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People's Republic of Bangladesh Technical Assistance Consultant’s Report Project Number: 46452 October 2017 People’s Republic of Bangladesh: South Asia Subregional Economic Cooperation Railway Connectivity Investment Program (Financed by the Technical Assistance Special Funds) Final Report on Updating Railway Master Plan Prepared by: CPCS Transcom Limited In association with: e.Gen Consultants Ltd. Ottawa, Ontario, Canada This consultant’s report does not necessarily reflect the views of ADB or the Government concerned, and ADB and the Government cannot be held liable for its contents. (For project preparatory technical assistance: All the views expressed herein may not be incorporated into the proposed project’s design.) FINAL REPORT – Railway Master Plan | Bangladesh SASEC RCIP Project CPCS Ref: 15328 Opportunities for Bangladesh Railway Key Messages . Road and bridge projects in Bangladesh will affect the competitiveness of the railway and its ability to attract modal share. There is a new port project at Payra which could supply container traffic to BR. However, the high cost of connection of the railway network to Payra should be studied in detail. BR would do well to become a “Multi‐Modal Logistic Service Provider” on a commercial basis for the bulk commodities market. BR could capture much more of the container market than it currently enjoys. However, substantial infrastructure development would be required. BR’s passenger traffic is limited by rolling stock capacity. In order to increase passenger traffic, BR should first increase RS efficiency and carriage numbers, then focus on infrastructure upgrades. Investment projects for electric traction may be undertaken if the projects become viable in the proposed feasibility studies | 79 FINAL REPORT – Railway Master Plan | Bangladesh SASEC RCIP Project CPCS Ref: 15328 Mega‐Projects 5.1.1 Road Projects Rail was once the dominant transport mode for long‐distance passengers and freight. On the rail network major rivers were spanned by bridges. Most roads crossed rivers on slow and congested ferries. Over the last two decades, many road ferries were replaced by bridges, making road transport much more attractive. Accordingly, rail patronage declined. The nation’s most vital transport corridor links its most important city, Dhaka, with its second city, Chittagong, and only major port. Bridges replaced ferries on this road corridor years ago. The Dhaka‐Chittagong rail line is circuitous, exiting Dhaka in a northbound direction before turning east and eventually heading south to Chittagong. The journey is 30% longer by rail than by road. For this and other reasons most Dhaka‐Chittagong travel is by road. In spite of a large investment to widen the Dhaka‐Chittagong highway it is still extremely congested. Amongst its proposed projects the Public Private Partnership Authority, which resides in the Prime Minister’s Office, lists the Dhaka‐Chittagong Access Controlled Expressway. The project would design, build, finance, operate and maintain a four‐lane access‐controlled expressway between Dhaka and Chittagong on a PPP basis. In 2015, a feasibility study6 analysed five options. The route was evaluated in three sections: Dhaka‐Comilla, Comilla‐Feni and Feni‐Chittagong. The EIRRs were respectively 18.2, 19.7 and 23.8 % pa. The total cost was USD 1.8 billion or BDT 1400 crore. There is political support for the expressway. It would make rail less competitive; rail’s inherent disadvantage is that it is 30% longer than the road route. This would be removed, however, by implementing the Chord Line proposal, first mooted over a decade ago to link south Dhaka to Laksam and found to have 14.4% pa EIRR. Current thinking is to connect the Chord Line to Comilla rather than Laksam. Another major road project is the Padma Bridge, which is under construction with a four‐lane upper deck for road traffic and a lower deck designed for a single‐track railway. It is scheduled for completion at the end of 2018. By eliminating ferries the Padma Bridge will shorten the time taken for road traffic between Dhaka and the south‐west of the country. Current rail passenger services between Khulna and Dhaka travel the long way around, across Bangabandhu Bridge. They will become uncompetitive. If a new rail line is built utilising Padma Bridge, passenger trains will regain their competitiveness. 5.1.2 Port Projects By value, Bangladesh’s predominant sea traffic is container cargo. Almost entirely, this traffic passes through the riverside port of Chittagong. Chittagong currently receives feeders from Singapore. Ten years ago vessel size was 1000 to 2000 TEU. Average turnaround time was 4.8 days and average parcel size about 1000 TEU. Nowadays, parcel size is about 600 TEU, confirming that Chittagong is being served by feeder vessels. 6 Consultancy Services for Feasibility Study and Detailed Design (Package‐I) Under Technical Assistance for Detailed Study and Design of Dhaka‐Chittagong Expressway on PPP Basis (ADB Loan 2856 – BAN) 2016. | 80 FINAL REPORT – Railway Master Plan | Bangladesh SASEC RCIP Project CPCS Ref: 15328 A proposal for a Deep Sea Port in the vicinity of Cox's Bazar was the subject of a prefeasibility study7 of a port at Sonadia Island. In early 2014, developing such a port fueled a flurry of international interest from UAE, China and The Netherlands, and led to the Bangladesh government reportedly “fast tracking” Sonadia Deep Sea Port. Subsequently, proposals developed rapidly and the Sonadia Island location shifted a little northward to Matarbari on Maheshkhali Island where other developments were also being planned (See Figure 5‐1). A large area is planned to become a power generation hub and an Exclusive Economic Zone (EEZ) with the following proposed projects and ancillary enterprises: Coal‐fired power plant under Coal Power Generation Company Bangladesh Limited.8 Petro Chemical complex under the aegis of Kuwait Government and operated by Bangladesh Petroleum Corporation, a statutory body under the Ministry of Power, Energy and Mineral Resources. Deep Sea Port under the Ministry of Shipping. Industrial township. The regional hubs (which are Colombo and Singapore) dictate shipping lines’ decisions on services in the Bay of Bengal. Routing a Myanmar box through Colombo will be cheaper than through Matarbari, for example. It is unrealistic to think of Matarbari as a continental load centre. It would be a feeder port mainly, but calls by some mainline vessels will commence when volumes and parcel sizes increase. A maritime rule of thumb is that a mainline vessel will call at a port if the parcel size (i.e. box exchange, off plus on) is 25% of a vessel's capacity. Thus, an 8000 TEU Post‐Panamax Plus containership will call at Matarbari if the parcel size reaches 2000 TEU. An educated guess is that around 20% of the total TEU throughput at Matarbari would be handled by mainline vessels, primarily on the Bangladesh‐Europe trade. Mainline vessels on this trade are currently 8,000 to 12,000 TEU and make multiple (but few) port calls. A terminal with 15m draft can handle all these vessels. That leaves 80% of the trade being carried by feeder vessels, which are not much disadvantaged by calling at an expanded Chittagong with a draft of 9.4m at the quay. Chittagong has plenty of water frontage available for expansion. The port’s limitation is its tidal draft and river channel width, which lacks clearance for ships to arrive and depart simultaneously. Waiting for the tide is a small penalty, and can be offset by the fuel saved by slow steaming to arrive at the right time. Whether feeder vessels switch from Chittagong to Matarbari would depend on port charges and the cost of hauling containers to/from a port which is a little further from the ultimate origin/destination. No matter what planners plan, what actually happens is decided by shipping lines. And the world’s dominant container line is Maersk. 7 Techno‐Economic Feasibility Study of a Deep Sea Port in Bangladesh, Pacific Consultants International, December 2008. 8 The coal‐fired power plant is planned to generate 1200 MW initially, from 2023, and building to 3000 MW. There is also talk of 3000 MW of LNG‐fuelled power plants in the area. | 81 FINAL REPORT – Railway Master Plan | Bangladesh SASEC RCIP Project CPCS Ref: 15328 Figure 5‐1: Planned layout of development at Matabari including a deep sea port Whether at Sonadia or Matarbari, a regional Deep Sea Port at Matarbari in the vicinity of Cox's Bazar is looking less likely given the government has opted for a new port at Payra. Payra Sea Port Act 2013 set up the Payra Port Authority to develop a port in Patuakhali District on the Rabnabad channel. In the short term, cargoes will be off‐loaded onto lighters from ships | 82 FINAL REPORT – Railway Master Plan | Bangladesh SASEC RCIP Project CPCS Ref: 15328 at anchor and be transported to the hinterland through river routes— such as the little‐used Pangaon ICD designed for water access and which opened in November 2013. Figure 5‐2: Location plan for Payra Port By 2018 a multipurpose berth and a bulk terminal are planned for vessels up to 12m draft. By 2023 the port is to be fully operational with a 16m channel and a container terminal. An exclusive economic zone (EEZ), airport, port city, dockyard/shipyard and eco‐tourism are also planned. The proposal is highly ambitious and very costly. The Authority aspires to become an “economic gateway to South Asia”. If Payra were to develop 4.5km of quayside for containers, as shown on the plan, there would be no need for the Matarbari Deep Sea Port. Whilst Payra has a head start, the costs of development and maintenance dredging are high, so it is still conceivable that Matarbari could overtake Payra as a regional port.
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