PAYRA DEEP-SEA PORT : Dhaka-Beijing deal soon

Dhaka has decided to ink a deal with Beijing to build the Payra deep-sea port after it shelved the much-hyped Sonadia deep-sea port multi-billion project amid oppositions from major countries, including India, over Chinese involvement.
The latest policy direction from the prime minister’s office would pacify China after they were left disgruntled when the government abruptly backtracked from signing a memo in July, last year, on the Sonadia port, a senior official in the PMO said.
The shipping ministry has undertaken a move to amend the Paira Seaport Authority Act, 2013, inserting new provisions in the renamed proposed Payra deep-sea port authority act, 2015, to facilitate building the proposed deep-sea port, according to a decision taken recently in the prime minister’s office.
The policy making meeting, presided over by prime minister Sheikh Hasina, included the deep-sea port in the list of government’s ‘fast track’ projects. The PMO asked the shipping ministry to go ahead and award the contract to a Chinese firm to construct the port, a close source of New Age in the prime minister’s office said.
The shipping ministry is expected to select a Chinese company soon to award the contract to construct the multi-billion dollar infrastructure project of the country.
‘We will soon select one Chinese company for Payra deep-sea port construction among four such state-owned Chinese firms who submitted their proposals,’ shipping minister Shajahan Khan told New Age on Thursday.
The construction work of the deep-sea port will start next year, the minister added.
A senior shipping ministry official said the proposed deal to be signed with a Chinese state-owned firm under a MoU will outline funding options, feasibility study by the company itself and total cost and duration to complete the project.
In second phase, final agreement will be signed specifying cost of fund and rate of interest for low-cost Chinese loans.
Sources at the PMO said since June, last year, the construction of deep-sea port faced uncertainty as major regional and global powers joined hands together to restrict China’s involvement with the project.
The countries opposing the Chinese funded ‘strategic installment’ through the much-talked about deep-sea port, feel threatened of Chinese dominance in the pan-pacific territory in terms of port-related investment, a senior secretary of the government, preferring anonymity, said.
The bureaucracy in the government confirmed that India, Japan and the US equally opposed the move of the government to go further with the Chinese proposal on constructing the port. The trio, however, have so far failed at proposing any alternative financing arrangement, it was learnt.
‘Sonadia deep-sea port is no longer our next target as it involves huge time. We are going forward to construct Payra deep-sea port to become a regional business hub,’ Shajahan said.
While asked, Shajahan rejected the notion of accommodating China with the new deep-sea port after the government had taken a u-turn from awarding contract to a Chinese company to build Sonadia deep-sea port.
‘The perception is not at all true. We opted for Chinese company because they have enough experience on constructing such large infrastructure projects,’ the minister added.
A close source of New Age at the PMO said the Prime Minister was unwilling to proceed with the plan to construct Sonadia deep-sea port, given that India has strong reservations about the particular project and opposition to the involvement of China in it.
‘India is keen to be involved with the construction of Sonadia deep-sea port in every possible capacity,’ the official at the PMO said.
He, however, refused to make any comment on whether India would show its reservation further on engaging China with Payra project.
A senior official in the shipping ministry said Payra would not face similar fate like that of Sonadia as understanding with influential quarters has been completed.
‘Sonadia(deep-sea port) shelved, Payra(deep-sea port) emerged,’ the shipping ministry official said.
After the government had shed the idea to ink the deal with China during the China visit of Hasina in June this year, the PMO initiated a consortium financing model led by China to accommodate other interested countries to construct the mega infrastructure, sources involved in the process said.
The move could not be implemented involving China, United Arab Emirates, India and Germany, sources said, blaming India as a major roadblock.
‘We have India in mind, while we have our interests as well,’ a senior official at the PMO said.
Experts said the country badly needed a deep-sea port as annual trade through its two seaports currently stands at around $60 billion.
China Harbour Engineering Company ltd (CHEC) that was primarily selected by the government last year for a memorandum of understanding to construct Sonadia deep sea port, from which it backtracked later, is likely to be the most favoured company this time for the sea port, sources said.
The other two Chinese firms expressing their intent for the sea port are – Guizhou No.2 power engineering construction company power China Corporation and China railway construction corporation ltd, sources at the PMO and shipping ministry confirmed.
The proposed Payra Seaport stands on the west bank of Rabnabad Channel in Kalapara upazila in Patuakhali.