Project Background

The Regional Technical Assistance (RETA) Project No. 39454 (ADB 2007), which we briefly summarize here, lays out the background to the proposed project and the scope of the infrastructure developments that are being undertaken. Its central thesis is that while South Asia inherited an integrated transport infrastructure from the British, this infrastructure was fractured by the partition of India and its political aftermath and now needs to be rebuilt within the context of greater political harmony in South Asia (ADB 2007). Infrastructure in many areas has fallen into disuse, raising the cost of travel and trade.

Among the issues of particular concern that are highlighted in the RETA (which summarizes discussions from meetings in the SASEC region since 2001), is the landlocked or semi-isolated status of the regions under study; finding ways to integrate Nepal, Bhutan, and the northeastern region of India with the wider South Asian and world economy via improved access to the ports and economic centers of the region, and providing a choice of route and mode, are viewed as critical (ADB 2007).

In terms of physical infrastructure issues, the northeastern region of India is connected to the rest of India by a narrow and congested land corridor between Bangladesh and Nepal. This landlocked region trades with the rest of India and the world through this strip of land, and the costs of transporting goods to and from the northeastern region are consequently high. Third-country trade for both Nepal and Bhutan is also routed through this corridor, with associated delays and costs (ADB 2007).

The proposed solution is to allow the landlocked region of northeastern India, Bhutan, and Nepal access to Chittagong port through Bangladesh's eastern border, or to Mongla port through its northwestern border. Non-physical barriers are also an issue. Customs clearance procedures can add significant costs and delays, and can reduce transparency. In the SASEC region the key border-crossing points are at Benapole (Bangladesh) and Petrapole (India), through which more than 80% of trade between the two countries is routed. According to ADB (2007), severe congestion results in long queues of trucks on both sides of the border and waiting times of 1–5 days. More than 85% of the time spent waiting at the border is spent on queuing, customs clearance, and transferring cargo. To mitigate the congestion and improve the efficiency of border operation, the Government of India is in the process of developing an agreement for cross-border truck movement in consultation with the Government of Bangladesh.

The RETA lays out a plan addressing these physical and non-physical barrier issues for the promotion of subregional economic cooperation and integration between the SASEC economies. An investment project is proposed that will “facilitate the unhindered movement of goods, services, and people across SASEC countries through improved cross-border transport infrastructure and the introduction of modern cross-border management regimes.” The proposal involves improvements in road corridors, rail links, and cross-border procedures.

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