Shipbuilders are eying supply orders of vessels worth Tk 15 billion from local buyers required for transporting containers to Chittagong Port from inland container depots (ICDs), which are expected to be operational in the next few years.
The government awarded 32 private owned companies for owning container carrying vessels from the five ICDs.
The licencees have explored the need of at least 32 vessels to transport containers to and from the country's two seaports - Chittagong and Mongla through river ways.
The local ship makers and the shipping firms are enthusiastic to make the deals in Bangladesh due to the assurance of cheaper price, quality and timely delivery at a time, business insiders said.
Director of Khan Brothers Shipbuilding Ltd (KBSBL) Dr Abdur Rahim said the best option for the shipping firms is to purchase vessels from the local builders.
He said the local ship makers can easily make the vessels with capacity less than 200 TEUs (twenty feet equivalent units) for the firms.
But considering the draught of the rivers, it would be viable to make container vessels less than 160 TEUs capacity, he said.
Dr Rahim, also a naval architect, said a ship of international class between 155-160 TEUs (Category-A) will cost the shipping companies Tk 450 million to Tk 500 million as per their demands.
It is 15 to 20 per cent less than that of China, India or Vietnam, he said.
"Total cost of the purchasable ships would be at least Tk 15 billion at current market price," he added.
Naval architect and marine consultant Md Shamsul Alam said 16 local shipping firms are prepared to make the deals locally.
Mr Islam also informed the FE that many of them came to his company for making designs which is mandatory to submit to DoS.
Rest of the shipping companies will also turn to purchase ships from the domestic market due to ship's quality and cost effectiveness, said Islam, also managing director of a naval consultancy firm Marine House Ltd.
Director of Ananda Shipyard and Slipways Ltd (ASSL) Md Saiful Islam pointed out some difficulties of the shipping lines regarding bank loans.
Terming it undoubtedly a big investment he said a design, which is also called 'the prototype of the required vessel', would cost at least Tk 41 million at current market price ($0.5 million).
"A number of shipping companies claimed that they were getting poor response from the banks for credit which forced them to delay," he said.
Meanwhile, many of the licence holders admitted to the FE that lack of bank loans as well as delay in opening of ICDs, forced them to adopt a go slow policy before making such big investment.
Hasan Saifi Jalil, chairman of M-S Arian Traders, which is among the 32 companies who got the licence, said the DoS' time frame regarding owning ship was too short to purchase.
Mr Saifi noted that none of the ICDs, approved by the government, is ready for transportation.
However, after giving the license, the Department of Shipping (DoS) tied a six-month deadline to the firms to submit invoice and ship specification copies to its office.
But, all the shipping firms missed the deadline ended in March this year and sought a further time extension.
Mr Saifi said this short time frame could encourage import of the ships which would not be cost effective. He urged the DoS for an extension of time at least by one and a half years.
"It will give us to understand the market and make the deal smoothly in Bangladesh," he said.
Mr Saifi admitted that it would be comfortable for them to own ship from local shipbuilders. "The price of ship is the cheapest in Bangladesh over the world and their quality is outstanding which attracts even countries like Germany, Denmark and the Netherlands," he said.
Chairman of the KBSBL Md Mohammed Enamul Kabir Khan told the FE if the deals could be made, it would shield the local companies at a time when it is struggling with a poor export order caused by the economic meltdown in EU countries.
He said there is an ample scope of transforming the country's business using river ways.
He pointed out that Bangladesh has one of the largest inland waterway networks in the world with around 250 natural rivers connecting almost all major cities and commercial hubs.
"The ship making sector is emerging not only as an export sector but also as an import alternative industry" he added.