Infrastructure and Logistics Gaps to Regional Trade and Cooperation in South Asia Region
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Transcript of Infrastructure and Logistics Gaps to Regional Trade and Cooperation in South Asia Region
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Infrastructure and Logistics Gaps to Regional Trade and Cooperation in South Asia Region
12 June, 2013
World Bank, Washington DC
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SAR also lags behind other regions in terms of logistics performance…
especially among the landlocked states/regions
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In 1909, freight could move by rail and road seamlessly from Karachi to Lahore to Delhi to Dhaka
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In 2013, lack of regional transit agreement leads to significant inefficiencies in transport routes used for trade
A container takes 35 days to get from New Delhi to Dhaka Rail: New Delhi-Bombay Maritime: Bombay-Colombo/Singapore-
Chittagong Rail: Chittagong-Dhaka
5 days transit time via direct rail connectivity from New Delhi to Kolkata over Jamuna Bridge to Dhaka
Current Potential
A container travels 7162km to get from Dhaka to Lahore using Maritime Route
2300km overland through India
A container traded between Afghanistan to India must travel through ports in Iran
Overland transit through Pakistan would shorten distances significantly
Assam tea travels 1400km to get to Kolkata PortGoods from Agartala (NE India) travel 1645km to reach Kolkata Port
The southern border of Tripura State of NE India is only 75km from Chittagong Port if travel through Bangladesh is permitted
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Country Rail Network (Total Route
Km)Bangladesh 2,835
India 63,974Pakistan 7791Sri Lanka 1463
Source: World Development Indicators
The rail network in SAR Major trade corridors in India, Pakistan and Bangladesh are
connected to rail networks But the landlocked states have no rail network Gauge differences, missing links, insufficient equipment and
incompatibility but most of all lack of transit agreement prevent seamless cross-border movement
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Challenges along SAARC Rail Priority Corridor 1:Lahore-Delhi-Kolkata-Dhaka-Mahishasan-Imphal
PR financial and ops problems, trains return
empty to AmritsarShortage of airbraked locos
and wagons. Only BCX covered wagons permitted. Train interchange daylight
only. No thru transit – transloading required
Kolkata: Long dwell time
Insufficient capacity at Jamuna Bridge
Rolling stock and gauge differences.
Shortage of locos and wagons. Only BCX
wagons allowed. Train interchange daylight
only
Ranaghat-Gede: duplicative
inspection, rake marshalling/
deconsolidation, shortage of locos
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Challenges along SAARC Rail Priority Corridor 4:Birgunj/Raxaul-Katihar-Rohanpur-Chittagong with links to Jogbani and Agartala
Missing rail link at
Jogbani-Biratnagar,
gauge incompatibilit
y
Missing rail link at
Akhaura-Agartala,
gauge incompatibilit
y
Rohanpur-Singhabad: gauge
differences, insufficient BR rail
lines cause deconsolidation, shortage of BR
locos
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Country Total Roads (Km)
Paved roads as
% of total roads
Road Density
(km of road per 100 sq km
of land area)
Afghanistan
42,150 29.30 6.0
Bangladesh
239.226
9.50 14.8
Bhutan 8.050 62.0 18.0India 4,109,5
9249.5 125.0
Maldives 88 100 29.0Nepal 19,875 53.9 14.0
Pakistan 258,350
65.4 32.9
Sri Lanka 97,286 81.0 173.9Source: Latest World Development Indicators, 2008-10
Bangladesh, India, Pakistan and Sri Lanka have extensive road networks; road density highest in India and Sri Lanka
Landlocked States: Afghanistan, Bhutan and Nepal, have limited networks and lower levels of access.
Most countries need to increase proportion of paved roads
Main roads on major trade corridors narrow and of low quality: < 10,000km are multi-lane.
All ports were served by two lane roads with high traffic flows competing with pedestrians, bicycles, non-motorized vehicles, especially around urban areas.
The road network in SAR
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Priority SAARC Road Corridors CORRIDORS COUNTRIES
1 Lahore–New Delhi–Kolkata–Petrapole– Benapole–Dhaka (2,322 kms) - Agartala
Pakistan, India, Banladesh
2 Kathmandu–Birgunj/Raxaul–Kolkata/ Haldia
Nepal, India
3 Thimphu–Phuentsholing–Jaigon– Kolkata/Haldia
Bhutan, India
4 Kathmandu–Kakarvitta–Phulbari– Banglabandha- Mongla (1,362kms) or ii) Dhaka–Chittagong (1,442kms)
Nepal, India, Bangladesh
5 Sandrop Jongkhar–Guwahati–Shillong– Sylhet–Dhaka–Kolkata
Bhutan, India, Bangladesh
6 Agartala–Akhaura–Chittagong
Bhutan, India, Bangladesh
Wagah-Attari: transloading, no customs at border, insufficient border post infrastructure, positive list of 137 products, duplicative and manual procedures, no EDI, no thru transit of Afghan-India bilateral trade
Raxaul-Birgunj: transloading, duplicative and manual procedures, no EDI
Petrapole-Benapole: transloading, 600 trucks/day, 80% of bilateral trade, duplicative/manual procedures, no EDIBarasat-Petrapole narrow congested road section
Phulbari-Banglabandha: Nepali and Bangla goods must move by convoy thru Indian territory
Mongla and Chittagong Ports insufficient capacity, rail missing link at Khulna-Mongla
No transit through Bangladesh for Indian goods from Kolkata to reach NE through Petrapole-Benapole-Akhaura-Agartala
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Indo-Bangladesh IWT Protocol Route
Ashuganj Port needs better terminals, equipment, operations, Need rail connectivity from Tripura
Akhaura could soon become one of the main doorways to a $1billion/year trade corridor, but need wider approach roads on both sides, India building ICP
Short term of Bilateral Protocol prevents private sector investment; no night-time navigation permitted; dredging needed esp Nov-May; more and better navigational aids, cargo handling equipment and terminals needed, esp in Bangladesh
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Infrastructure Gaps exist but the real challenge is no freedom of transit, protectionist policies and NTBs
Rail Road IWTGauge/
Equipment Standards
Harmonization
TIR CarnetMotor Vehicle Agreement
Road Design Harmonization
Longer-term IWT Protocol/
Agreement
Regional BondThrough Bill of Lading
Customs Simplification, Harmonization, and Cross-border Cooperation
Simplification, Harmonization and Mutual Recognition of Quality and Technical Standards
Removal of NTBs (rules of origin, standards, etc..)Restrictive Trade Agreements (positive list, etc..)
In addition to investments in infrastructure, High Impact Solutions include:
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Political Economy ConsiderationsLevel Issues
Global - China vs. India competition for spheres of influence
- Smaller countries benefit from cheap capital/investments
Regional Countries using transit rights as political or negotiation bargaining chip
National Ethnic tensions and political disputes within national boundaries, lobbying power and resistance to change by vested interests
Subnational-Local
- Corruption by officials and informal groups
- weak regulation/monopolies (e.g. trucking services)
Corridor managemen
t
Economic
cluster
• Road and Rail Transport services
• Customs and border management
Gateway /
Economic cluster
Mode interfac
e
Dry portICD
• Seaport and shipping• Access to
port• Transit• Customs
and border management
• Vehicle change
• Customs and border management
• Storage• Consolidati
on• Clearing
and forwarding
International transit National transit
Seaport/Economic cluster
• Air freight• Customs
and border management• Transit• Clearing
and Forwarding
Bord
er
Institutions
Services
Infrastructure
A corridor approach focuses implementation efforts on one particular geographical area while addressing multiple sources of congestion –a supply chain is only as good as its weakest link
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Challenges along a typical SAARC Priority Corridor:Kolkata/Haldia-Raxaul-Birgunj-Kathmandu: Road and Rail
Challenges: Long dwell time at
Kolkata/Haldia ports Bilateral transit agreement limits
Nepali transit to only one corridor, and only containerized cargo for rail
Poor and narrow roads in Nepal and India
No rail link in Nepal No through bill of lading and
inland clearance Duplicative domestic
licensing/documentation Duplicative and manual customs
procedures Corruption/informal payments at
border and along road corridor No cross-border electronic data
interchange No mutual recognition of
collaboration on SPS and standards
Insufficient parking/warehousing facilities
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A Corridor Approach to tackle multiple sources of congestion along a supply chain
Strengthening Bilateral Coordination Mechanisms Strengthening National Multi-Sector Coordination
Mechanisms: Role of National Trade and Transport Facilitation Committee (NTTFC)
Tacking Complex Multi-sector Project in a Weak Capacity Environment: trust fund support essential, significant resources devoted to capacity support during project preparation
Relationship and Confidence building◦ Big vs. Small country: letting smaller country take the lead and
provide capacity/knowledge support◦ Showing early signs of success: the project design focused on
showing early results (low hanging fruits) as well as long-term success◦ A regional study tour was key: to forming amicable relationships
away from the negotiating table
WB Approach and Lessons
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Nepal-India Regional Trade and Transport Project
Component 1Modernize transport
and transit arrangements
between Nepal and India
TA for modernization of bilateral trade and transit framework
Automating of Customs Transit Document
Transport management regulations
- Axle load control
- Road safety
Component 2ICT systems to
automate processes for
documents related to imports, exports
and transit
Single Window Trade Portal PCO/NTTFC
Institutional Strengthening
Component 3Trade-Related Infrastructure
Expand and upgrade the Narayanghat-Mugling road
Kathmandu Inland Clearance Depot (ICD) Development
Birgunj and Bhairahawa ICD Improvement
Multi-agency Labs
Joint IDA-IFC Project: $101 million: financing $99m IDA, $2m IFC parallel co-financingFirst regional trade and transport facilitation project in South Asia RegionNegotiations: May 17, 2013, Board: June 28, 2013PDO: decrease transport time and logistics costs for bilateral trade between Nepal and India and transit trade along the Kathmandu-Kolkata corridor for the benefit of traders by reducing key infrastructure bottlenecks in Nepal and by supporting the adoption of modern approaches to border management.