Indo-Bangla meet: Talks on transit and water issues
Abu Reza
THE Indian high commissioner's observation that transit rights through
Bangladesh is essentially an economic issue, not political, is, prima
facie,
correct. In view of this, and to extend friendly cooperation in the area
of
transit trans****t, Bangladesh, after gaining independence in December
1971,
restored the "Protocol on Inland Water Transit and Trade" in 1972, which
was
suspended by the Pakistan authorities after the Indo-Pak war of 1965.
This protocol allows India to make full use of the most im****tant and cost
effective transit operation on as many as eight inland waterway routes.
India is making the most successful use of the facility, as the phenomenal
increase in India's transit traffic through Bangladesh since 1972 will
bear
out.
Scope for further cooperation, no doubt, also exists in a mutually
beneficial manner, not merely between India and Bangladesh, but also in
the
entire region, between South Asia and East Asia. In the immediate context,
however, the concerned Saarc countries can tremendously benefit through
cooperation in the area of transit trans****t to promote trade, trans****t
and
tourism.
Within Saarc, cooperation between India, Nepal, Bhutan and Bangladesh, can
be more easily enhanced. In fact, India, Nepal and Bhutan can particularly
benefit from the low cost Bangladesh inland water trans****t facilities, as
the Indian experience will confirm.
There is urgent need for Indian consideration to allow Nepal-Bangladesh
and
Bhutan-Bangladesh road transit to operate up to the river heads in
Bangladesh, whereby these two countries can benefit from low cost
Bangladesh
inland water trans****t and sea ****ts. So, a combination of road and
waterways, through India and Bangladesh, would enormously benefit the two
land-locked countries, thus lessening the burden on the Calcutta ****t.
Bangladesh has made enormous, dispro****tionate investment in highway
construction to enhance inter-district connectivity by road, perhaps
ignoring the full potential of inland water trans****t, which offered
relatively low trans****tation cost on many of the comparable routes.
Nonetheless, the standard of its highways remains poor and dangerous
compared to the minimum standards adopted for any international highway,
in
Thailand for instance.
The recent World Bank study on Revival of Inland Water Trans****t would
confirm that the prospect of inland water trans****t is enormous in
Bangladesh. Therefore, demand for transit through Bangladesh by India,
Nepal
and Bhutan, can be met for a much higher level of traffic if the depth of
Bangladesh rivers can be increased with cooperation from India.
The withdrawal of waters by erecting barrages across almost all rivers,
including the Ganges, has been detrimental for everyone, including India's
interest in terms of securing year-round transit facility from the low
cost
inland water trans****t system. There is a possibility that larger vessels
can be used at lower unit cost throughout the year. For Bangladesh, it has
been an economic disaster. Bangladesh must, therefore, raise this issue in
the meeting on transit and water in Delhi.
Also, the Bangladesh highway system, as its very low standard of safety
would confirm, is not fit for heavy road transit traffic. Besides, the
high
cost of fuel and steel, which are likely to go even higher, will make road
trans****t operation increasingly more prohibitive for all the countries,
apart from the environmental damage that heavy road traffic would inflict
on
the country.
Bangladesh has no aggregate, thus, road building based on im****ted
aggregates and bitumen, among other im****ted items, will make road transit
haulage less viable economically. However, there are many other technical
issues, which would need in-depth examination by the concerned experts.
Thus, for everybody's interest, the Bangladesh inland water trans****t
system
should be urgently revived.
India can make the most im****tant contribution by releasing not only the
agreed upon quantity of water but also by augmenting its discharge. In the
coming Delhi meeting, Bangladesh should make a special plea for India's
cooperation in this respect, on economic grounds alone.
India's recent request for gas pipeline transit from Myanmar to India
through Bangladesh should have been subjected to detailed technical and
financial study for mutual benefit. Bangladesh will itself need, before
long, to im****t gas from Myanmar. The gas pipeline could easily attract
foreign private investment, and on a BOT (build, operate and transfer)
basis
Bangladesh could become the potential owner of the pipeline at a future
date.
Given a captive market and safe investment, everyone concerned could
benefit. India could obtain gas without having to invest in the pipeline,
and Bangladesh could easily attract foreign private investment on a BOT
basis, and, given the long life of the facility, it could earn an enormous
amount of rental and transit income for many years in the future.
Bangladesh
may still explore this possibility in the forthcoming meeting by way of
offering cooperation in transit facility to India for the Myanmar gas.
It is just such an investment in the infrastructure field, where one
country
makes investment through BOT, thus acquiring owner****p of the assets at a
future date that brings benefits to itself as well as to its neighbours at
a
low marginal cost. Given an appropriate regulatory environment,
non-recourse
financing in the shape of foreign private investment can easily be
attracted.
The operation is literally in a captive market, with virtually no risk and
uncertainty, and assured rental and transit income will generate
sufficiently strong cash flow for the investor to recoup the investment
with
profit within, say, twenty years and, beyond it, Bangladesh would become
the
sole owner of the transit asset (facility).
Everyone is the winner, including India, which will get transit without
having to invest in the pipeline. In passing, it can be said that what
applies to a gas pipeline project is equally valid for the Tata proposed
steel and fertiliser factories. The BOT approach should be one of the
options considered.
There are relevant UN conventions to which all the concerned countries are
parties. Conceivably, a Saarc version of a convention allowing for the TIR
(Trans****t International Routier) Carnet and TIR Carnet du Passage en
Doune
may be adopted in the inland waterway transit field, which could be
undertaken under the auspices of Saarc and be applicable in the entire
Saarc
region, from Bangladesh up to Afghanistan.
It may be apt to remember that Switzerland is a landlocked country, but
the
Europe-wide transit trans****t regulatory framework is so efficient that
the
Swiss do not suffer from any geographical disadvantages. Similarly, the
Mekong countries comprising Cambodia, China, Laos, Myanmar, Thailand and
Vietnam have recently adopted a region-wide transit trans****t framework
for
the benefit of all. India can, in fact, give leader****p whereby, to begin
with, the eastern part of Saarc countries can move towards a more
economically efficient transit trans****t regime. Then, when the
Indo-Pakistan conflict over Kashmir is amicably resolved, all the Saarc
countries including India will have easy access up to Afghanistan, in fact
up to the whole of Central Asia.
A scenario can be envisaged whereby India could be a potential transit and
trans****t bridge between East Asia and Central Asia. This is a possibility
that needs to be addressed with vision, leader****p and willingness to
share
and give. The fundamental basis of such an international trans****t regime
is
mutual economic benefit to all, at which the Indian High Commissioner has
rightly hinted.
This is the message the Bangladesh delegation should take to Delhi, make
its
presentation at the technical level, buy time to undertake detailed
technical economic studies of the various propositions and, thus, lay a
basis for fuller and more fruitful discussion with the elected leaders of
the concerned countries in the not so distant future. Let us hope.
Dr. Abu Reza is a trans****t economist and a former World Bank economic
advisor to Kenya.
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