Summary:

The verdict of the Competition Commission not being enough to handle the issue needs further actions from the government to form a body on transport management and fixing fares.

Content:

The surge in charges for transportation of goods at seaports under a ‘monopoly’ in lighter-vessel operations, according to a case trial, is a major cause of excessive costs that customers have to pay through the nose.

While settling a lawsuit, the statutory-judicial authority in charge of ensuring fair competition on the Bangladesh market issued a set of directives stating that the ‘monopoly’ business in lighter-vessel operations will stop if its orders are followed by the authorities.

In one recent case, however, the lightering fares were increased by 15% just 15 days before the Bangladesh Competition Commission (BCC) issued its decision on November 29.

 In its final decision, it was alleged that the ‘cartel’ remained in the water-transport sector for a long time and became the reason for the price hike of the relevant goods in the market.

Some 1300 of these small vessels transport rice and corn, as well as iron scraps, cement clinker, stones, and food supplies. The cost of doing business has increased due to the increase in fares for this method of transportation.

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And, according to businesses, higher fares result in higher pricing for final products on the market, which end-consumers pay for. Ship owners can raise fares whenever they want, forcing businesses to pay more for transportation.

On the other hand, Importers who bring in bulk consumer products and industrial raw materials must wait for their mercy to be granted permission to transport commodities from mother boats. They are unable to use the vessels of others.

To tackle this, BSRM officials have stated that they want to hire vessels on the free market but are unable to do so under the current structure. Now, the commodities can only be carried by WTC members.

The BCC proposes a management and fare-fixing organisation that will ensure a competitive environment and market in the sector. The government may enact legislation to address the issue, according to the report.

Representatives from the WTC informed the Financial Express that fares had already been reduced, which pleased importers. They stated that there is no cartel in their company.

In August of last year, the WTC reduced fares by approximately 33% to TK 280 per tonne. However, due to rising fuel prices, it has raised its tickets once more, effective November 15. The new rate is Tk 322 per tonne, which is a 15% increase.

Source: The Financial Express