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Improving Logistics in Dhaka-Chittagong Corridor Can Raise GDP by 1%

Dhaka, Bangladesh, 5 March 2007

Bangladesh can raise its GDP by 1% and foreign trade by 20% if the inland water, rail, and road transport logistics systems in the Dhaka-Chittagong corridor are made efficient and competitive in the global perspective, according to a draft consulting report presented to a stakeholders' workshop at the Asian Development Bank (ADB), Bangladesh Resident Mission on 4 March.

The workshop was participated by a wide range of public and private sector stakeholders involved in transports and logistics in Bangladesh. Conducted under an ADB-funded Technical Assistance titled Improving the Efficiency of Transport Logistics in Dhaka-Chittagong Corridor, the study analyzed the transport logistics systems in the corridor from viewpoint of shippers, importers and exporters.

The share of freight traffic in the corridor currently favors road, but rail and waterway transports may be cheaper and more energy efficient, according to the draft report prepared by the USA-based Nathan Associates. A balance of the modes should be developed to realize the potentials of all the modes.

The study observed that overall informal payments and other inefficiencies add up to 40% to transport logistics costs for imports, significantly impacting on international trade. The rail and road links from the port to Dhaka is high priced compared to international standards, the report revealed.

The key recommendations of the study include streamlining export-import documentation and procedures, improving port operations, establishing more ICDs in the Dhaka areas through private sector, completing the 4-laning of the Dhaka-Chittagong highway, double-tracking of the existing single railway lines, and improving railway management.

Stakeholders suggested that a policy decision is needed to take all the container handling activities, other than loading and unloading on vessels, outside the port, complete the information links from port to shippers and freight forwarders, and encouraging the private sector to build ICD capacity and related infrastructure on both ends of the corridor.

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