Determination of the Transit Fee for Mongla-Ghasiakhali Canal: Savings from the Daily Running Cost of Ships

Abstract

MG (Mongla-Ghasiakhali) Canal, a man-made canal that connects the southwestern part of Bangladesh, is one of the industrial zones where the second largest seaport, the Mongla seaport, and two inland river ports are situated. The Government of Bangladesh maintained the canal since it was opening in 1973. From 2010, the maintenance excavation of the canal was postponed because the rate of siltation was higher than the excavation works allocated for it. Paucity of budget was the main reason as the return from the canal was too low to recover the minimum part of the budget. The objective of the present study is to determine the minimum tool rate based on the savings by the vessels operator who will use the canal. At present, almost all types of goods are transported through the waterway canal inside the largest single block of the tidal halophytic mangrove forest in the world, Sundarban (a United Nations heritage) and that causes serious environmental problems and threats to the biodiversity of the forest. Therefore, utilization of the MG Canal will not only be an alternative waterway network for transporting of goods but also reduce the voyage length. To determine the minimum toll rate, several government agencies of Bangladesh and operators have been contacted to collect the data both quantitatively and qualitatively. Real-time data has been used for calculating the minimum standard tool rate.