On a sustainable development trajectory -- Mohammed Farashuddin Steering the economy in 2010 -- Professor Mustafizur Rahman Food Prices and Security Exploding myths, highlighting lessons -- Rizwanul Islam Rising inequality takes shine off growth --M M Akash Rural financing ~ the innovative way -- Khondkar Ibrahim Khaled Participation and representation key to pro-poor planning -- Fahmida Khatun Why list on a stock exchange? -- A.F.M. Mainul Ahsan Pushing agriculture forward -- Dr. Quazi Shahabuddin Policy choices in the FDI domain -- Syeed Ahamed Capital market window to faster growth -- Abu Ahmed Regional Connectivity-Indo-Bangla initiative -- Dr. M. Rahmatullah Foreign banks' lively role -- Mamun Rashid Why regulatory reforms? -- Zahid Hossain Energy management issues -- M. Tamim Jute bubble, lest it bursts! -- Khaled Rab Climate Change Policy Negotiations-Can Bangladesh play a leading role? -- Dr. Saleemul Huq Copenhagen and beyond --Dr. Atiq Rahman Save Bangladesh, save humanity -- Dr A. M. Choudhury For a human rights-based approach -- Dr Abdullah Al Faruque Gender dimension to policy on disaster management -- Mahbuba Nasreen Rainwater harvesting -- Dr. Manoranjan Mondal Environmental degradation and security -- Dilara Choudhury Climatic impact on agriculture and food security -- Prof Zahurul Karim PhD Monoculture destroys coast and forests --Philip Gain Towards a strong adaptation strategy -- Md. Asadullah Khan Biodiversity conservation: Challenge and opportunity -- Mohammed Solaiman Haider Grameen Shakti's renewable energy role -- Abser Kamal

Regional Connectivity
Indo-Bangla initiative

Dr. M. Rahmatullah

Amirul Ragiv

The surface transport networks in South Asia still continue to remain fragmented due to various historical, political and economic reasons as well as lack of cooperation among the member countries. As a result their potential as engines of economic growth at the regional level remains largely unrealized. This is happening despite the fact that the basic infrastructure and facilities to establish mutually beneficial intra- and inter-regional transport linkages already exist in many countries.

To address some of the connectivity problems, Bangladesh and India took certain initiatives recently and signed a joint communiqué on January 12, 2010 to strengthen cooperation covering wide ranging issues with emphasis on trade, transport connectivity and water sharing.

In order to assess the likely impacts of the various understanding reached with India, it is important to evaluate the present state of Bangladesh Transport System and consequences of non-cooperation among neighbours. Indicated below is a brief picture of the present state of different modes.

Present state of the transport system

Indian freight trains travel only up to the border stations inside Bangladesh and Bangladesh Railway (BR) locomotives then pull the Indian wagons up to a short distance inside the country where transshipment takes place. BR wagons also do not cross the Indian border, as the rolling stock is incompatible with the air-braked stock of Indian Railways. Present load restriction over Jamuna Bridge in Bangladesh prohibits the movement of broad gauge fully loaded wagons across the bridge, although a dual gauge railway network now exists up to Dhaka. Recent investigation, however, revealed that ISO containers on low platform BLCA/BLCB flat cars having a floor height of 1009 mm can be allowed over Jamuna Bridge, without any load restrictions.

Road transport has been playing a dominant role carrying bilateral trade between Bangladesh and India. Nearly 70-80% of all overland trade between Bangladesh and India passes through Benapole/Petropole border point. However, the only road connecting Benapole/Petrapole with the Kolkata is still 5.5 metre wide, and highly congested.

In the context of Nepal-Bangladesh, although India has allowed a route (by road) between these two countries across the “Chicken Neck” for bilateral trade, yet goods are required to be transshipped at Banglabandh border point. This route is more than 1300 km long, as such not very cost-effective, consequently very little used. Since this route cannot be used for third country trade, Nepal's export and import traffic uses Kolkata port, which is often congested compared to Bangladesh seaport of Mongla, which has spare capacity and a direct broad gauge link with Birgunj (Nepal) through Rauxal Indian border point. But for this route and Mongla port to be used for third country trade of Nepal, India has to agree to such transit arrangement.

Inland Water Transport (IWT)
Before partition of India in 1947, trade of NE-India used to move through the territory of what is now Bangladesh. Even upto 1965 (Indo-Pak war), transit through rail and Inland Water Transport (IWT) was allowed. However, in 1972, after liberation of Bangladesh, a protocol was signed between Bangladesh and India, and since then transit through IWT was allowed.

Indian transit traffic and Indo-Bangladesh bilateral traffic regularly travel along two designated Inland Water Transport (IWT) Protocol routes across Bangladesh. These routes are highly underutilized, partly due to rapid siltation, lack of sufficient navigational aids, and partly due to limited number of ports of call (4 ports on either side). There is no inter-country passenger movement by IWT.

Passenger movement

Limited movements of passengers are taking place between India-Bangladesh, both by rail and road transport (buses). Passenger movement by rail between Dhaka and Kolkata started again through the launching of Moitri train (Bangladesh India friendship train) on April 14, 2008 after 43 years. 2-trains operate in each direction during the week-end (Saturday-Sunday), and it is a journey of around 12 hours, which is considered very long, as the distance is only around 400 km. Time taken for customs and immigration, could be saved by introducing “on board checking”.

With regard to passenger movement by bus, there are 2-established routes between India and Bangladesh. The Dhaka to Kolkata and vice versa direct bus operation started in 1999 and has been doing well. The Dhaka-Agartala bus operation started in 2003, but still struggling to be a profitable route. On February 2005, two Bangladeshi private transport companies “Shyamoli Paribahan” and “SR Travels” jointly started the bus service between Dhaka and Shiliguri (Assam) in cooperation with a private sector operator of Indian TATA Sumo microbuses.

Consequences of poor connectivity
Due to poor regional connectivity between Bangladesh and the neighbouring countries/territories namely, India, Nepal, Bhutan and NE-India, all of them, have been losing a great deal in many fronts. For example,

* A container usually takes 30-45 days and costs US$ 2500/= per 20' container to move from New Delhi to Dhaka, as the maritime route is via Bombay and Singapore/ Colombo to Chittagong Port and then by rail to Dhaka. But the same container could have been moved to Dhaka within 4-5 days at a cost of US$ 850/= per 20' container, if direct rail connectivity and container movements are allowed between New Delhi and Dhaka.

* The shipment of Assam tea to Europe is required to travel 1400 km to reach Kolkata port through the “Chicken neck”, since no agreement exists for India to use the traditional route through Chittagong port which could have been shorter by more than 50%, in terms of distance.

* India and Myanmar are jointly implementing “Kaladan project” to link Sittwe port of Myanmar with Mizoram, partly through Kaladan River and partly by road. This would be quite an expensive alternative for India to have access to NE-India via Kolkata Port, Sittwe port, Kaladan River and road, as an alternative to the existing route through the chicken neck. If there was transport cooperation with Bangladesh, India could have used a much shorter route (around 600-700 km) across Bangladesh.

Opportunities for Bangladesh
Bangladesh has a unique geographical location with 2-land locked countries, namely Nepal and Bhutan, 1-territory which is almost landlocked, namely Northeast India at its hinterland (see map). Bangladesh is fortunate to have two sea ports (Chittagong and Mongla) and potential for developing a deep sea port. If regional connectivity is provided by Bangladesh to these hinterland countries and territories including access to its sea ports, tremendous opportunities could have opened up for Bangladesh to trade in “transport services”.

Currently, Bangladesh has large trade deficit with India. Trading in “transport services” with India, for example, could reduce this deficit. In this context, it is crucial to understand clearly that these “transport services” will have no market elsewhere outside this sub-region and that these opportunities of trading in transport services may not continue for long. At the same time, it is also important for the sub-regional countries to recognize that no country other than Bangladesh can provide these transport connectivities and services. The matter, therefore, deserves urgent attention of the policy makers and the Governments concerned. If Bangladesh opens up its transport system to provide regional connectivity, it could emerge as a “transport hub” for the sub-region comprising Bangladesh, Nepal. Bhutan and NE-India. The end result could create a win-win situation for all countries involved. Some of the politicians and policy makers are, however, questioning as to whether there is any authentic estimate of the possible benefits that each of the 4-countries (Bangladesh, Nepal, Bhutan and NE-India) will get if regional connectivities are opened up. Recently, the Centre for Policy Dialogue, Dhaka is in the process of undertaking such a study covering the 4-countries mentioned above.

Bangladesh is fortunate to have Mongla Port with about 80% and Chittagong port with around 40% spare capacity at the present level of efficiency and use of Technology. It has also the potential for developing a “deep sea port”, but its development needs sub-regional patronage.

India has been asking for quite sometime, access of NE-India to Chittagong Port. Similarly, Nepal and Bhutan have been asking for their access to Mongla port for their export and import trade. In order to build friendship and confidence in the minds of neighbouring hinterland countries, (Nepal, Bhutan and India) Bangladesh should consider opening up its transport system to the neighbours through road, rail and IWT links, to make Bangladesh a “transport hub”. This process will make Bangladesh a forward looking country, with connectivity well established regionally. This will definitely enhance the potential of having patronage from the regional countries to establish the Deep Sea Port in Bangladesh.

Issues related to transit and transshipment
Transit/Transshipment has become sensitive issues in Bangladesh. Some people feel that if transit is given to India, it might create security problem for Bangladesh. Before we proceed further, to discuss these issues, it is important to define the terms - “transit”, and “Transshipment”.

“Transit” by definition means “the action of passing through from one place or point to another”. In the North-Eastern sub-regional context, “Transit” refers to movement across Bangladesh territory of Indian goods/containers to and from NE-India, using Indian owned transport fleet. On the other hand, “Transshipment” means transfer of cargo/containers from one form of transport to another. In the context of North Eastern Sub-region, “Transshipment” means movement of Indian goods/containers across Bangladesh using Bangladesh owned transport fleet.


Earlier “transit” used to be a “sensitive term” in Bangladesh, but in the recent years, it is being considered an “economic issue”. Transit, however, is not considered an “issue” only between Bangladesh and India, as providing transit to both Nepal and Bhutan could bring in added benefit to Bangladesh, and this could create a win-win situation for all the four countries of North-Eastern sub-region of South Asia.

Whatever means of transit and transshipment are used, it will be essential to ensure effective independent inspection by appropriate authorities both at entry and exit points to prevent abuse. To ensure security it would be essential to install "Container Scanner" at Sea Ports and major Land ports, together with "weighbridges" to control overloading. This would help in ensuring that no "contraband items" are passing through the land ports and sea ports.

A number of countries in Asia and Europe have been greatly benefited by opening up their port facilities for use by the hinterland countries. For example, Rotterdam Port of the

Netherlands providing access to several land lock countries of Europe (Germany, Austria, etc.) and earning huge amounts. Similarly ports of Bandar Abbas and Chabahar of Islamic Republic of Iran are providing access to 5-coutries of Central Asia, and virtually minting money. If the neigbhouring hinterland countries of Bangladesh are provided access to its sea ports, it can also earn sizeable foreign currency through trading in transport services (port, rail and road transport change, besides transit fees).

How to resolve connectivity issue?
Adopting sub-regional approach

The Asian Highway (AH) and the Trans Asian Railway (TAR) projects of UN-ESCAP have already identified the major road and rail links among the countries of South Asia. Subsequently, the SAARC Regional Multimodal Study (SRMTS) completed in 2006, also identified a number of routes in road, rail and IWT, which could provide efficient regional connectivity.

The connectivity to all the 3-hinterland countries/territories should, however, be conceived within the framework of regional economic integration, where all natural and environmental resources, facilities and opportunities should be exploited for the benefit of all countries in the sub-region. Connectivity, should, therefore, not be taken in a narrow sense, but in a wider sense where it is meant to contribute to economic integration and people to people contacts. In this context, for the access of Nepal and Bhutan's third country trade to Bangladesh ports, there would be a need for Indian Government's agreement, as this traffic will transit through India.

Selection of appropriate mode
In view of the structural limitation of road networks in Bangladesh, most of the regional traffic movement shall have to be moved initially by railway, where there is some spare capacity and further capacity can be created with minimal investment.

Bangladesh national highways are all 2-lanes only, but extensively used. These highways were built based on an axle-load limit of 8.2 tons compared to 10.2 tons axle load limit in India, Nepal and Bhutan. India has now adopted 12 ton axle load limits. Again most of the trucks used in neighbouring countries are usually over-loaded. As such it would not be desirable to allow these overloaded vehicles to move along Bangladesh Road network. Major road network of Bangladesh, however, needs to be upgraded to Expressway standard with higher axle-load limits, as soon as possible. To this end investments from India and other donor countries, as well as private sector investments should be encouraged.

Until the expressways of higher specification are built along national highways in Bangladesh to facilitate movement of high value, perishable goods, following arrangements could be considered.

Option 1:
(a) Inter-district Bangladesh truckers could provide logistic support to carry goods across Bangladesh using multi-axle covered and/or truck-trailers, to carry containers.

(b) Efficient trans-shipment facilities will be needed on both sides of Bangladesh (both on east side and on the west side).

(a) Establishment of a Joint Venture Trucking Company (JVTC), with a fleet of medium sized multi-axle covered trucks, and/or truck-trailers having a special colour (for easy identification and security) to carry transit traffic, with ownership of the company mostly in Bangladesh hand but with shareholders in India, Nepal and Bhutan.

(b) Vehicles of the above joint company will need registration in both Bangladesh and India to facilitate carrying traffic from origin to destination, without transshipment. The company needs patronage of all concerned governments.

The trucks owned by JVTC, should be able to pick up cargo from any part of India, and travel through Bangladesh to another part of India. The types of cargo that can be carried across Bangladesh as transit traffic will, however, be governed by a “positive list” of items which will be compiled to protect some of the infant industries of Bangladesh which have established market for their products in NE-India.

To ensure security and to control overloading of the trucks belonging to JVTC, and the other inter-district truckers, transit traffic should be subjected to sealing by Bangladesh Customs Authorities at the border crossing after inspection, security checks to avoid smuggling, and weight checks to control overloading.

Focusing on a few strategic routes
The SAARC Regional Multimodal Transport Study (SRMTS) recommended a number of routes to strengthen connectivities among the countries and territories of North-Eastern sub-region of South Asia. Out of these, the following routes could be opened immediately to facilitate movement of goods and passengers.

Rail Routes
1. Rail Route-1: Mahisasan-Kulaura-Chittagong with a rail link to Agartala (See Map)
2. Rail Route-2: Gede/Darsana-Jamuna Bridge Tongi Kulaura - Mahisasan with a link to Agartala
3. Rail route 3: Birgunj-Raxaul-Kathihar-Rohanpur-Mongla Port

Road Routes
4. Road Route-1: Petrapole Jessore-Dhaka (via ferry Sylhet- Tamabil (with a link to

5. Road route 2: Kathmandu-Kaharvitta-Phulbari-Banglabandha-Mongla
6. Road route-3: Thimphu-Phuentsholing-Jaigon-Chengrabandha-Barimari-(Chittagong (966 km), and (ii) Mongla (880 km)

IWT Routes
7. IWT Routes: Kolkata-Raimongal-Mongla-Narayanganj
(a): Aricha-Pandu; and
(b): Bhairab Bazar/Ashuganj-Karimganj

Impacts of recent joint initiative taken by Bangladesh and India

Nicholas Pitt/getty Images

A joint communiqué was issued following the Bangladesh-India Summit held in New Delhi on 11-12 January 2010. Strengthening regional transport connectivity was one of the areas which received priority attention from the Summit. The joint communiqué has opened up a whole range of opportunities for Bangladesh, to establish itself as a well connected country within the region. As a result, Bangladesh will be able to trade in transport services with its neighbours and earn sizeable foreign exchange in terms of port charges, rail charges, road charges and transit fees. This would provide an opportunity to Bangladesh to reduce the trade gaps with India. Once the connectivity to and from the Bangladesh ports, to the neighbouring countries are established properly, confidence building between Bangladesh-India and other hinterland countries will begin. To remain competitive regionally as a country trading in transport services, Bangladesh will be required to modernize its overall infrastructure network. This would greatly enhance attractiveness of Bangladesh as a destination for FDI.

Opening up of the port facilities to neighbouring countries will greatly enhance patronage for Bangladesh's Deep Sea Ports project at Sonadia south of Chittagong. In the context of regional connectivity, some of the major areas where understanding has been reached to open up transport facilities both bilaterally and sub-regionally include the following:

(1) Allowing the use of Mongla and Chittagong Sea Ports by Nepal, Bhutan and India for movement of goods by road and rail.

(2) Facilitating movement of bilateral trade in containers, to be carried by rail and water transport, between India and Bangladesh.

(3) Making available Rohanpur/Singabad-Kathihar-Rauxal-Brigunj broad gauge rail link for transit traffic between Nepal and Mongla Sea Port, and Nepal-Bangladesh.

(4) Construction of Akhaura-Agartala rail link.
(5) Ashuganj river port to be designated as a new port of call, and allowing it to be used for one-time or longer term transportation of Over Dimensional Cargo (ODC), for onward movement to Tripura.

Some of the implications of the above joint decisions on Bangladesh could be as follows:

Use of Chittagong Port by NE-India
The NE-India is virtually a landlocked territory of India. On average, goods from NE-India need to travel around 1500 km to use Kolkata port. Access of NE-India to Chittagong port would mean an average travel distance of 600-700 km and that of Tripura, a distance less than 300 km.

An assessment of the capacity of Chittagong port revealed that based on the present level of management efficiency and technology used in handling containers, it has still 40% spare capacity. There is enough scope for further enhancing the management efficiency and introduction of more gentry cranes, to increase the handling capacity of Chittagong port appreciably.

For the time being, there could be some capacity constraints in Chittagng-Akhaura section of the railway.

But with the implementation of double trucking projects, which are underway, this constraint will be over.

With regard to road link between Chittagong Port and NE-India, it is important to note that Bangladesh road network has only two lanes and it has structural weakness, only two lanes. As such it would not be desirable to allow heavy (often overloaded) Indian trucks to ply on these roads. Until expressways are built along major national highways, Bangladesh road transporters should, extend the logistic support to carry the regional traffic using medium sized multi-axle covered vans/truck-trainers.

Use of Mongla Port by Nepal, Bhutan and India
Currently Nepal and Bhutan are using Kolkata port for their export and import trade, where they face considerable congestion. Recently Kolkata port is also facing siltation problem. This could be one of the reasons as to why India has asked for use of Mongla Port, to which Bangladesh has agreed.

Mongla Port has large spare capacity, as only 20% of its capacity (at the present level of management efficiency, and cargo/container handling technology in use) is currently used. Once Nepal, Bhutan and India start using Mongla Port, it would be possible to justify economically, the extension of railway link from Khulna to Mongla Port and construction a railway bridge over Rupsa River.

Nepal is expected to use Birganj-Raxaul-Kathihar-Rohanpur-Khulna railway link to move its export/import cargo through Mongla Port. Bhutan will use road link through Burimari. India can use any of the 3-rail heads, Darsana, Benapole and Rohanpur to use Bangladesh railway to reach Khulna. Containers/goods will then be transferred to truck-trailers or covered-vans to move these to Mongla Port.

With regard to road network, as indicated earlier, Bangladesh roads have only 2-lanes and also has structural weakness. As such it would not be desirable to allow heavy (often overloaded) Indian trucks to ply on these roads. Bangladesh road transporters should therefore, extend this logistic support to carry the traffic using medium sized multi-axle covered vans/truck-trainers.

Movement of containerized cargo between India and Bangladesh by rail and IWT

Presently, containers are not allowed to move by rail between say New Delhi and Dhaka. Movement of these containers by sea route via Singapore costs and Chittagong US$2500/- for a 20 feet container. But if it could have been moved by rail, cost could have come down to US$850/- for a 20 feet container. Container movement by rail between India and Bangladesh could bring tremendous benefit to Bangladesh economy.

Initiative to move containers between Bangladesh and India, by IWT (inland water transport) is already underway, as it could also benefit Bangladesh considerably. An IWT container terminal is already under construction at Pangaon near Dhaka, with a design capacity of handling 116,000, 20 feet containers. Pangaon is expected to come into operation in June, 2010. Container carrying barges are also under construction in the Private sector. Once IWT container terminal is in operation, containers would be able to move between Kolkata-Dhaka, and Chittagong-Dhaka without difficulty. In the process, there would be both cost savings and time savings.

Making available Rohanpur-Kathihar-Rauxal/Birgunj railway link for transit traffic movement

Presently, bilateral trade between Nepal and Bangladesh are allowed to move only by road, along East-West Highway in Nepal (Asian Highway -A2) and through Kakarvita in Nepal, the chicken-neck in India and Phulbari/Banglabandha border point. Under the joint communiqué, rail link between Birgunj (Nepal)/Rauxal-Kathihar (India)-Rohanpur (Bangladesh) will be available to move transit traffic to and from Nepal, to use Mongla Port. Provision of this facility will greatly help Mongla Port to remain competitive in handling Nepal's export/import traffic. It will also help both Bangladesh and Nepal to save the transportation cost of their bilateral trade.

Construction of Akhaura-Agartala rail link
This would be a new rail link of around 13.7 km to link Agartala with Bangladesh rail. Meanwhile India has already linked Agartala with the Indian railway system in the North-East India.

With the construction of this rail link, Tripura State and part of NE-India will get linked to Chittagong Port by rail.

Ashuganj River Port to be designated as a new Port of Call in Bangladesh

As part of the joint communiqué, Bangladesh has agreed to designate “Ashuganj” as the 5th port of call, while India agreed to designate “Shilghat” (near Guwahati and 100 km upstream of Pandu) as their 5th port of call for use by Bangladesh.

Bangladesh imports some High Speed Diesel from Numaligarh Oil Refinery in Assam by IWT. Silghat was being used for loading this HSD into IWT tankers, but without any official right to use this port for bilateral trade. This problem will be over now.

Bangladesh has allowed “Ashuganj” to be used by India to facilitate one-time movement of Over Dimensional Cargo (ODC) for construction of a power plant in Triputa State. India will investment in developing the required facilities in Ashuganj and along the road to be used to carry the ODC.

Designation of “Ashuganj” as a new port of call will also help India, to get some of their transit traffic between Agartala and Kolkata to move along this IWT-cum-road transport route. While NE-India will gain tremendously from saving in transport costs and travel time, Bangladesh will also gain by trading in transport services (port services, IWT services and road transport services, besides transit fee.

Concluding remarks
The cost of non-cooperation in transport being very high, transit needs to be provided by all SAARC countries to establish link with each other, on a reciprocal basis. India, Nepal and Bhutan, are all asking for not only transit through Bangladesh but also access to Bangladesh sea ports of Chittagong and Mongla. The recent joint communiqué issued by Bangladesh and India will open up connectivities sub-regionally, to all these 3-countries/territories. Bangladesh could in the process, gain considerably through trading in “transport services”, with the “hinterland countries”. These countries will also gain through savings in transport cost because of shorter trip lengths and access to Sea Ports. Thus it would be a win-win situation for all the four countries, Bangladesh, Bhutan, India and Nepal.

Economies of Bangladesh and NE-India (North-East India) are, however, complementary. While access of NE-India to Chittagong port could open up their economy to outside world, Bangladesh could also gain considerably in the process (Das, 2001). Scarcity of mineral resources, except natural gas, has been major problem for the development of Bangladesh. Northeast India with its huge mineral resource base can fill this vacuum. Moreover, the complementary nature of the hill economies of North-east India, their agro forest resource base and hydro-power potentials can be of great help for the development of Bangladesh.

To establish effective regional transport connectivity, political commitment is a must. In this context, the present timing is very opportune as all the SAARC countries have popularly elected governments in power. These governments should, therefore, take the opportunity to resolve all their outstanding issues through mutual consultation. In order to find a long lasting solution, it is essential to take a holistic view of the situation and identify all irritants as well as all opportunities which could be mobilized to resolve the outstanding issues.

The understanding reached at the India-Bangladesh summit held in New Delhi in January, 2010 could help in resolving many of the irritants, if the issues are followed up properly at the bureaucracy level in both the countries. As Bangladesh is preparing to open up the sea ports together with efficient transport links to the hinterland countries, India should do the same to resolve all issues in respect of water sharing, removal of negative list to ensure zero tariffs for Bangladesh exports, resolving issues related to land and maritime boundary, etc. In view of the strong political commitment from both sides, I am confident that all issues related to transport connectivity and transit, as well as other unresolved issues identified in the Joint Communiqué will be resolved for ever in the next 1 to 2 years through a process of give and take.

The author is former director (transport), UN-ESCAP, Bangkok.

© thedailystar.net, 2010. All Rights Reserved