Unilateral Deal with Foreign Firm DP World: Opaque Process in New Mooring Terminal Lease

The New Mooring Container Terminal (NCT) is a major source of revenue for Chittagong Port, handling 44% of its import and export containers and generating nearly 60% of its income. It is the port’s largest container facility and was built with profits earned through the port’s regular operations. The port also spent billions of taka on modern heavy equipment for the terminal.

Despite its consistent profitability, the NCT has been leased to Dubai-based DP World under a concession agreement. The contract was signed in Dhaka on October 8, despite strong public opposition, protests and widespread dissatisfaction.

The deal has raised questions about whether the government will gain the expected benefits or whether the decision will prove costly in the long run. The terminal is located beside a major Bangladesh Navy installation and the country’s principal energy facility, raising concerns about whether sensitive national security interests have been adequately considered.

Since July 7, 2024, Chittagong Dry Dock Limited, a Bangladesh Navy-owned company, has operated the NCT. Port stakeholders say it has managed the terminal efficiently and transparently. They fear that handing it over to a foreign operator could increase operating costs, with the burden ultimately falling on traders, industrialists and consumers.

Critics also warn that the port could lose its role as a service-oriented facilitator of trade, industry and economic development and become primarily a commercial enterprise. Another source of anger is the decision to proceed with the lease despite more than two years of protests by port and dock workers, political groups, professional organisations and civil society. Protesters demanded the cancellation of the decision and the process, but their demands were ignored, as were calls for dialogue.

Critics allege that the lease forms part of a wider plan, initiated during Sheikh Hasina’s government, to transfer publicly funded, profitable container terminals to business groups linked to the former ruling family and Awami League. Economists and experts have also questioned what they describe as an unreasonable and potentially self-defeating leasing model that could place public assets under the control of private business interests through a foreign company.

The decision to seek an international operator for the NCT was taken after the first term of the previous private operator, Saif Powertec Limited, expired. In 2008, an international competitive tender was invited, and the leasing process was completed. Four leading international port and logistics operators were shortlisted. However, the Awami League government abruptly cancelled the process.

On February 17, 2019, a leasing model was developed with the apparent aim of directly appointing a foreign company from the United Arab Emirates without an open tender. On April 3, 2023, Hasina approved the policy decision to lease the terminal to DP World. The controversial NCT lease, which critics describe as a damaging legacy of Hasina’s government, was eventually implemented near the beginning of the current government’s term after passing through the interim administration led by Dr Muhammad Yunus.

The agreement has triggered renewed anger, disappointment and criticism among port and dock workers, officials, professionals, port users and concerned citizens. Questions have focused on the secrecy and lack of transparency surrounding the 15-year lease process, which began during Hasina’s tenure. Critics say the agreement with Dubai-based DP World was effectively signed without following a competitive tender process.
The absence of transparency, accountability and open competition has fuelled doubts about the deal. Even after the signing, Chittagong Port users remain divided over the decision to lease the terminal to a foreign company.

The government, the Ministry of Shipping and Invest Bangladesh have argued that the concession will improve the port’s efficiency and operational performance. They expect it to reduce longstanding irregularities, corruption, mismanagement, harassment and illegal payments, including bribes and so-called speed money. They also believe the deal will boost foreign investors’ confidence and send a positive message about Bangladesh’s investment climate.

However, prominent economist and social and cultural researcher Professor Anu Muhammad, one of the strongest critics of the long-term lease, has questioned the process. He said an open and competitive procedure was not followed for such an important national infrastructure project. Instead, the agreement was reached in secrecy, without a public tender.

Speaking to German broadcaster Deutsche Welle, Anu Muhammad said Sheikh Hasina had first initiated the move to award the contract to DP World without a tender or the required clearances. He said the interim government led by Dr Yunus later tried to implement the deal forcefully, and the current government had now proceeded with it.

He added that the process itself was problematic because the agreement had been negotiated in such a secretive and opaque manner that the public knew little about it. No tender had been invited, he said. Another prominent economist, Dr Fahmida Khatun, has also stressed the importance of competition through a tender process. Although DP World has experience operating ports around the world, she noted that the company has also faced criticism. She said she did not know the exact reasons for selecting it.

Anu Muhammad also challenged the government’s argument that the lease would increase the port’s capacity and revenue. He said Chittagong Port was already operating profitably and had received substantial investment. Therefore, he saw no need for the agreement.

Tapan Dutta, a veteran labour leader and member of the Chittagong Port Protection Committee, questioned the container-handling target set for DP World. The company has reportedly been given an annual target of 1.235 million twenty-foot equivalent units (TEUs). However, the port handled 1.385 million TEUs in the previous fiscal year, despite natural disasters and other operational challenges.

Mr. Dutta said the target was therefore around 150,000 TEUs lower than the volume already handled by the port. He compared the arrangement to “frying fish in fish oil,” suggesting that the deal offered little additional benefit. National security and sovereignty are other major concerns raised by opponents of the agreement.

Anu Muhammad said international activities in and around the Bay of Bengal made national control over the port particularly important for security. Criticising the government for signing the agreement despite strong opposition, and opposition parties for remaining silent, he said, “We feel that this government and the opposition parties supporting it are far more indebted to certain foreign mafia groups than to the people whose interests they were accountable to before coming to power.”

In response to concerns over national interests, the office of Invest Bangladesh Chairman Ashik Chowdhury said the agreement includes safeguards for Bangladesh. The initial term is 15 years, with any extension subject to specified conditions and the consent of both parties.

According to the office, Bangladesh will retain control over security, customs, immigration and state authority. No sovereign powers will be transferred under the agreement. It also dismissed concerns about national security and the possibility of Bangladesh falling into a debt trap similar to the one associated with Sri Lanka’s port.

Dr Fahmida Khatun has also highlighted the possible economic impact of the 15-year lease. She said improving port efficiency alone was not enough; the cost of services and the value received in return were equally important. She warned that when competition is inadequate and a company operates as a monopoly, users may lose the ability to negotiate prices and service terms.

The long-term impact of the DP World agreement on Chittagong Port, Bangladesh’s trade and industry, and the country’s economic interests remains a subject of debate. While the government expects greater efficiency and stronger investor confidence, critics continue to question the lack of transparency, the absence of open competition and the potential implications for national security and public interests.