Khanpur ICD Project Faces Delisting from Indian Line of Credit amid Execution Delays

The Khanpur Inland Container Depot (ICD) project is now on course to be officially delisted from the Indian Line of Credit (LoC), following a January rejection of the Ministry of Shipping’s proposal to increase the project cost and extend its completion timeline, government officials confirmed. The Ministry of Shipping has sought the opinion of the Economic Relations Division (ERD) regarding the exclusion, and the ERD is currently consulting relevant ministries to assess possible legal or financial ramifications. A senior ERD official noted that, once evaluations are complete, a formal request will be sent to the Indian High Commission in Dhaka to proceed with delisting.

Back in March, both countries informally agreed during a bilateral LoC review meeting not to pursue the project any further. This followed an Executive Committee of the National Economic Council (ECNEC) session, chaired by Chief Adviser Prof. Muhammad Yunus, which returned the revised proposal citing execution failures and flaws in planning. Officials flagged the feasibility study as flawed and the cost estimates as inflated. Originally approved in December 2019, the project aimed to boost inland cargo movement via waterways. Despite an initial timeline of January 2020 to June 2023, no visible progress had been made. Even after extending the deadline to June 2025, implementation remained stagnant.

According to the PPP Authority, nearly 70% of containers at Chittagong Port are either destined for or originate from Dhaka. However, only 17% are transported via rail or road. The rest rely on trucking, causing chronic congestion on the Dhaka-Chittagong Highway and significant delays. The Khanpur terminal was expected to be a game-changer. Once operational, it would have allowed for up to 80,000 TEUs of container handling annually via inland waterways—offering a much-needed alternative to road transport and helping ease logistics bottlenecks.