‘Syndicate’ grip on coal transport sector

Instability and disorder have emerged in the coal transport sector serving the country’s coal-fired thermal power plants, a key pillar of national energy security. 

Due to alleged violations of established policy and fixed freight rate schedules by a syndicate of influential intermediary logistics companies, lighter vessel owners are reportedly suffering financial losses.

Amid soaring fuel prices and sharply rising operational costs in the market, owners of coal-carrying vessels say they are now in a state of distress. 

Stakeholders have called for urgent, high-level government intervention to restore discipline in the maritime sector and permanently curb the influence of what they describe as an unscrupulous network.

Otherwise, they warn, vessel operations may become unviable, potentially triggering a coal transport crisis. This, they fear, could disrupt power generation at major coal-based plants such as Rampal Power Plant and Payra Power Plant, leading to severe load shedding and a wider electricity crisis.

At present, out of five coal-fired thermal power plants in the country, only the Matarbari Power Plant can accommodate direct docking by large “mother vessels” due to geographical constraints and river navigability issues. As a result, coal must be discharged at Chattogram port’s outer anchorage and transported via lighter vessels along river routes to the power plants.

The cranes used for unloading coal at Rampal and Payra are equipped with relatively large grabs, with a capacity of around 35 cubic metres. However, most local lighter vessels have a capacity of only 1,000-2,000 tonnes and relatively small holds, making them incompatible with such equipment.

Service providers and shipowners allege that the Bangladesh Water Transport Coordination Cell (BWTC) frequently allocates smaller vessels without considering operational suitability for coal unloading at power plants. They claim that this weakness has enabled intermediary logistics firms to form a powerful syndicate.

The main allegations are directed at companies including QNS Shipping Logistics and AMMS Logistics, owned by businessmen reportedly close to the former Awami League government. 

During that period, QNS Shipping Logistics Chairman Nurul Qayyum Khan served for a long time as president of the Bangladesh Inland Container Depots Association (BICDA), while AMMS Group, owned by Shafiqul Alam Jewel, was involved in supplying heavy machinery and goods for various mega projects.

It is alleged that these firms obtain sub-contracts for coal transport from the main contractors of the Rampsal and Payra power plants. However, as they do not possess sufficient numbers of their own lighter vessels, they lease vessels from owners in violation of BWTC regulations. In many cases, they allegedly fail to pay vessel owners fair freight charges, while owners are compelled to accept unfavourable terms due to pressure from relevant government-linked entities.

There are also allegations that intermediary companies are paying nearly half of the per-tonne freight rate set by the Department of Shipping and the Bangladesh Water Transport Coordination Cell for coal transport routes from Chattogram to Mongla or Payra.

In the current global and domestic market, where fuel prices, maintenance costs, staff salaries and inflation remain high, shipowners say operating vessels at such rates is nearly impossible. They report incurring heavy losses per trip while transporting coal at reduced rates.

Following these complaints, an emergency meeting was held on 17 May at the Department of Shipping. Upon learning of the meeting, shipowners staged protests against what they described as the syndicate of intermediary companies, demanding full enforcement of BWTC regulations.

An senior representative of a leading coal transport company on condition of anonymity told this correspondent, “We want a rational and sustainable order in this sector. On one hand, it is impossible to reduce rates further due to rising taxes, VAT, fuel and other costs, and on the other hand, National Board of Revenue taxes cannot simply be waived. Therefore, vessels must operate at government-fixed rates. Middlemen must not be allowed to cheat shipowners.”

Regarding the situation, BWTC convener Shafik Ahmed said, “In the meeting on 17 May, it was decided that the Department of Shipping would create a separate queue for Payra Power Plant and BWTC would allocate vessels accordingly. The government will also set freight rates for Payra. Electricity generation is the most urgent national priority. The government will extend full cooperation, and shipowners will also cooperate in the national interest.”

He further noted that BWTC oversees more than 1,000 lighter vessels. 

He added, “Beyond this, large industrial owners have their own lighter vessels, which they use to transport their own raw materials or goods. The official gazette clearly states that all other lighter vessels must operate under BWTC’s queue or pool system.”

Vice Chairman of the Inland Vessel Owners Association of Chittagong (IVOC) Parvez Ahmed elaborated on the meeting’s decisions, saying, “As the current government is placing special emphasis on coal-based thermal power plants, a large volume of coal is being imported. Those who transport coal to power plants have requested vessels from BWTC. A policy decision has been made that vessels must be allocated from our association or pool.”

He also acknowledged technical constraints, stating, “The emergency meeting was primarily called to ensure uninterrupted coal transport. There will be a separate queue for Payra. Payra consists of three coal-fired power plants. However, not all vessels can go there because the hold (hatch) dimensions differ. The minimum hatch width must be 28 feet so that large grabs can enter. If we have 1,000 or 1,100 vessels, around 200-300 will be selected or placed in a separate pool based on Payra’s technical specifications. Vessels must be allocated according to grab size; otherwise, they will not be practically usable. Each power plant requires around 50-60 vessels on a continuous basis.”

He acknowledged the role of intermediaries, adding that sub-contractors who take contracts from main operators often have limited fleets. As a result, they have been hiring lighter vessels at lower rates, which has created instability in the sector.

Stakeholders in the maritime sector, including owners and workers, are demanding that the Department of Shipping and BWTC take a strict stance immediately to maintain uninterrupted coal supply to power plants and protect vessel owners from losses.

They further demand that logistics companies such as AMMS Group and QNS Shipping be prevented from operating outside registered pool rates, with strict monitoring mechanisms established and licences revoked in case of violations.

The crisis, they warn, is no longer limited to financial losses for shipowners but has become a major threat to national energy security.

Chief Engineer and Ship Surveyor (routine charge) of the Department of Shipping Mirza Saifur Rahman said, “Shipowners have complained that they are not receiving proper freight rates. The matter has been discussed. It has also been decided that it will be monitored. We hope the ministry will take a final decision.”

When contacted, Nurul Qayyum Khan, chairman of QNS Shipping Logistics, denied the allegations, saying that coal transport freight rates for lighter vessels are determined with the consent of the owners’ side.

When asked about the allegations, Shafiqul Alam Jewel, managing director of AMMS Group, said he was hospitalised and undergoing treatment.