Bangladesh’s Controversial Port and Terminal Lease Agreements Draw Widespread Criticism
Article by S. Goswami
One of the most widely discussed issues in Bangladesh at present is the leasing of ports and terminals. The government’s rapid move to lease these facilities to foreign companies through the Government-to-Government (G2G) method has sparked intense criticism and protests. Questions are also being raised by several prominent institutions and individuals in the country regarding the legal basis of these agreements.
Experts warn that G2G agreements often carry significant risks that may become detrimental to a country in the long run. Detailed analyses suggest that such deals can simultaneously create a range of vulnerabilities, including threats to sovereignty and national security, geopolitical pressure, revenue and profit outflows, monopolistic control over tariffs and duties, growing economic dependency and debt traps, lack of transparency in agreements, and instability in the labour market.
Sovereignty and Security Risks
Foreign companies often gain extensive authority over port operations, access control, and investment priorities. As a result, during emergencies such as war or periods of geopolitical tension, the host country may face difficulties in making independent decisions.
There is also a risk that critical defense or commercial information could be exposed through container tracking systems and vessel traffic monitoring networks operated by foreign entities. In such circumstances, the leasing country may lose strategic control, potentially creating internal security concerns.
Geopolitical Pressure
In many cases, G2G agreements prioritise geopolitical interests over purely commercial considerations. This can lead to delays in project implementation or difficulties in maintaining diplomatic balance in international relations.
Such agreements are often used by foreign powers as political or diplomatic instruments. Neighboring countries may also exert pressure on the leasing country due to security concerns related to foreign involvement in strategic infrastructure.
Economic Dependency and the Debt Trap
Ports are sometimes leased out in the hope of reducing debt burdens or attracting large-scale investment. However, this can later become a long-term economic challenge.
Many developing countries take foreign loans to build large infrastructure projects or ports. When they fail to repay those loans, the creditor country or company may take control of the port. The Hambantota Port in Sri Lanka is a notable example, where control of the port was handed over to a Chinese company for 99 years due to debt obligations, significantly constraining the country’s economic and political decision-making autonomy.
Monopoly Control Over Tariffs and Fees
Under lease agreements, foreign companies are often granted the authority to determine port usage fees or tariffs. If a company raises fees to maximise profits or to serve the interests of a particular country or group, local importers and exporters may be directly affected.
This increases production costs for domestic industries and reduces the competitiveness of local products in international markets.
Revenue and Profit Repatriation
A significant portion of the revenue generated from port operations may be transferred abroad as dividends by foreign companies. This reduces opportunities for reinvestment within the local economy and may negatively impact the country’s foreign exchange reserves and domestic capital accumulation in the long term.
Concerns Over Lack of Transparency
G2G agreements are typically signed directly with specific companies under conditional arrangements, leaving little room for open-market competition or price verification.
In Bangladesh’s case, the lease agreements are reportedly subject to non-disclosure conditions, raising concerns about the actual terms and obligations involved. Moreover, such agreements may create opportunities for illicit financial transactions among intermediaries.
Potential Labor Market Instability
Automation and technological upgrades in port operations may lead to job losses among workers. At the same time, there may be limited accountability regarding recruitment and termination decisions.
As a result, labour unrest and work stoppages could disrupt port operations. Recently, workers at the New Mooring Container Terminal of Chittagong Port staged protests and demonstrations over similar concerns.
Overall Concerns
Considering these issues, many analysts believe that G2G port lease agreements could potentially serve as geopolitical strategies aimed at undermining internal security while establishing monopolistic economic control and creating debt dependency that may lead to diplomatic intervention.
Citing these concerns, a group under the banner of “patriotic civil society” recently held a press briefing demanding an investigation into the lease agreements. They also submitted a memorandum to the Anti-Corruption Commission of Bangladesh, seeking a travel ban on individuals involved as intermediaries in the deal.
Views are those of the Author(s)
