The process of handing over Chattogram Port’s New Mooring Container Terminal (NCT) to DP World on a long-term basis has formally resumed. The initiative has gained a new dimension following the Dubai-based port operator’s demand for a 30-year concession period, despite the fact that the financial framework used in previous discussions had been prepared on the basis of a 15-year term. The Chittagong Port Authority (CPA) has meanwhile formed a 12-member special support team to assist the main negotiation committee.
Preparatory discussions regarding the NCT lease process are currently underway, according to reliable sources at the shipping ministry. The objective of this phase is to finalise the necessary groundwork and planning before the start of formal negotiations. Under the current plan, substantive negotiations with DP World are scheduled to begin on Wednesday.
As discussions on the matter have continued for an extended period without reaching a resolution, pressure was at one stage placed on the CPA to arrive at a final decision. Despite initiating the process during the tenure of the previous Awami League government and later remaining suspended, the issue resurfaced in the current political context. In particular, DP World once again raised the matter of operating NCT during a platform meeting held in Dubai on April 8.
Speaking to Bonik Barta on condition of anonymity, a senior official of the shipping ministry said, “Negotiations between DP World and the previous evaluation committee had almost been completed. That committee had also reached a clear observation on the matter. But speculation has emerged over whether the observations of the previous committee will be taken into consideration in the ongoing discussions with the new evaluation committee.”
When contacted for comment, CPA Acting Secretary Md Nasir Uddin told Bonik Barta, “A 12-member support team has been formed. The support team, comprising experienced officials from various departments of the port, will supply the negotiation committee with the necessary technical, operational, financial, and administrative information, data and recommendations.”
He added, “Chittagong Dry Dock Limited, an institution under the Bangladesh Navy, is currently operating NCT. As for who will operate the terminal in the future, the government will undoubtedly make that decision by giving the highest priority to the national interest.”
“International-standard operators are engaged in port management because increasing terminal capacity, reducing vessel turnaround time, and improving supply chain efficiency are critically important for the national economy. In the case of leasing NCT or appointing an operator, the government will always make decisions by prioritising the country’s interests and its people,” he further said.
According to DP World’s bid proposal obtained by Bonik Barta, the concessionaire would be required to pay an upfront fee of $50 million. A tiered royalty structure has also been proposed based on the average revenue earned per TEU (Twenty-foot Equivalent Unit) container.
Under the proposed framework, the royalty for the lowest slab, where average revenue is less than $105 per TEU, has been set at $42.50 per TEU. For the highest slab, where average revenue reaches $210 or more per TEU, the royalty rises to $141.50 per TEU. Between these two extremes, the royalty increases progressively as average revenue rises in increments of $5.
DP World has proposed a revenue-sharing model based on multiple tariff slabs, according to an analysis of port documents. But under the financial terms of the approved Request for Proposal (RFP), bidders were expected to submit proposals based on a fixed revenue amount per TEU.
The revenue-sharing model poses significant risks for the port, as its earnings would decline substantially if the operator’s performance falls short of expectations. Under DP World’s proposal, the minimum revenue guarantee is $52 million. By comparison, according to the port’s calculations, current revenue stands at approximately $145.74 million.
In similar public-private partnership (PPP) projects, such as the Laldia Container Terminal and the Patenga Container Terminal, a fixed-revenue-per-TEU model has been adopted. The Transaction Structure Report, prepared on the basis of long-term studies, also recommended a fixed-revenue-per-TEU model. The approved RFP likewise stipulated a fixed revenue requirement per TEU.
CPA’s latest evaluation committee conducted a financial assessment of DP World’s proposal. Documents from the shipping ministry containing the financial analysis show that the committee expressed serious concerns regarding the impact of DP World’s proposed royalty structure on the port’s net earnings.
The bidder has proposed a tiered revenue-sharing mechanism linked to the actual tariff realised or the gross revenue generated per TEU, according to the evaluation committee. While this structure aligns the port’s earnings with the terminal’s operational performance, it also introduces risks of lower revenue as well as complexities in verifying the reported earnings.
The analysis observed that, according to the CPA financial model, the variable cost per TEU stands at $16.39, while fixed administrative and operational costs amount to $41.32 per TEU.
A key finding of the analysis is that these fixed administrative and operational costs are non-negotiable and must be borne by the CPA regardless of who operates the terminal. Whether the terminal is managed directly by the port authority or by an International Terminal Operator (ITO), these costs remain unchanged.
The analysis further states that after deducting these mandatory expenses from the ITO-proposed revenue share per TEU, the port would be left with only a negligible net return. This situation raises serious concerns regarding the financial sustainability and overall viability of the proposed agreement.
According to the revenue trends, the gross revenue per TEU stood at $161.82 in December 2025. But the average revenue from container-handling operations (excluding vessel-related revenue) during the five months from December to April was $152 per TEU.
Of this amount, approximately 35 percent of the revenue came from storage rent charges resulting from containers remaining in the port for extended periods, which can amount to as much as $40 per TEU.
But if Full Container Load (FCL) containers are no longer unstuffed within the port premises, storage rent and additional movement charges would decline. The port’s gross revenue per TEU would consequently fall from the current $161.82 to approximately $120.
Under the ITO-submitted proposal, if gross revenue amounts to $120 per TEU, DP World would share $58.50 per TEU with the port authority. But from this amount, the port would still have to absorb the fixed administrative cost of $41.32 per TEU. Consequently, the CPA would be left with a net margin of only $17.18 per TEU, a level that the analysis suggests is not commercially sustainable.
By contrast, if the CPA continues to operate NCT itself and earns a gross revenue of $120 per TEU, then after deducting $13.63 per TEU in variable operating costs and $41.32 per TEU in fixed administrative costs, the port authority would still retain a net margin of $65.25 per TEU.
The analysis shows that if the CPA continues to operate the NCT on its own, it would be significantly more profitable. The ITO-proposed revenue share is almost equivalent to the port’s own net margin and is insufficient even to cover the CPA’s fixed administrative costs. Consequently, the analysis concludes that DP World’s proposed revenue-sharing structure is neither financially favourable nor commercially sustainable for the CPA.
While CPA can monitor its own operations and revenue streams since it is not based on a fixed revenue-per-TEU model, observing the concessionaire’s actual revenue generation would be extremely difficult and complex, the report further notes. This would require highly specialised expertise and additional oversight mechanisms from the port authority. The CPA would consequently face substantial risks in evaluating actual revenue figures under the proposed arrangement.
The port authority approved a revised estimate based on a revenue-sharing model per TEU, prepared by the port’s financial adviser, on February 1 of last year. According to the revised report, the minimum concession fee was set at $94.96 per TEU, which is $4.58 lower than the previously estimated $99.54 per TEU.
The adjustment resulted from a reassessment of the expected Return on Investment (ROI) applied to the proposed $50 million upfront fee. Under the revised calculation, the assumed ROI was increased from 3 percent to 12 percent.
During discussions, it was observed that the upfront fee would be received in US dollars, while investment opportunities for such funds remain limited and prevailing fixed-deposit rates offer a maximum annual return of only around 3 percent.
Based on detailed discussions and analysis, the committee found that some components of the proposal are consistent with the Request for Proposal (RFP) and the draft concession agreement, while others are not.
The committee recommended that the proposals found to be consistent with the RFP and the draft concession agreement be considered implementable. As for the provisions that are not aligned with the RFP and the draft concession agreement, the committee recommended that they be submitted to the appropriate higher authorities for further review and decision-making.
Stakeholders in the port sector say that the proposal to appoint an operator under the proposed Public-Private Partnership (PPP) model has already sparked extensive debate among the business community, shipping agents, port users, and policymakers.
There is ongoing discussion over whether the appointment of a foreign operator would genuinely improve operational efficiency or whether greater emphasis should instead be placed on utilising and strengthening domestic capabilities.
Speaking to Bonik Barta, Md Amirul Haque, president of the Chattogram Chamber of Commerce and Industry, said: “If a decision has already been made to hand over the New Mooring Container Terminal, the best-performing terminal of the port, then there’s little point in further discussion. Until a formal agreement is signed for its operation, the government retains full authority to make the decision. In that case, a public hearing could be held. That would also help ensure that the government doesn’t face major criticism afterwards.”
“There are at least 15 other major international terminal operators in the world. Instead, foreign operators could be engaged in the operation of the Bay Terminal. That would create a competitive environment there,” he added.