Road transit fees highest
Govt body recommends tariffs on consignments for all three modes of transportation
Rejaul Karim Byron
A government committee has recommended transit fees ranging from $252 to $54,368 to be charged from India, Nepal and Bhutan for each consignment of cargo using road, river and train routes of Bangladesh.
The fees have been calculated on the basis of weight of the cargo, the types of routes to be used and their distance, sources close to the committee said yesterday.
The lowest rate is applicable for using waterways while the highest is for roads.
The fees will vary from 2 cents to 11 cents per tonne and per km depending on which route is being used, said the committee in its report submitted to the government recently.
In addition to the transit fees, the users must pay fuel tax and other surcharge for carrying transit goods, said the committee headed by Tariff Commission Chairman Mujibur Rahman.
The committee was formed last year amid speculations that Dhaka and New Delhi will sign a transit deal during Indian Prime Minister Manmohan Singh's visit to Bangladesh (that took place last month). Dhaka refused to sign the road transit agreement after India backed out from signing the much-expected accord on sharing the Teesta river water.
Since then, India has transhipped steel and construction materials to Agartala through Ashuganj river port under the existing river transit protocol without paying any transit fees. The government called it a trial run responding to concern that Bangladesh is losing revenue due to a weak policy.
Commerce ministry officials said the government will negotiate the transit fees with India and other possible users following the committee report.
Eleven types of fees have been calculated in fixing the total charges. Customs and land port charge and foreign vehicle entry fees will remain fixed, said the report.
Certain charges common for all cargo such as sea and land port charges, bridge tolls, have not been included in calculating transit fees, it said.
Transit operators will have to pay these charges separately as applicable to all non-transit operators. Besides, transit operators will have to pay fuel tax equivalent and provide bank guarantee and insurance premium.
The report further said fuel, especially diesel, is heavily subsidised in Bangladesh. The amount of subsidy for diesel is almost 40 percent of its market rice. It is, therefore, necessary to realise the market price of fuel from transit operators of all the three modes of communications -- roadways, waterways and railways.
A smooth mechanism towards realising the same may be worked out to ensure equivalence of fuel price in respect of all transit operators, local and foreign, the committee said.
In addition to charges, transit operators must have insurance against accidents and goods. They also have to provide bank guarantee for covering customs duties and other taxes.
The report mentioned elaborately the economic benefits and risks involved in providing transit facilities.
Apart from various charges, some service sectors like transportation, banking, insurance, restaurants etc are also expected to earn good revenue. Utilisation of the spare capacity of Chittagong and Mongla seaports will also be a good source of earning.
Since all investments and costs of service will be recovered with reasonable return on capital, direct cost to Bangladesh may be nominal in the long run.
However, how long it will take to recover those costs will depend on the volume of transit cargo and number of vehicles. A clear estimation at this stage is highly implausible.
The report said in case the expected volume of cargo movement is not there, then repayment of investment costs, if financed under borrowing from international agencies, will put Bangladesh at a risk.
If the investment is financed by the government, the opportunity cost to Bangladesh may also be very high. Therefore, the issue needs to be very carefully examined, it said.
I wont think twice in paying well.
