Major global firms eye investment as interim government accelerates FDI drive ahead of national polls.
Bangladesh is on the brink of finalising a wave of high-profile foreign investment deals to operate and develop critical port facilities in Chittagong, aiming to transform the country’s gateway to the Bay of Bengal into a regional maritime hub. With October set as the target, top international port operators are in advanced stages of negotiations with the interim government, which is eager to leave behind a legacy of economic rejuvenation before handing over power in the upcoming national elections.
The Bangladeshi business news website, Financial Express has reported that the appointment of internationally reputed port contractors will be completed by October through what authorities describe as “transparent deals.” Shipping Adviser Brigadier-General (Retd) M Sakhawat Hussain confirmed this while noting that dedicated teams across ministries have been working intensively to clear bureaucratic hurdles that previously stymied foreign investment.
The stakes are high. According to the World Investment Report 2025, prepared by the United Nations Conference on Trade and Development (UNCTAD), Bangladesh’s net foreign direct investment (FDI) fell by 13.2 per cent in 2024 to $1.27 billion, down from $1.47 billion in 2023. It marks the fourth straight year of decline in FDI, reinforcing the urgency of reversing the trend.
In the Global Spotlight
Among the foreign giants vying for entry are DP World from the UAE, PSA Singapore, and APM Terminals, a unit of Denmark-based A.P. Moller-Maersk. The Chittagong seaport, already the most lucrative FDI zone in the country, has drawn global attention thanks to its strategic location and growing potential.
“Chittagong seaport has all the potential to become a regional maritime hub within the next three years, provided port operations are made efficient and vibrant,” said a senior official closely involved in the negotiations.
Efforts to ensure readiness for investment include a long-awaited overhaul of the port’s tariff structure. CPA Secretary Omar Faruk said the tariff revision, cleared by the Ministry of Finance, is now awaiting final vetting by the Ministry of Law. The revised rates, once gazetted, will establish a new benchmark for port service pricing, a key prerequisite for investor confidence.
Importantly, these tariffs will prevent monopolistic pricing. “Foreign investors won’t be able to set arbitrary charges on CPA-defined services. They may set tariffs only for additional services based on their capital and operational expenditure,” said Faruk.
Transparency and International Standards
Shipping Adviser Hussain emphasized that all agreements will be transparent, leaving no room for ambiguity or backdoor dealings. “There will be no ‘hide and seek.’ These are internationally visible contracts with legal and geopolitical bearings,” he said.
The New Mooring Container Terminal (NCT), now temporarily managed by a Navy-led Dry Dock operation after Saif Powertec’s 15-year contract ended in early July, is serving as a test case. Despite initial concerns, average container handling has risen by 7 per cent per day under the new operator.
“This success shows that strategic transitions can be made without disruption,” Hussain noted, adding that contracts for the Bay Terminal and Laldia Terminal are also nearing conclusion.
Major Developments Underway
The government aims to sign a concession agreement for the Laldia Container Terminal (LCT) by October, enabling construction to start as early as January 2026. APM Terminals has shown keen interest in investing in the Laldia terminal, although additional land acquisition remains under review due to air funnel restrictions.
Meanwhile, the Bay Terminal project is progressing rapidly. A new project director has been appointed, and senior officials, including Shipping Adviser Hussain and Special Envoy Lutfey Siddiqi, recently held talks with PSA Singapore, which has expressed strong interest. The Asian Development Bank (ADB) is supporting the government through a Transaction Advisory Services Agreement (TASA), which was recently reviewed by senior CPA officials at a meeting in Dhaka.
BIDA Executive Chairman Ashik Chowdhury highlighted the importance of efficient port operations as a critical prerequisite for attracting investment in other sectors. “All foreign investors first ask about port logistics and turnaround time. It’s a litmus test for overall investment viability,” he said.
He also assured that deals signed during the interim government’s tenure are unlikely to be scrapped by the next elected government, as they will be bound by international legal frameworks and diplomatic considerations.
“These agreements are being structured with safeguards to ensure continuity and protection for all parties involved,” Chowdhury noted.
FDI Prospects and Economic Impact
If the current pace continues, Bangladesh may see FDI flows worth $600 million to $800 million in LCT and Bay Terminal projects over the next two years, officials said. The influx of foreign capital, technology, and expertise could significantly raise the capacity of Chittagong port.
According to CPA estimates, the Bay Terminal alone could raise the port’s annual container-handling capacity to 5 million twenty-foot equivalent units (TEUs). In addition, the Matarbari terminal, under construction with Japanese assistance, is also expected to begin operations by late 2026, further easing pressure on Chittagong port.
To complement these developments, the National Board of Revenue (NBR) has launched initiatives to improve customs procedures and reduce bottlenecks at major entry points. Senior officials are physically inspecting operations at key ports including Mongla, Benapole, and Pangaon.
Challenges Ahead
Despite the progress, not all stakeholders are comfortable with the changes. Private sector groups have expressed concern over the impending tariff hike, especially in the context of global trade uncertainties exacerbated by heightened tariffs from major economies like the U.S.
Still, government officials argue that the current port tariffs — unchanged since 1886 — are unsustainable and must be revised to make port investment financially viable.
“Without a realistic pricing model, no reputable investor will come on board,” one senior CPA official remarked.
As Bangladesh positions itself to become a key maritime hub in South Asia, the successful onboarding of global port operators and transparent investment agreements may well reshape the country’s trade and logistics landscape. With the clock ticking toward national elections, the interim government is racing to complete a historic chapter in Bangladesh’s economic story — one defined by connectivity, competitiveness, and long-overdue foreign investment.
If all goes according to plan, the Chittagong port transformation could become the flagship achievement of the current administration — and a catalyst for a broader wave of industrial and infrastructural growth in the coming decade.
Image: Banglapedia
