Transport Connectivity

in South Asia and Beyond

Asian Institute of Transport Development

High-Level Policy Dialogue on

Challenges facing the Sub-Region 15-16 December 2011, New Delhi

Past to Ponder

In the sixteenth century, the Indian sub-

continent comprising much of South Asia

accounted for about a quarter of the world’s

GDP. By the middle of 20th century, this share

had declined to barely 2 percent.

In the last 20 years, South Asian countries have

just doubled their per capita income; China has

increased it six times; and the rest of East Asian

countries have trebled or quadrupled theirs.

Regional cooperation has not delivered either on

promise or potential. Hostage to closed and

divisive mindsets, distrust of neighbours and

institutional insensitivity to high incidence of

poverty.

Restrictive policy regimes have neutralized the

beneficial effects of common cultural affinity,

common geography, and the ‘gravitational’ pull of

proximity on movement of goods and people.

Presently, South Asia has the least reported intra-

regional trade of any developing country

grouping.

Snapped Links and Consequences

Division of the sub-continent led to creation of

extensive land borders (7419 km), mostly unnatural

and porous disrupting geographic space, economic

and transport linkages.

Rail and IWT transit across the then East Pakistan

continued till 1965 and was then suspended. Only

IWT transit restored in 1972. Transit through

Pakistan stands suspended.

Border management led to closure of historical land

routes at several points. North-East India virtually

became a landlocked territory.

Present levels of connectivity and services are a

mere reflection of the restrictive policy regimes.

Six decades have seen only half-hearted steps to

restore some of the transport linkages. Land

transport facilitation agreements still not

finalized.

Meanwhile, incompatible transport technology

platforms have emerged, impairing

interoperability of cross-border services,

particularly of rail transport.

Half-hearted and Faltering Steps

Economic Cost of Disruption

In 1948, intra-South Asia trade was 18 percent of the

total trade and today’s border area were relatively

wealthy. By 2010, this share dropped to mere 6-7

percent.

Trade transaction costs are high ranging between

13-14 percent of the commodity value compared to

7-8 percent in developed countries.

Additional burden on transport costs due to

bottlenecks at land crossing stations between

Bangladesh and India work out to US$ 8 to 10 per

tonne of freight.

A 20’ container takes at least 30 days to move

between New Delhi and Dhaka via circuitous

routes, and costs around US$2500, but by land

transport it could reach its destination in about 5-

6 days with around one fourth of the cost.

Large volume of trade between India and Pakistan

is routed through Dubai.

Skewed transport interchange matrix between

Bangladesh and India is a classic example of the

closed mindsets.

Element Rail Road Waterways Ropeway/

Conveyor Belt

Transit through

Bangladesh*

Presently not allowed. Presently not allowed. Allowed. There is a protocol

between the two countries on

Inland Water Transport and

Trade (04/10/99), derived

directly from the provisions of

Article VIII of the Trade

Agreement.

N. A.

Access of vehicles/

vessels across the

border

Goods trains from India

are allowed upto the next

station across the border.

While the locomotive is

returned with or without a

load, wagons are left

behind for commercial

handling, for which the

Bangladesh Railways pay

detention charges to

Indian Railways.

Different practices prevail: in case of

Petrapol-Benapol interchange point, road

vehicles are permitted up to the customs

warehouses in Benapol situated one km

away from the border.

At Dawki-Tamabil interchange point, road

vehicles carrying coal permitted up to coal

dump at a distance of three km from the

border.

Vessels belonging to the two

countries permitted to ply over

the designated waterway

routes and up to the

designated riverine terminals.

Transportation of cargo is

shared equally between the

two countries.

There is a seven km long

elevated conveyor belt of Lafarge

Umiam Mining Pvt. Ltd. from the

crusher site of the company,

passing along a 40 metre wide

strip of land comprising villages

of Phlangkaruh, Bamantilla and

Umkhaba on the west and

Pyrkan, Kalatek villages and river

Umiam on the east to Mantrikhal

village of Bangladesh

Passport requirement

for the crew

Yes No Yes N. A.

Visa requirement for the

crew

Multiple entry visas valid

for a period of one year

are granted to the railway

staff to be on duty in

connection with

interchange of rail traffic.

At the Petrapole-Benapole interchange

point, the truck crew are allowed up to the

warehouses without any passport or

official permit.

In case of Dawki-Tamabil interchange

point, the Bangladesh customs authorities

issue a temporary permit valid for

specified hours impounding the driving

licence of the truck driver.

Officers supervising or

controlling the fleet of the

operators in either country are

required to carry passports

endorsed with multiple entry

visas. For personnel manning

vessels, no visa required.

N. A.

Note : 1.* Article VIII of the trade agreement lays down: “the two governments agree to make mutually beneficial arrangements for the use of their waterways, roadways and

railways for commerce between the two countries for passage of goods between two places in one country through the territory of the above.”

2.** Limestone and shale transportation over a 17 km long belt conveyor from a query in Meghalaya to Sunamgarh in Bangladesh.

The World Shows the Way

Transport and communications form an

important component of regional cooperation –

ASEAN, NAFTA, MERCOSUR, SADC.

Emergence of Trans-European transport

networks.

Development of new inter-country corridors –

TRACECA (Europe-Caucasus-Asia), ECO.

Iran Develops Rail Network only for

Transit Traffic

Kazakhstan Builds Rail Route to Link

Europe with China

Jordan Developing Rail Links for

Transit Traffic

Asian Highway Route Map

Trans-Asian Railway

Beneficial Impact of Transshipment Traffic

Transshipment traffic would account for trade in

services and thus benefit the trade between the

transit countries.

The additional traffic would improve the viability of

the relatively smaller rail systems which presently

do not have the minimum critical mass.

Experts have estimated about 18 million tonnes of

inter-state and international traffic for Bangladesh

as a transport hub for south and south-east Asian

region.

Recent Initiatives

SAARC multimodal transport study has identified key

priority transport corridors such as:

• Central Asia-South Asia via Afghanistan &

Pakistan

• East Asia-South Asia via Myanmar & Bangladesh

SAARC Declaration of 2010-2020 as decade of intra-

regional connectivity.

Recent agreement on regional connectivity between

Bangladesh and India during 2010.

Recent initiative of Bangladesh to sell seaport

services to Bhutan, India and Nepal.

India has also agreed to provide transit facilities for

traffic from these sea ports in Bangladesh for

destinations in Bhutan and Nepal.

Designating a new port of call and transshipment port

on the inland waterways of Bangladesh for onward

connectivity to Tripura in India.

Allowing bilateral container traffic between India and

Bangladesh to be carried by both rail and IWT.

Extending the Indian Railways network to the inland

container depots in Nepal and Bhutan.

Opening of new trading points along the border

between India and Bangladesh.

Reintroduction of suspended ferry services between Sri

Lanka and India.

Distance does matter, more so in the context of

looming depletion of fossil fuels. Rising freight

charges will give a fillip to the trend towards

making products closer to the market.

Regional rather than global production networks

are likely to become more important in future.

Availability and access to relevant technologies

in the neighbouring countries would be cost-

effective in the long run and would also bring

about harmonization of transport technologies.

Benefits of Proximity

Direction Markers

Pending integration at the regional level, subregional

cooperation could yield substantial benefits.

Subregional building blocks would facilitate long-

term development of regional networks.

There is considerable merit in following a path of

unilateral initiatives as the long-term benefits would

far outweigh the short-term costs.

Restoration of the transport links by rail, road and

waterways would involve minimal investments and

would result in maximum benefits in the shortest

time-frame.

Trans-Asian Railway and Asian Highway networks

would facilitate emergence of new land transport

linkages at the regional level.

Chittagong port provides the most cost-effective link

for the North-eastern part of India.

Restoration of exchange of goods and produce of local

economies would mitigate the hardship of the people

living along the borders.

Need for providing road links to the informal markets at

the borders for exchange of goods and produce.

In the eastern and north-eastern parts of the sub-

continent, riverine routes can provide a cost-

effective and environment-friendly mode.

Projects that have a regional footprint like a bridge

over river Jamuna should be treated as regional

projects so as to reflect the larger gains to the

economies.

Multilateral bodies should prepare and fund transport

projects on inter-country network basis.

Overland multimodal transport infrastructure should

be encouraged to gain benefits in terms of cost

reduction, speedy and safe movement of goods.

Fuller benefits of infrastructure facilities cannot

be achieved unless parallel measures are taken to

improve procedural and operational efficiency.

A set of international conventions and

agreements which facilitate cross-border

movements by different modes of transport have

evolved over the past 50 years and have been

operationally tested in Europe and other member

countries of the United Nations.

Softer but Important Measures

An “off the peg” system is available with the added

advantage that the necessary documentation has

already been developed. This provides an

opportunity to compress the time-scale to evolve a

framework for land transport facilitation in South

Asia.

The international conventions describe general

principles and leave the details to be agreed on a

bilateral or multilateral basis. They do not cause any

infringement of the sovereignty of the country.

Railways and inland water transport should be

promoted in the sub-continent keeping in view their

relatively benign impact on environment and the

growing scarcity of fossil fuels.

Changes in technology and operating environment

require far-reaching transformations in the skill set of

the personnel.

Relatively smaller systems do not have the necessary

wherewithal to support training institutions in all

disciplines. Apparent need for cooperative effort in

the area of human resource development.

Promotion of Socially Beneficial

Modes of Transport

NGO Initiatives

Regional cooperation need not be only at the

government level. Non-government organisations

having a regional base also have an important role

to play.

UNESCAP Ministerial Conference (2006) noted with

appreciation the valuable role of the Asian Institute

of Transport Development in arranging training

courses for railway personnel from South and

South-East Asia to assist in the development of the

Trans-Asian Railway network.

Asian Railways Association established to

promote cooperative research, harmonization of

hardware technologies and operational practices.

Nurturing merit and talent through award of

scholarships is one of the noblest initiatives of

AITD. Programme has been extended to South

and South-East Asian countries.

Need for building an adequate corpus with

contributions from the member countries to

support the programme on a long-term basis.

AITD’s Contributions

Mobilization of Resources

Extension of line of credit by member countries for

executing transport projects.

Resources provided by multilateral funding agencies –

ADB, World Bank, etc. – for infrastructure development.

Garnering of funds through the mechanism of public-

private partnerships.

Mobilization of additional resources by levy of a fee on

EXIM traffic to be used for upgradation of facilities at

the borders.

Setting up of a dedicated infrastructure fund with

contributions from the member countries and

multilateral bodies.

South Asia and Beyond Linkages

Transport projects are an essential component

under various regional groupings (SAARC,

BIMSTEC, Mekong-Ganga Cooperation). Need for

their integration.

Trans-Asian Railway and Asian Highway

networks would provide the regional linkages.

Need for countries to sign operational

agreements.

Bilateral or sub-regional initiatives would be

instrumental in providing the necessary

connectivity.

Some of the initiatives underway are:

• Kaladan multimodal transport project between

Indian ports on the eastern seaboard and

Sittwe Port in Myanmar and its inland

extension.

• Upgradation of inter-country road linkages like

Tamu-Kalewa-Kalemyo road in Myanmar.

• Revitalization of Stillwell Road from Ledo in

India to Myanmar.

• Pakistan-Iran rail link (Karman-Zahidan).

New Silk Route

The idea of a ‘New Silk Route’ linking South Asia to

Central Asia via Afghanistan to revive the land links

that are nearly 2500 year through a network of routes

that moved merchants and preachers, goods and

ideas across the vast Eurasian landmass.

For Kabul turning Afghanistan into ‘Asia’s

roundabout’ is at the heart of the strategy to make it

economically self sustaining.

Building a New Silk Route has become a major

component of the global strategy to secure

Afghanistan’s future beyond 2014.

The Take-away

Transport networks are basic instruments for

economic growth and poverty alleviation. Make

use of infrastructure already in place in the region.

Make borders irrelevant and aim at integrated

seamless South Asia.

Promote investment in inter-country

infrastructure. Develop socially beneficial modes

of transport.

Regional rather than global production networks

are likely to become more important in future.

Take advantage of pull of proximity on movement

of goods and people.

Historic opportunity to be a part of resurgent

Asia. Noticeable shift in epicentre of trade from

West to East.

Regional integration would strengthen

democratic polity that has emerged in South Asia.

Technical issues must not be held hostage to

antagonistic political environment.