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Connectivity strategy needs to be aligned with investment

FE Report | June 21, 2015 00:00:00

Signing of the Motor Vehicles Agreement (MVA) among four countries -- Bangladesh, Bhutan, India and Nepal (BBIN) -- will open up a new era of regional connectivity and help boost the South Asian cooperation.

Speakers at the dialogue on 'Trade Facilitation in South Asia through Transport Connectivity: Operationalising the Motor Vehicle Agreements (MVAs)' on Saturday expressed the view stressing the need for more coordination and concordance of protocols and SOPs (Standard Operating Procedures) among the MVAs.

They also demanded a comprehensive connectivity strategy which, they said, should be aligned with investment strategy of Bangladesh.

Centre for Policy Dialogue (CPD), a local private think-tank, organised the dialogue at the city's BRAC Centre Inn auditorium on Saturday which was attended by a good number of economists, researchers, businessmen, academics and officials from government and non-government organisations.

Following this agreement, the cost of rail cargo movement between Kolkata to northern Indian states will be reduced to two-thirds, from US$ 30 per metric tonnes (MT) to $11 per MT, with substantial reduction of distance, almost about 76 per cent, said CPD Executive Director Professor Mustafizur Rahman while presenting a keynote paper on the subject.

The agreement, Mr Mustafiz said, will open up new opportunities for Indian investment. There are Special Economic Zones for India at Mongla and Bheramara, coastal shipping agreement and seamless multimodal connectivity. The agreement (BBIN-MVA) will also facilitate transport movement within Bangladesh.

On the other hand, Bangladesh needs to invest about US$ 8.0 billion for infrastructure development to help establish closer connectivity with India. The infrastructure includes roads, rails, IWT (inland water transport) and ports.

Cost for per kilometre upgradation of roads to international standard in view of the BBIN-MVA in Bangladesh context is estimated at Tk 250-300 million (approximately US$ 3.7 million), said the analysis. To reap more benefits from the agreement, speakers expressed the view that BBIN-MVA and SAARC MVA need to be mutually aligned to each other.

Road Transport Minister Obaidul Quader, who attended the programme as the chief guest, said Bangladesh is trying its best to develop its roads and highways to facilitate the regional connectivity and many of the projects are ahead of schedule. He said the Padma Bridge is no more a dream. It's a reality now with almost 24 per cent of the works completed.

He pointed out that about 140 kms of 192 km Dhaka-Chittagong 4-lane highway has already been completed and the Dhaka-Mymensingh 4-lane highway will be opened by June 30 this year. He identified relocation of religious structures like mosques, temples, madrasha, graveyards and crematoriums as the main obstacles that hinder progress of the construction works.

Indian High Commissioner Pankaj Saran, who attended the programme as a special guest, also identified requisition of land for construction of roads as more complicated. This is hindering development of roads, he said. To increase trade and business between the two countries, he stressed the need for development of multimode transport system.

Mr Pankaj Saran urged the government for increasing navigability in riverine routes as transportation of goods from Haldia in Kolkata to Guwahati takes some 40-45 days.

The Indian envoy pointed out that US$ 2 billion Line of Credit (LoC) to be provided to Bangladesh by India will be free from conditions. "Not all of the loan will be used for infrastructure development. Only a portion will go for development of infrastructure and the rest in other sectors like ICT, education, health, power, railway and the areas the government prefers", he said.

According to the speakers, South Asia still continues to remain the most disconnected region in the world with high cost of doing business and missed opportunities. Because of lack of transport connectivity,  competitive advantages of Bangladesh's exporters are being undermined and duty and quota-free offer of India remains largely unrealised.

CPD chairperson Prof. Rehman Sobhan, who moderated the programme, also stressed the need for increasing navigability. "There is no night navigability in the routes," he said also stressing the need for reconstructing the Akhaura-Agartala Road.

The programme was addressed among others by Nepalese Ambassador Hari Kumar Shrestha, FBCCI president Abdul Matlub Ahmed, CPD distinguished fellow Prof. Rounaq Jahan and Dr. Debapriya Bhattacharya, former Tariff Commission chairman Dr. Mujibur Rahman, former commerce secretary Suhel Ahmed Chowdhury and Bangladesh Freight Forwarders Association President Mahbubul Alam.

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