Bangladesh has a coast line of 710 km along the Bay of Bengal. In spite of having a vast coast line, there are only two sea ports (Chittagong and Mongla Port) through many usable channels are there. International sea born trade of Bangladesh has been using these two sea ports, with about 92% passing through Chittagong Port and rest are being done by Mongla Port. Due to the increase demand of the high growth population, the existing sea ports are experiencing tremendous pressure. Moreover movement of containers and cargos through Chittagong and Mongla ports will be increasing exponentially as the consequence of transit trade.

With the existing growth and potential increase in container and bulk cargo, the need for a third sea port with appropriate location and proper facility has been put in the highest priority of the government for enhancing the performance of sea born trade in the country. For this purpose, the government has developed the Payra Port at Kalapara of Patuakhali district.

Ministry of Shipping (MOS) has decided to develop 4 components of the port through Public-Private Partnership arrangement and has received approval from CCEA accordingly. PPP Authority engaged IIFC for the provision of commercial, financial and transaction advisory services for appointment of a Private partner for development of a Coal Terminal on 500 acres of land. Five (5) coal-based power plants 2x660 MW each are in the pipeline to be operational. All are located near the channel. Government has set a target of at least one terminal by 2020.

The proposed site is on the west bank of Rabanbad channel in Patuakhali district.