Chabahar and Sittwe Ports
----------------------------------
India has recently gained operational control of 2 foreign ports. Chabahar is very strategic and Sittwe port is meant to economically uplift NE India. But as it turns out, Chabahar port will be able to deliver much higher economic benefits through port-led industrial development and trade with Afghanistan. And expected economic benefits from the Sittwe connectivity project (or Kaladan Multi-Modal Transit Transport Project) have come down due to an understanding with Bangladesh for the use of Chittagong port. While geopolitics perils have abated for Chabahar, they have aggravated for Sittwe by the conflict in the Rakhine State.
India, Iran and Afghanistan have made a big show of solidarity at each step of Chabahar's development. National interests can shift and undermine close "alliances" but these visions of doom don't matter much when the economic reality of Chabahar is good and becoming stronger. What started off as a plausible strategic project is becoming financially sustainable through a positive approach of India and Iran in commercialising the venture (see comments).
Sittwe port is part of a multimodal transport corridor to connect NE India with the Indian Ocean. Political tensions in the region have slowed down the project, while geopolitical issues have diverted the Indian govt into winning over Myanmar and sentiments of Rakhine state in particular. These are discussed below.
India has recently gained operational control of 2 foreign ports. Chabahar is very strategic and Sittwe port is meant to economically uplift NE India. But as it turns out, Chabahar port will be able to deliver much higher economic benefits through port-led industrial development and trade with Afghanistan. And expected economic benefits from the Sittwe connectivity project (or Kaladan Multi-Modal Transit Transport Project) have come down due to an understanding with Bangladesh for the use of Chittagong port. While geopolitics perils have abated for Chabahar, they have aggravated for Sittwe by the conflict in the Rakhine State.
India, Iran and Afghanistan have made a big show of solidarity at each step of Chabahar's development. National interests can shift and undermine close "alliances" but these visions of doom don't matter much when the economic reality of Chabahar is good and becoming stronger. What started off as a plausible strategic project is becoming financially sustainable through a positive approach of India and Iran in commercialising the venture (see comments).
Sittwe port is part of a multimodal transport corridor to connect NE India with the Indian Ocean. Political tensions in the region have slowed down the project, while geopolitical issues have diverted the Indian govt into winning over Myanmar and sentiments of Rakhine state in particular. These are discussed below.
4
Shared publicly
- Chabahar port: Win Win on Economics
-------------------------------------------------
Importing gas in the form of urea from Iran via Chabahar port is a good way to create a win-win relationship with Iran. Why?
1) Iran offers cheaper gas, which significantly reduces the cost of urea. This may reduce the subsidy bill of GOI.
2) It is a cheap way to transport/ import LPG. The demand for gas (ie lower projected demand) from domestic fertiliser plants is shifted to other sectors.
3) It offers good FDI opportunity to Indian fertiliser firms and a scope to export beyond India.
4) As an anchor investor for Chabahar port, it allows GOI to set off its capital investments and annual charges.
5) And reduced marginal cost of running Chabahar port helps to increase volumes of Afghan cargo using the Iran-Afghanistan transit route, instead of using Pakistan. India accomplishes its strategic goals without needing to pay too much subsidy.
6) Successful port & allied infra will help bring other investments, to further develop the Sistan- Baluchistan region of Iran. As such, it will motivate Iran to remain a firm supporter of the deal.REPLY 10w - "Infrastructure at Sittwe Port in Myanmar, constructed with India’s assistance, is ready for operation." -- Union Minister
Sittwe Port------------
The construction of Sittwe Port is part of the Kaladan multi-modal transit transport project and its objective is to create a multi-modal sea, river and road transport corridor for shipment of cargo from the eastern parts of India to Myanmar through Sittwe port as well as to north-eastern part of India via Myanmar.
The approved construction cost of Sittwe Port and Inland Water Terminals at Sittwe and Paletwa is Rs. 517.29 crore.
India and Myanmar signed a bilateral Memorandum of Understanding (MoU) on 22nd October, 2018 for operationalisation of the port at Sittwe and Inland Water Transport (IWT) Terminals at Sittwe and Paletwa. Once fully operational, the project would encourage investment and trade and also open up alternate routes for connectivity to India’s northeast region.
The development comes even as India took over the operations of a part of Shahid Beheshti Port, Chabahar in Iran during the Chabahar Trilateral Agreement meeting that was held on December 24th, 2018.
The heads of Indian, Iranian and Afghanistan delegation jointly inaugurated the office of the Indian SPV - India Ports Global Chabahar Free Zone (IPGCFZ) at Chabahar. The physical take-over of the terminal area, cargo handling equipment and Office building was completed by December, 29th last year.
Commercial operations began at IPGCFZ with the arrival of a vessel. A Cyprus registered bulk carrier had arrived at Chabahar with 72458 MT of corn cargo. The vessel MV MACHERAS berthed at the terminal a few days back on December 30th.
According to the ministry of shipping, "this step marks the beginning of a long journey. India has written history with its engagement in Chabahar and is now leading the regional
cooperation and joint efforts to support landlocked Afghanistan."
Interestingly, this is the first time India will be operating a port outside its territories. India started interacting with Iran on Chabahar Port around 2003 but a major push was received
in the second half of 2014, resulting in the signing of an MOU between the two countries for the development of Chabahar Port in May 2015.
This MOU translated into a formal 10-year contract for equipping and operating the Chabahar Port, which was executed on May 23rd, during Prime Minister Narendra Modi’s visit to Tehran. The US has already provided a waiver to India on the port as well as the railway line from the port to Afghan, after Delhi stood firm on its engagement with Tehran.
REPLY 10w - December 8, 2018 (update)
============
Kaladan project on course despite delays, cost concerns
India has finished upgrading the Sittwe port on Myanmar’s Rakhine coast and has started the process of selecting a private operator to run the port.
Prabir Pandey, chairman of Inland Waterways Authority of India, said the process of selecting a private operator should be completed in six months at the most. “By May next year, Sittwe should be operational,” he said.
Upgrading the Sittwe port, which is not far from China built Kyaukphyu port, is part of India’s Kaladan multi-modal project that intends to connect Indian mainland to its northeast via sea and up the Kaladan river into Mizoram state.
After years of delay, India has finally kicked off the construction of the 109-km road project that connects Paletwa river terminal to Zorinpui on the Mizoram border in Myanmar, as part of the $484-million Kaladan Multimodal project.
But completing it by 2019 will be a herculean task. The work on the road started in April but progress was slow during the long monsoon months. It has now picked up speed with the approach of the dry winter season.
The ?1,600-crore road project that passes through dense forests and hilly areas was awarded to Delhi-based C&C Constructions in June 2017. But the contractor had to wait till January this year for the requisite clearances from the Myanmar government to start ground work.
On completion, the project will help connect Mizoram with the Sittwe Port in Rakhine State of Myanmar.
India has already completed the rest of the Kaladan project work in Myanmar. This includes the construction of the Sittwe Port on Kaladan river mouth in Rakhine, construction of a river terminal 158 upstream at Paletwa and dredging of the Kaladan river.
On the Indian side, work is on to extend the Aizawl-Saiha National Highway by 90 km to the international border at Zorinpui. Also, a ?6,000-crore project is underway for four-laning the 300-km highway from Myanmar border to Aizawl to ensure the faster movement of goods.
Completion of the Paletwa-Zorinpui road, therefore, holds the key to operationalise the Kaladan multi-modal project.
However, in a major planning faux pax, the project was not taken up till October 2015, when the Narendra Modi government escalated the Budget by nearly six times and roped in the state-owned Ircon Infrastructure as a consultant.
Based on bids received in June 2016, Ircon Infra awarded the contract in June 2017 with a mandate for completion in 36 months. But the chances of completing the project by 2019 are slim.
To start with, the six- to seven-month-long delay to get the clearance to start work had already impacted the project’s schedule. Considering the prolonged monsoon season in Myanmar, the delay had cost the contractor much of the favourable weather time.
That’s not all. Myanmar granted security clearance for road construction for a 60-km stretch from Paletwa apparently due to alleged local political unrest in the Chin State bordering South Mizoram. This means the contractor could not start work from either end.
Practically too, starting work from either end may not be as easy, as the last leg of the new highway from Sahiha to Zorinpui on Myanmar border is not yet ready. A recent report attributed the delay to land acquisition hurdles in Mizoram. Also, the border doesn’t have customs and immigration facilities.
Left with a limited option, the contractor is now focusing to work from the Paletwa end.
In the absence of road connectivity, it is imperative to carry heavy equipment by barges from Sittwe to Paletwa. But low end-season drought in Kaladan river made it impossible, meaning deployment of machines will be impossible before the monsoon.
But transport analysts say they are more keen to use Sittwe to export to Myanmar and also use the port to export to China. Chinese port is on the country ‘s eastern coast and using the Rakhine-Yunnan rail-road network will cut down on the cost of Indian exports to China and make them more competitive.
“Sittwe is more suited to route exports to Myanmar and China than to reach cargo to India’s Northeast. For that the Chittagong-Agartala corridor is better suited,” said logistics expert Atin Sen.
“Kaladan project is more a strategic statement than a logistic imperative especially after Bangladesh has played ball on transit and use of Chittagong and other ports.,” said Sen, a former general secretary of the Asian Council of Logistics.
REPLY 10w REPLY 10w
Add a comment..
No comments:
Post a Comment