5 million tonnes of goods and 50,000 TEUs (twenty-foot equivalent units) of containers every year. The port handled some 2.69 million tonnes of goods and 27,000 TEUs of containers during fiscal year 2010-11which were 42 per cent and 54 per cent respectively of the port's capacity.

Financial Express/Bangladesh/ 3rd April 2012