Unusual tariff hike before DP World takes over Chittagong Port in November

Staff Correspondent

Chittagong, 16 September 2025: After almost 40 years, the Chittagong Port, known as the backbone of Bangladesh’s economy, has decided to increase tariffs (fees) in various service sectors. The new tariff notification was issued on Sunday (September 14) night, which came into effect from Monday (September 15). Overall, the average tariff has increased by 35 to 41 percent, which analysts believe could increase the port’s income and create new pressure on the import-export sector.

At the same time, stakeholders are skeptical about such a high tariff increase before the port management was handed over to foreign company DP World in November. If DP World takes over the port, DP World will get 60% of the port’s handling charges, and NCT will get 40%. Chittagong Port handled a record 32.96 TEU containers in the 2024-25 fiscal year, which was possible with local management.

Chittagong Port Authority (CPA) Secretary Md. Omar Farooq confirmed that the new rates have been effective since the morning of September 15. The port collects tariffs in a total of 52 sectors, of which 23 sectors have been directly increased. For example, the rates of five services including port tax, berthing fee, forklift charge, utility cost, etc. had changed slightly in the 2007-08 fiscal year, but all the others had remained unchanged since 1986. This time, the rates have been fixed at an exchange rate of 122 taka per dollar, which will increase further if the dollar appreciates.

 Reasons for tariff hike: Long-term neglect and cost pressures

The government said the main reason for this increase is the long-standing stagnation of tariffs in the port’s service sector. Since most service charges have remained unchanged for almost 40 years since 1986, it has become difficult for the port to meet its operational costs. This decision was taken under the interim government to ensure the financial stability of the port. Experts say inflation, rising fuel and labor costs, equipment maintenance and pressure to meet environmental standards are among the reasons for this increase.

For example, in the current fiscal year (2024-25), the port handled a record 3.296 million TEU containers, breaking all previous records. To capitalize on this growth, the port needs to modernize its infrastructure and increase its efficiency, which requires additional funding. According to CPA Chairman Rear Admiral SM Moniruzzaman, this tariff increase will make the port self-reliant and attract foreign investors in the future, such as the ongoing discussions with companies like DP World.

Growth Impact: Short-term Pressure, Long-term Gain?

The impact of this tariff increase will be felt in various sectors of the economy, which, when analyzed, reveals a two-sided picture. First, it is a big challenge for traders. Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Director Rakibul Alam said, “Raw materials for ready-made garments are imported through the port, which will increase the cost of the industry. There will be an additional cost of 12 paisa per kg, which will reduce the competitiveness of exporters.” Traders have expressed concern that this tariff increase is like a ‘stump on a cliff’ amid global conditions such as the 20 percent counter-tariff from the United States, Trump’s possible additional tariffs, and the increase in exports from competing countries. As a result, the cost of imports and exports may increase, which will reach the common people.

Second, port operations could become more complicated. Political unrest, floods, drivers’ strikes and customs officers’ walkouts in the current fiscal year have already led to shipping delays and cargo unloading delays. If the tariff hike creates discontent among traders, more strikes or delays could occur, affecting foreign exchange earnings and trade chains. “This increase could increase overall costs and reduce competitiveness amid record exports,” said Ruhul Amin Sikder, secretary general of the Bangladesh Inland Container Depot Association (BICDA).

However, it also has a positive impact in the long run. The increased revenue from the tariff hike will enable the port to purchase modern equipment, train staff and develop infrastructure. This will increase container handling capacity, which currently handles over 1.3 million TEUs. “This will make the port international standard and attract foreign investment, which will ultimately strengthen the trade sector,” said analyst Mustafa Abid Khan. However, the government will have to introduce support packages (such as subsidies or tax breaks) along with this increase to mitigate the short-term losses.

Port traders say that increasing tariffs at this time is worrisome considering the global situation. Although this step by the interim government is part of economic reforms, its real impact will take time to be seen. Detailed information is available on the CPA website, and business organizations have become vocal in their opposition to it.