Bangladesh’s air-cargo handling is opening for private investment as the government has drafted maiden policy on its privatisation amid an upturn in the country’s global air-route trade, sources say.
Aiming to introduce the global practice of engaging regulated agents in air-cargo handling, the draft policy has set a number of compliance requirements and fixed tariffs as cargo-handling charges.
Once private-sector investment allowed, aviation experts say, exporters and importers would enjoy competitive tariffs on air-cargo handling that is currently centralized to only Biman Bangladesh.
The policy, framed by the Ministry of Civil Aviation and Tourism, has fixed service charges for Regulated Air Cargo Agents (RACA) operators as tariffs, security deposit, royalty and fees.
Tariff for RACA against its services has been set US$ 0.12 followed by security deposit of Tk 5.0 million for Bangladeshi companies and Tk 7.5 million for joint-venture one with foreign companies.
However, the security deposit is refundable in case of suspension of RACA licence.
Licensing fee has been set at Tk 2.5 million while its renewal fee Tk 1.0 million and royalty of CAAB at $0.02 on tariff charged by RACA.
The ministry has sent the policy draft to the stakeholders both in public and private sectors recently.
The RACA can obtain licence under four categories: readymade garments, perishable items, courier items, and other items.
First vice president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Syed Nazrul Islam says the apex apparel association wants private-sector investment in air-cargo handling but cautious steps should be taken so that charges remain unchanged.
He thinks branding Bangladesh is important too as Chittagong seaport and international airports represent the country globally.
“Competitiveness would enhance the efficiency of Biman and check its bureaucratic tangle,” he hopes about the change.
Biman Bangladesh Airlines Managing Director and Chief Executive Officer (CEO) Dr Abu Saleh Mostafa Kamal says the national flag-carrier has the capacity to handle existing air cargos with the available resources.
The MD, however, says that extension of the airport third terminal would make it more vibrant and may require engagement of private sector in cargo handling then alongside capacity development of Biman too.
He awaits detailed scrutiny of the draft policy to make further comment on this development underway.
The draft policy has kept provision for joint-venture investment with 51-per cent local share. The joint-venture investors would be able to sell their share after at least seven years of RACA operations.
Paid-up capital for Bangladeshi companies should be at least Tk 100 million while for joint venture with foreign companies is minimum Tk 150 million.
At least five years’ experience on air-cargo-handling-related work in Bangladesh would be a prerequisite to apply for licence.
The RACA has to be established within 20 kilometres of airport and entry or exit gate of RACA should be at least 200 meters away from district and regional highway or district road to avoid traffic congestion.
The size of RACA has to be at least 50,000 square feet.
According to the sources, the policy has been drafted as per International Civil Aviation Organisation (ICAO) rules and mandatory requirements to ensure security of cargo and simplify process of cargo-supply chain.
Any of the airline operators, ground-handling agent, freight forwarder or other organizations operating business with Biman operators of Bangladesh, registered as a member of the Civil Aviation Authority of Bangladesh (CAAB) air-cargo supply chain, responsible for air cargo and mail-related any of a task and also following its relevant security rules would be considered as regulated agents.
The policy would be applicable to establishing a RACA in a CAAB-and customs authority-approved space aiming to transport goods through air routes. However, mode of transport of the goods can be road, water, rail or others but those should be targeted to be transported through air route.
There must be geo-location-tracking facility, aviation-security measurement as per ANO of CAAB irrespective of modes of transport from RACA to Airport.
The RACA would release and load export products, handle containers, screening as per CAAB parameter, complete customs and other authorities’ procedures, bonded trucking and handover to ground- handling agents from RACA to Airport.
Zanendranath Sarker, Additional Secretary (Biman and CA) at the Ministry of Civil Aviation and Tourism, said the draft policy has been sent for stakeholders’ opinion as it is one of the major decisions whether the government would allow the third party or private sector to handle air cargo.
“We are yet to get response of the all stakeholders to hold meeting for taking further decision on this,” he told the FE.
Another senior official of civil aviation ministry says private sector, especially BGMEA, gave the green light on the draft policy.
Some top officials of the international airlines said they prefer competitive air-cargo-handling environment like in other countries to get rid of unusual delay in passenger and also release of perishable goods on connecting flights.
Neighbouring India allowed private organizations GMR, Celeby Aviation Holding in air-cargo handling.
They said despite having system, typical mindset, poor infrastructure and other constraints are hindering the country from tapping the potential of growing market.
Earlier in July, the BGMEA requested the Biman to improve air-cargo- handling services at Hazrat Shahjalal International Airport to facilitate RMG export as reports say they are having business rebound in full steam in the wake of global reopening from corona lockdowns.
