Bangladesh says China to help in port expansion

DHAKA (Reuters) - China has agreed to help finance a $8.7 billion deep-sea port in Bangladesh and set up road and rail links between the two countries, Foreign Minister Dipu Moni said on Monday.

"The details of the financing will be worked out in follow up meetings of the officials of both the countries," Moni told reporters during a briefing on the outcome of Prime Minister Sheikh Hasina's visit to China last week.

China was interested in the projects as Beijing wants to use the port in Chittagong city as an outlet for its southern Yunnan province, she said.

"The deep-sea port is a big and costly project, so several countries are likely to come up for financing the plan," she said without giving details.

Moni said: "We have successfully obtained Chinese pledges of assistance for the deep-sea port and connectivity between Kunming and Chittagong."

Bangladesh has been trying to get Chinese assistance for the proposed deep-sea port in Chittagong for months. Hasina has also agreed to allow India, Nepal and Bhutan use Chittagong port to boost regional trade and cooperation.

The government says use of the port by neighbours would generate revenue and help development. The opposition Bangladesh Nationalist Party has said it is a sell-out to large neighbour India and has called for the deal with New Delhi to be scrapped.

The impoverished south Asian country of 150 million people has taken up plans to build the deep-sea port by 2055.

When completed in three phases, the deep-sea port will have the capacity to handle 100 million tonnes bulk cargo and 3.0 million twenty-feet equivalent unit (TEU) containers annually.

Presently, Chittagong port handles 30.5 million tonnes of bulk cargo and 1.1 million TEUs annually.

China also pledged assistance in building a road and rail link between Kunming, the capital of Yunnan, and Chittagong via Myanmar, Moni said.

Bangladesh and Myanmar signed a deal in July 2007 to construct a 25 km road to connect the two countries and construction will be completed soon.

China is Bangladesh's biggest trade partner with annual turnover worth nearly $5 billion -- with the balance heavily in Beijing's favour. officials said.

(Reporting by Nizam Ahmed: Editing by Anis Ahmed)