TRANSIT AND

CONNECTIVITY:
REACHING A WIN-
WIN SOLUTION
Institute for Policy, Advocacy and Governance (IPAG)
Glossary

Transit: Academically, transit is “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.

Transshipment: Academically, Transshipment is the “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.

Corridor: A strip of territory that runs through that of another state/country and secures access to the sea or to
some desired point or place.

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List of Acronyms

Contents

1.1 Introduction and Background.........................................................................................................2

1.2 Objectives of the Study...................................................................................................................4
2.0 Existing water route and legal basis for transit....................................................................................5
2.1 Working agreement to reopen Bongaon-Jessore railway line 1990....................................................6
2.2 Proposed Protocol between India and Bangladesh for Arrangements for the Use of Chittagong and
Mongla ports by India.................................................................................................................................6
3.0 The Economics of Transit......................................................................................................................7
3.1 Transit and Trade..................................................................................................................................9
3.2 Infrastructure investment for Transit.................................................................................................10
3.3 New Turn in Connectivity between Bangladesh and India................................................................11
4.0 Recommendations on Rail - Road Infrastructures for Transit............................................................12
4.1 Recommendations on Custom Infrastructure....................................................................................13
4.3 Recommendations on Rail Infrastructure..........................................................................................14
5. Conclusion.............................................................................................................................................16
References:...............................................................................................................................................18
Annexure I.................................................................................................................................................19

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 Chapter 1: Introduction

1.1 Background and Context

In the age of rapid globalization and economic zoning, connectivity is considered as an indicator for measuring
economic and social development. The world in the last half century has experienced reduced transport cost
through better connectivity and this has reshaped the economic geography in terms of economic integration
among the closer neighbors. The economic potential from better connectivity among the South Asian Countries
has long been neglected even though it inherited an integrated transport system since British colonial period.

Connectivity is nothing new in the history of South Asia. In the pre-1947 period, the entire region of Bengal,
Assam and the northeast were connected by integrated rail and river services which were first fragmented by
partition in 1947. Later on the India-Pakistan war in 1965 interrupted the system of network severely which in
fact affected mostly the connectivity between [the] then East Pakistan and West Bengal. Pakistan government
deliberately uprooted the railroad connections, closed many of the border crossing sand imposed restrictions on
transport and movement between India and [the] then East Pakistan. However, connectivity was immediately
restored after our War of Liberation, and in 1972 Bangladesh and India signed the Inland Water Transport
Agreement that provided for multi-modal transportation — rail, river and road — between the two countries. A
further effort was made to strengthen connectivity in the 1974 Indira-Mujib accord under the clause for
strengthening the bilateral trade. Unfortunately, the 1974 Accord was never implemented fully as Bangabandhu
[Sheikh Mujibur Rahman] was assassinated in 1975, and the agreement was stalled but not repealed or
rescinded. In the broader sense the initiative of the present government of Bangladesh took the effort to make
that agreement operational through improved and expanded rail, river and road infrastructure.

As Bangladesh is having proximity of sea with two underlined seaports such as Chittagong and Mongla, its
geographic location has been strategically very important to landlocked regions of south Asia especially North-
eastern states of India including Nepal and Bhutan. But the region could not so far realize this high potential
area of cooperation which could have contributed a lot to boost the economic development of the region. Being
the ultimate gainers from the cooperation the political authorities of Bangladesh and India unfortunately did not
come forward with initiatives to explore this long untapped potential to the optimize advantages until the visit of
Prime of Minister of Bangladesh to India in 2010. This remarkable visit of the Bangladeshi Premier in India put
the countries in the new dimension of approach for better economic cooperation with a major focus in

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connectivity. Accordingly both countries sought to improve not only the connectivity between themselves but
with their neighbors — Nepal and Bhutan.

If Bangladesh and India could establish a transit, transport goods and passengers by India to its northeast
through the much shorter route, via Bangladesh, would clearly be a great boon — it will cut down distances,
time and costs and speed up the development of the region. For Bangladesh also, this would be a complete win-
win situation. The country will not only earn a significant fee for the use of its transit facilities and
infrastructure, but also improve its domestic transportation, stimulate domestic trade by between 3 to 5 per cent
annually, and make Bangladesh an attractive destination for Indian and foreign investment. It will create a large
number of job opportunities as new industries are set up to take advantage of the large Indian market. I believe
connectivity and transit will have a transformative impact for all the countries of the sub-region — Bangladesh,
India, Nepal and Bhutan.

1.2 Objectives of the Study

This study investigates the prospects of economic benefit of transit between Bangladesh and India for
connecting the Northwestern States of India to its main land through the shortcut routes via Bangladesh.
Although there had been transit among South Asian Countries in the regime of British Colony, the system of
movement of goods suspended due to demarcation of country at the time of independence. History of transit
between Bangladesh and India says that there was transit for the movement of goods between Bangladesh and
India through roads, rail and water but the lack of trust and political will from either side became the major
barriers in sustaining the arrangement. Complex points of negotiation and the future projection of investment
and its sharing are other important issues in researching a consensus between Bangladesh and India for
providing access to the movement of Indian goods through Bangladesh. To be more specific the study foresees
the following objectives:

 To analyses the economic aspect of transit which may help the political leadership and policymakers of
both Bangladesh and India to reorient their thinking.
 To find the strategies for transit between Bangladesh and NESI to ensure a bilateral discussion based on
shared interest and goals.
 To make a comprehensive background on the history of transit and how it is import especially for NESI
region in terms of transportation of their resources.
 To identify the potential routes, the most cost effective way of specific steps based on international
practices for enhanced cooperation on transit.

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  To set out estimation of investment of various cost required to development the infrastructure for transit.

Chapter 2: Existing Transit Routes

2.1 Water Route and Legal Basis for Transit

Bangladesh and India signed the Protocol on Inland Water, Transit and Trade in 1972. However, river transit has
remained of limited utility to India given the fact that very few rivers are navigable throughout the year. On 1
April 2009, the Indo-Bangladesh Protocol on Trade and Transit was extended by two years. Irrespective of who
has been in power in Dhaka, this treaty has been extended by two years, each time it has expired. Since January
2002, the BNP has extended it periodically. The treaty was extended 21 times during the four party alliance.
Under this protocol, Indo-Bangladesh bilateral traffic regularly move along the following two routes:

Route 1: Kolkata-Raimongal-Mongla-Narayanganj-Aricha-Pandu
Route 2: Kolkata-Raimongal-Mongla-Narayanganj-Bhairab Bazar-Sherpur-Karimganj

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Currently, these routes are highly underutilized, partly due to lack of adequate drafts, navigational aids, and
partly due to limited number of ports of call and non-renewal of the Protocol for longer periods, a problem
which has now been resolved.

2.2 Transit Arrangements for Indian Trade through Bangladesh  

When discussing about the transit relation between two countries, it needs to bear in mind the prospect of open
sea, open air, landlocked, virtually landlocked or semi landlocked status within those countries. Because transit
mode (land, sea, water, railway) and transit cost largely depend on these mediums.
The objective of transit procedures is to ease the route and transportation system to avoid excessive delays and
costs, besides conforming to relevant international conventions. As NESI is a landlocked zone, it totally depends
on transit facilities provided by contiguous neighbors for their domestic and international trade. Geography
shows that NESI shares 4,095 kilometers (2,545 mi) of its area with Bangladesh. However, despite many
concerns and repeated attempts, political barriers have blocked the way of transit facilitation as physical
barriers. Conventionally, inter-regional or bilateral trades are overly restricted by cross-country regulations and
logistical barriers. So often, trade logistic costs are more serious barriers than tariff barriers to inter-regional
trade. Trade relations between India, specially NESI and Bangladesh, while seemingly positive, are similarly
restricted by the large cost of trade logistics. The NESI is connected through a thin patch of land known as
“Chicken’s Neck.” Besides, this geographic setoff, these seven North-eastern states of India also do not have
access to sea except through Kolkata that requires a detour passage through the chicken’s neck. For example, the
distance between Agartala (India) and Kolkata is around 490 kilometers. In comparison, the distance between
Agartala and the nearest seaport in Bangladesh (Chittagong) is around 213 kilometers. Understandably,
transport costs of trade for these North Eastern states are very high.
The latest progress for removing these barriers were two successive bilateral meetings between the two
governments that traded off the current obstacles, respectively in 2011 and in 2015. The GoI and GoB are in the
process of negotiating a transit agreement to allow traffic between western Bengal and the landlocked Indian
states in the North East through Bangladesh. It is expected that this framework will also help Nepal and Bhutan
trade internationally through Bangladeshi sea ports. The transit has been a thorny issue in Indo-Bangladesh
political and economic relations for a long time. So the change in political mindset is a huge step forward.
Effective implementation of this transit agreement hinges on two main issues:
1. A functional transit procedure through Bangladesh that would allow seamless movement of goods between
western Bengal and the North Eastern states of India, and from Bangladesh into Nepal and Bhutan, through
India, with no significant waiting time at the border or en route due to inspections or trans-loading for instance.
2. Adequate cost recovery mechanisms for the transit country, Bangladesh, to recoup the costs associated with
required infrastructure and services, according to agreed international principles on freedom of transit.

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Time is another essence to consider since the political auspicious window may not last forever. The benefits of
this policy change are obvious and will be advantageous for both countries. India will gain from much lower
transport cost for its own trade as well as international trade with the North Eastern states. Bangladesh will
benefit from a much better utilization of its port facilities and associated fees, reduced trade costs with India,
Nepal and Bhutan resulting in higher volume of trade, and an opportunity to upgrade its transport network
financed by user charges. Furthermore, these will eventually open up more avenues for trade and economic
relations and larger investment opportunities.

Bangladesh, India to negotiate transit fees, charges 

Bangladesh and India will negotiate transit and transshipment fees and charges on cargo movement admissible
under international agreements, conventions and practices. Both the parties reached the conclusion to
negotiate at the Shipping Secretaries level meeting between the two countries held in New Delhi on April 20.

The minute of the meeting accessed by the Dhaka Tribune said both sides agreed to bring changes in the
Protocol on Inland Water Transit and Trade (PIWTT), which governs transit and transshipment from one part of
India to another.

“Bangladesh side proposed that provisions for service charges for the transit as admissible under the
international agreements, conventions and practices will be included in the PIWTT,” the minute said.

The clause VIII of the trade agreement incorporates the fees and charges issue between the two countries and
it had already been endorsed by the cabinet.

Bangladesh in 2010-11 fiscal unilaterally imposed transit and transshipment fee to the tune of Tk 10,000 per
container and Tk1,000 per tonne for bulk cargo, but it was later withdrawn after strong persuasion from the
Indian side.
A major breakthrough was achieved between India and Bangladesh yesterday with the Indian side giving
the go ahead to Bangladesh’s charges for transshipment facilities at Ashuganj port or Akhaura Land
Custom Station (LCS) amounting to Tk 192.22 per metric tonne. In the break-up of the charges, according
to sources, the basic should be read Tk 130 per tonne as custom related charges, Tk 52.22 as road charges
and Tk 10 as Bangladesh inland water transportation supervision charges. Additionally, a custom escort
charge of Tk 50 from Ashugnj river port to LCS Akhauara /Agartala shall be
levied. (http://www.theindependentbd.com/post/23368)
NEW DELHI: While the centerpiece of Narendra Modi's maiden visit to Bangladesh was exchange of protocol to ratify the
four-decades-old Land Boundary Agreement to demarcate the border for good, certain key outcomes that would finally give
Delhi transit rights through Bangladesh missed the limelight. 
India's long-pending request for transit rights were met through several transport agreements and framework arrangements
that were reached on Saturday following Modi's talks with Sheikh Hasina. The focus is on connectivity by road, rail, rivers,
sea, transmission lines, petroleum pipelines and digital links that would give Delhi access to its Northeast and beyond to
Southeast Asia through Bangladesh. Senior diplomatic sources told ET that the transit right would enable an effective 'Act
East' Policy

The rights to transit through Bangladesh did not come easily to India. The erstwhile Khaleda Zia regime had strong
reservations against granting transit rights to Delhi on the pretext that it would infringe on the sovereignty of Bangladesh.

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Access to landlocked Northeast is not only delayed but also becomes dearer in the absence of routes through Bangladesh.
Several of Centre's development projects for the seven states of Northeast ran into delays as the gateway remains the
Siliguri corridor in West Bengal.

However, the Hasina government realized that granting transit routes is a win-win situation for Bangladesh as it would
enable local entrepreneurs to access the markets in Northeast and beyond and enable greater people-to-people contact in a
much smooth fashion, a source pointed out. 

Opening of transit (use of Chittagong and Mongla Ports) and an East-West line for power evacuation would signal a new
chapter in India-BD relations based on mutuality of benefit, pointed out an official who has been closely involved in
negotiations with Bangladesh on transit rights. "By starting work on the Ashuganj port and rail link to Tripura (on grant basis),
we have moved in anticipation of this eventuality of transit rights," the official noted. 

Along with West Bengal Chief Minister Mamata Banerjee, the two prime ministers flagged off Kolkata-Dhaka-Agartala and
Dhaka-Shillong-Guwahati bus services. Modi noted that the bus services were to "connect our citizens more easily and our
two nations more closely". 

The Modi government's grant of fresh $2 billion for infrastructure development will enable corridors for sub-regional
connectivity among Bangladesh-Bhutan-Nepal-India and transit of people and goods through India's eastern neighbour. 
. 
Prime Minister KP Sharma Oli shaking hands with Indian Prime Minister Narendra Modi prior to delegation level talks
and agreement signing, in Hyderabad House, New Delhi, on Saturday. Oli is on a six-day visit to India. Photo: AFP,
February 20, 2016.t

Besides, rail transit facility would be operationalised through Singhabad in India for Nepal's trade with and through
Bangladesh, according to a statement. 

Another agreement envisages simplification of modalities for traffic of goods between Nepal and Bangladesh while transiting
through India, through the Kakarbhitta (Nepal) and Banglabandha (Bangladesh) corridor. 

2.3 Existing Roads, Highways and Rail Links

India and Bangladesh signed the Protocol on Inland Water, Transit and Trade in 1972
A new river route for linking India’s Northeast to Bangladesh has been proposed. Bangladesh and India already
have eight specific routes for river transit connecting West Bengal and Assam with Bangladesh. During his visit
to Dhaka in 2007, Minister of State for Commerce and Power, Jairam Ramesh requested Bangladesh to allow
India the use of the Ashuganj river port for the transportation of goods from Tripura, which is just 62 kilometers
away from the port.
Bangladesh’s Ministry of Foreign Affairs had Dr Smruti S Pattanayak Research Fellow, IDSA, New Delhi IPCS
ISSUE BRIEF NO 113 suggested that signing up to the Asian Highway would be an economic and political
imperative. Joining the route would help Bangladesh to strengthen its much publicized “Look East” policy and
especially its relations with China.
Connectivity between the two neighbors is at present restricted to bus services between Dhaka-Kolkata and
Dhaka-Tripura and a train service between Kolkata and Dhaka, which started on 14 April 2008. Both countries

8
signed the treaty on Inland Water Transport in 1972, which has facilitated river water transit. This treaty has
been renewed periodically by both governments.
After 35 years India and Bangladesh resumed the Dhaka-Kolkata passenger train service in 2007.
There are proposals now to reopen similar facilities in Tripura. There are additional proposals to establish rail
links between Sylhet and Shillong.
Both India and Bangladesh continue to have meter gauge railway tracks that need to be upgraded to broad gauge
in order to facilitate transit if and when both countries agree.
North East India, as this could serve to end their semi-isolated status and provide shorter transport and transit
access to sea ports. Based on SAARC Regional Multimodal Transport Study (SRMTS) findings, an attempt was
made to identify a few strategic routes which could be pursued to provide transport connectivity among the
countries of North East Sub-region of South Asia.
It was, however pointed out that issues related to regional connectivity and transit cannot be resolved in
isolation
Prior to the partition of India in 1947, the trade and commerce of the North-Eastern sub-region with the rest of
India and the outside world used to pass through the territories of what is now Bangladesh. Rail and river transit
across the erstwhile East Pakistan continued till 1965 when, as a consequence of war between India and
Pakistan, all transit traffic were suspended.
Transit or transshipment of cargo across Bangladesh is important to India because it would greatly boost the
economy of North East India. In the process, Bangladesh could also greatly benefit from transit fees and
transport charges, and in addition may expect huge Indian investment in the transport network development.

Logistical Connectivity
A container usually takes 20-25 days and occasionally even up to 60 days 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 3-4 days, if direct rail connectivity and operation were
there between New Delhi and Dhaka.
 India allowed a transit between Nepal and Bangladesh across the “Chicken neck” and Banglabandha,
but for bilateral trade only, and not for the third country trade of Nepal, which now has to pass through
already congested Kolkata port. If transport cooperation was there, Nepal could have used Mongla port
in Bangladesh, which has spare capacity and conveniently located with a direct broad gauge rail link
from Birgunj.
 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.

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  The Southern border of Tripura State is only 75 km from Chittagong port, but goods from Agartala are
required to travel 1645 km to reach Kolkata port through the “Chicken neck”. If there were transport
cooperation between Bangladesh and India, goods would have traveled only around 400 km across
Bangladesh to reach Kolkata, and a much shorter distance to reach Chittagong Port.
 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 North East 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 across Bangladesh.

Connectivity within a Regional Framework

In pursuance of the 12th SAARC Summit decision at Islamabad in 2004, to strengthen transport, transit and
communication links across the region, the SAARC Regional Multimodal Transport Study (SRMTS) was
undertaken by the SAARC Secretariat in 2006. The recommendations of SRMTS were placed before the 14th
SAARC Summit in New Delhi, in 2007.
In order to provide the NE-India States, a convenient and shorter access to the sea, India has been asking for
their access to Chittagong Port. Similarly, Nepal and Bhutan have also been interested to have access to Mongla
Port for their third country trade.
Terms such as “transit”, “Transshipment” and also the term “corridor” which is frequently used in this
connection. Although these are economic issues, there are security concerns as well, such as increased
smuggling of Indian goods and increase of Bangladesh’s vulnerability to the insurgencies in North Eastern
India.
Many of the concerns voiced above can, however, be tackled by properly negotiated agreements for supervision
of goods and containers moving across Bangladesh. “Transshipment” based on Railways, IWT and Chittagong
port will automatically address many of the concerns voiced above. Modern tools for inspection including
scanning can easily ensure that contraband items are not carried as transshipment cargo. Again, if transit and
transshipment traffic are carried in containers, it will be possible to significantly reduce the chances of
smuggling. Whatever means of transshipment is used, it will be essential to ensure effective independent
inspection by different authorities both at entry and exit points to prevent abuse.

Appropriate Transport Mode Selection is Critical for Bangladesh

The issue of transit and/or transshipment needs to be examined against the infrastructure capacity in Bangladesh
covering all modes: roads, railways, waterways, and sea and river ports. An examination of transportation
infrastructure will focus on available excess capacity and the modes that could be used most beneficially and

10
also that serves the optimum output balancing the distance covered and costs incurred. This will also help to
pinpoint specific areas of weaknesses where improvements would be required.

Regional Traffic Should Move Mostly by Railway

In lieu to road network limitation and high maintenance costs involved, transregional traffic/transit should move
mostly by the railway. Bangladesh Railway (BR) has some spare capacity and further capacity can be created
with minimal investment. Railway has also been proven as environment friendly, safer and cost-effective for
long distance movement. Security can also be better ensured in Railway, where goods could be easily moved in
containers. There are, however, some gauge differences in railway network of India and Bangladesh, but with
modern transshipment facilities, these gauge differences will not pose any threat. There are some constraints in
terms of loop length at the Border Stations in Bangladesh which need to be extended. There are, some lack of
compatibility between the rolling stock of Indian and Bangladesh Railways. As such mixing of rolling stock will
not be feasible. The entire freight trains shall have to consist of rolling stock of one country, either India or of
Bangladesh, to facilitate movement of traffic between origin (near one of the borders) and destination, (near
another border). Post-shipment inspections instituted in road based transshipment can still be misused for
smuggling. But, if transshipment traffic is carried in containers on railways, it will be possible to significantly
reduce the chances of smuggling during transshipment. In terms of ease of movement and shifting between
different railway gauge systems, containers again provide appreciable advantages.

Road Transport for Movement of High Value and Perishable Goods

It is highly important to recognize that Bangladesh road network is relatively less developed compared to India.
Bangladesh national highways are all 2-lanes only, but extensively used. These 18 Journal of Bangladesh
Institute of Planners, Vol. 2, December 2009 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. Again most of the trucks used in these
countries have 2-axles, and these are highly over-loaded, in most cases. As such it would not be desirable to
allow these overloaded vehicles to move along Bangladesh Road network. To facilitate movement of high value,
perishable cargo in small quantities for urgent delivery, container could be used and these could be carried by
multi-axle vehicles or truck trailers. For movement of these containers across Bangladesh, the inter-district road
transporters from Bangladesh could provide the logistic support and undertake the transshipment of these
containers. Goods/containers should, however, be loaded for transshipment only after proper inspection for
security, and these need to move under bond and with full insurance coverage.

Movement of Containers by IWT-Cum Road to be promoted

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In the context of Inland Water Transport (IWT), 2-protocol routes are already in use. But these routes are facing
a number of problems which need to be addressed soon, to make IWT more efficient and suitable to carry
containers between India and Bangladesh. In addition, Bangladesh could also consider for designating Ashuganj
as a new port of transshipment and establish facilities there to transfer containers and goods from IWT to road
transport and vice-versa. These containers and goods after proper inspection for security at the transshipment
yard, could be carried by truck trailers/multi-axle vehicles, operated by Bangladesh inter-district road
transporters, for onwards movement to Indian border at Akhaura, which is only 38 km away.

Need to Focus on a Few Strategic Routes

SRMTS has recommended a number of routes to strengthen connectivity among the countries and territories of
North-Eastern sub-region of SAARC. However, keeping in mind the resource constraints, it would be advisable
to focus attention, in the first phase, on a few routes and land ports. Presented below are 3-most important rail
routes, 3-important road routes, and 3-major rail heads, besides 10 land ports which could be opened
immediately to facilitate movement of goods and passengers between the countries of the North Eastern sub-
region.

Chapter 3: Routes for Both Bilateral and Transit Traffic

Rail Route-1: Mahisasan/Shahbazpur-Kulaura-Akhaura-Chittagong (with a rail link from Akhaura to Agartala)

This rail route would provide the NE Indian states, a direct access to Bangladesh port of Chittagong. This route
would be around 600-700 km long and would provide more than 50% savings in travel distance compared to the
route to Kolkata through the “Chicken neck”. The Kulaura-Mahisasan rail link needs to be re-commissioned
before train operation could start. Until such time that Indian Railway Section upto Mahisasan is converted to
Broad Gauge (BG) and Shahbazpur-Kulaura-Akhaura-Chittagong section is converted from MG to Dual gauge
(DG), transshipment facilities shall have to be installed in India near the border to transfer containers/freights
between BG and MG. To facilitate smooth train operation along the route, bilateral/multilateral rail transport
agreement shall have to be developed and adopted, besides introduction of simplified customs procedures and IT
data transfer facilities at the border. This regional rail connectivity would benefit both India and Bangladesh
considerably. While North East India States will gain access to a conveniently located sea port and each ton of
cargo will save more than 50% of the transport cost and travel time, Bangladesh will benefit from earnings of
foreign exchange in terms of rail charges, port charges and transit fee for each container or each ton of cargo.
Thus, it would be a win-win situation for both India and Bangladesh.

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Rail Route-2: Gede/Darsana-Jamuna Bridge – Tongi – Akhaura – Kulaura -Shahbazpur/ Mahisasan (with a rail
link to Agartala)

This route would provide direct connectivity between Kolkata and North East Indian States, currently, Indian
freight trains travel only up to the border stations inside Bangladesh and BR Locomotives pull them inside to
certain destinations. 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 fully loaded broad gauge wagons, but allows fully loaded ISO containers to move across Jamuna
Bridge, without any load restrictions. While BG container trains can now move up to Dhaka ICD for
transshipment, in the long run, facilities shall have to be established at the proposed Dhirasram ICD (near
Tongi), to transfer containers to MG flat wagons for movement upto Shahabazpur/Mahisasan and beyond, until
such time that the section between Tongi and Shahbazpur is converted to Dual gauge (DG). As an alternative,
possibilities could also be kept open for limited number of containers to move by multi-axle vehicles/truck-
trailers from Dhaka ICD onwards to Indian border near Mahisasan. This logistic service could be provided
easily by Bangladesh road transporters. For smooth movement of trains across the border, bilateral/multilateral
rail transport agreement shall have to be developed and adopted besides introduction of simplified customs
procedures and IT data transfer facilities at the border. This rail connectivity will benefit both India and
Bangladesh to a large extent. This direct connectivity between Kolkata and NE India will be almost half of the
present distance through the chicken neck. As a result, India will gain a lot from the savings in transport cost
and travel time. On the other hand, Bangladesh will also have a new source of earning foreign exchange, in
terms of rail charges, and transit fee for each container and for each ton of cargo. Since Bangladesh has some
spare capacity along the corridor in question, only marginal investment would be needed to carry this transit
traffic. Thus, it would be a win-win situation for both Bangladesh and India.
Road Route-1: Petrapole/Benapole – Jessore-Dhaka (via Road ferry) – Brahmanbaria – Sylhet- Tamabil (with
a link to Akhaura/Agartala)

This route could in the long run, provide direct road connectivity between Kolkata and North East Indian States.
Road transporters could use this route for high value and perishable commodities, as well for small quantities of
goods, which are required to reach the destination quickly. Since Bangladesh roads are not yet fully geared to
carry heavy axle loads, multi-axle vehicles/truck-trailers shall have to be introduced to avoid damage to road
infrastructure. These goods should preferably move in containers and carried by inter-district road transporters
of Bangladesh. All containers/goods will be carried only after proper inspection for security, and these will
move under bond and with full insurance coverage. Modern facilities with multiple transfer points shall be
established at the border for transfer of containers/goods. Regional Connectivity: Opportunities for Bangladesh
to be a Transport Hub 21 This road route through Bangladesh could bring considerable benefit to the North East
Indian States. Savings in travel distance would be around 60%, since the average travel distance between NE-

13
India and Kolkata is around 1400 km via chicken neck, while the travel distance through Bangladesh would be
around 600 to 700 km. Bangladesh would have a new source of earning foreign exchange in terms of road
transport charges and transit fee. Thus, it would be a win-win situation for both Bangladesh and India.
IWT Routes (a): Kolkata-Raimongal-Mongla-Narayanganj-Aricha-Pandu, and
(b): Kolkata-Raimongal-Mongla-Narayanganj-Bhairab Bazar- Sherpur-Karimganj
Indian transit traffic across Bangladesh and Indo-Bangladesh bilateral traffic regularly move along the above
two designated Inland Water Transport (IWT) Protocol routes provided since 1972, as part of a Trade.
Agreement signed between India and Bangladesh (Figure 5). Currently, these routes are highly underutilized,
partly due to lack of adequate drafts, navigational aids, and partly due to limited number of ports of call and
non-renewal of the Protocol for longer periods, a problem which has now been resolved. Recognizing that the
IWT has high potential for carrying both transit and inter-country traffic, it is necessary to assess as to how the
above two routes could be made more efficient and competitive with other modes. Both Bangladesh and India
should jointly look into the problems of IWT routes and come up with suitable solutions. To make IWT more
competitive, one of the immediate actions which could be taken by Bangladesh is to designate “Ashuganj” as a
new transshipment port with facilities developed for transferring containers/goods to inter-district multi-axle
vehicles/truck-trailers of Bangladesh road transporters, for onward movement to the border at Akhaura. These
containers would be loaded to multi-axle trucks only after proper inspection for security and move under bond,
with full insurance cover. This IWT-cum-Road link could be quite competitive to road transport for certain
commodities, and provide a new opportunity to IWT operators and road transporters in Bangladesh to earn
additional foreign exchange. On the other hand, India will gain tremendously, through saving in transport cost
and travel time. For cargo originating in Tripura State, the travel distance savings would be to the tune of 70%,
as the distance through the chicken neck is around 1645 km, while the distance through Bangladesh would be
around 500 km. Thus it would be a win-win situation for both Bangladesh and India.

Rail Route-3: Birgunj – Rauxal – Katihar – Singhabad/Rohanpur – Ishwardi – Khulna, with a road link of 38
km to Mongla Port (Appox. 980 km)

This rail route (Figure 6) would provide Nepal traffic a direct BG access to Bangladesh port of Mongla.
Compared to road link through Banglabandha which is 1314 km to Mongla, this rail route will be less than 1000
km, and could provide a cost-effective service, viz-a-viz trucking. A “Multilateral rail transport agreement”
would, however, be needed, besides addressing the problems of incompatibility of railway standards to facilitate
smooth movement across the border. The containers/goods could be transferred to multi-axle vehicles/truck-
trailers at Khulna Junction station for onward movement to Mongla Port. A small scale transfer facilities and
storage shall have to be established at Khulna Junction station for smooth handling of containers/goods.
Provision of such a direct rail route for Nepal’s third country trade movement through Bangladesh Port of

14
Mongla would, however, bring a win-win situation for all the three countries, Bangladesh, India and Nepal.
While India will earn rail charges for each container or each ton of cargo carried by railway between Birgunj
(Nepal) and Singhabad (India/Bangladesh border), it can also charge transit fees for the same cargo. In addition,
this diversion of third country cargo from Kolkata port to Mongla Port would relieve congestion at Kolkata port,
although there would be some loss of earning for the port. The benefit for Nepal would be the “quick service”
that its export/import cargo would get at Mongla port and the reasonable port charges it would be required to
pay compared to Kolkata Port. In addition, there would be no waiting required for Nepal’s traffic, as Mongla
port has some spare capacity. The benefit for Bangladesh would be the port charges, the rail charges and the
transit fees that it would charge for each container or for each ton of cargo handled. These would be new sources
of earning for Bangladesh, because at this point Nepal traffic does not move through Mongla Port. Thus opening
up this rail route would create a win-win situation for all the 3-countries involved.

Road Route-2: Kakarvita (Nepal) – Phulbari (India) – Banglabandha (Bangladesh) – Bogra – Jessore – Khulna
– Mongla Port

This route is already being used for bilateral traffic, although very little traffic actually moves. But the third
country traffic of Nepal is not allowed to use this route which could have provided Nepal a direct access to
Mongla port. It is now proposed to open this route for movement of third country trade of Nepal. Currently
Nepal’s third country traffic moves entirely through Kolkata port, where it faces congestion. Since Bangladesh
roads are not geared to carry heavy axle load, goods/containers need to be transferred at Banglabandha, and
carried in multi-axle vehicles of Bangladesh inter-district road transporters. To make road transport more
efficient, modern facilities shall have to be established at Banglabandha, for quick transfer of goods/containers
at several points at a time. Loading of goods/containers would be undertaken only after proper inspection for
security and these would move under bond with full insurance cover. To facilitate faster clearance of
goods/containers, on line customs IT connectivity shall have to be established at Banglabandha, besides efficient
warehousing facilities. The main benefit of India will be the availability of Kolkata Port entirely for its own use.
India would, however, be able to charge transit fee for 22 km of route across the chicken neck. Bangladesh will
gain in several ways. Besides earning road transport charges, it will also earn port charges, and “Transit fees.

Road Route 3: Thimphu – Phuentsholing – Jaigon – Chengrabandha – Burimari – Rangpur – Bogra -

Jessore – Mongla Port (880 km)
Since Bhutan does not have any rail system, it is entirely dependent on road transport for its regional
connectivity. The above road route (Figure 8) would provide Bhutanese traffic an alternative and shorter access
to Mongla port in Bangladesh. To avoid damage to Bangladesh Road network, multi-axle vehicles and/or truck-
trailers shall have to be introduced to carry goods and containers. Bangladesh inter-district road transporters

15
could provide this logistic support to carry these goods/containers between Burimari and Mongla Port. These
goods/containers would be transferred only after proper inspection for security, and these would move under
bond, with full insurance cover. To make road transport more efficient, modern facilities shall have to be
established at the land port for quick transfer of goods/containers at several points at a time. To facilitate faster
clearance of goods and containers, on-line customs IT connectivity shall have to be established at the land port
in Burimari, besides efficient warehousing facilities.

Rail routes between Bangladesh and India

In addition to two rail links, namely Gede/Darsana and Mahishasan/Shahbazpur which are already being
proposed for both bilateral and transit traffic movement between Bangladesh and India, the following three rail
links which are already being used for bilateral trade, could be opened for through movement up to certain
destinations within Bangladesh and India (Figure 9). (1) Petrapole/Benapole BG Rail link (2)
Singhabad/Rohanpur BG Rail link (3) Radhikapur/Birol BG/MG Rail link All the major rail-heads, namely
Darsana, Benapole, and Rohanpur are having physical barriers, in terms of inadequate loop lengths and yard
holding lines. In addition there is restriction on movement of oil tankers and containers across the border by rail.
For efficient utilization of rolling stock and to facilitate wider use of railway, consideration should be given to
review these restrictions, to promote further regional cooperation in transport. With regard to rail link-3 at Biral,
at present it is not possible to use this link effectively until the section Parbatipur-Biral is converted to dual
gauge (DG). Bangladesh Railway Master Plan under finalization has already included this conversion as a
project to be undertaken urgently.

Right now, there are five ports of call on each side: Kolkata, Haldia, Karimganj, Pandu and Silghat on the Indian
side and Mongla, Khulna, Narayanganj, Sirajganj and Ashuganj on the Bangladeshi. India mooted the proposal
for inclusion of the Surma river between Ashuganj and Chhatak as an additional transit route and Chhatak as an
additional port of call. In return, India offered Dhubri in Assam as an additional port of call. But Bangladesh did
notagree.
Bangladesh also did not accede to India's request for declaring Narayanganj as an extended port of call saying
Narayanganj was already overburdened with domestic traffic. Bangladesh indicated to forming a joint
committee for conducting a hydro-graphic survey to address India's concern over the navigability issue between
Sherpur and Zakiganj on the Kushiara River and Sirajganj and Daikhawa on the Jamuna-Brahmaputra River.
Bangladesh urged India to declare Badarpur the extended port of call in place of the present Karimganj.
The distance between Dhulian (West Bengal) and Ashuganj being 485 km as compared to 907 km between
Kolkata and Ashuganj, Bangladesh favoured Dhulian-Ashuganj stretch as the protocol route in preference to the
present Kolkata-Ashuganj route subject to availability of the required draft. India believed that the identification

16
of new routes should also depend on cargo inducement and the estimated cost of maintaining its navigability and
not solely on distance. Both sides agreed to initiate steps to include an alternative protocol route via
Shamshernagar outside the periphery of the Indian side of Sunderban Tiger Reserve.

India found it difficult to accept Bangladesh's proposals for mandatory bank guarantee for transit cargoes and
restriction on transfer of cargoes from deep-draught vessels to shallow-draught ones.

India also urged Bangladesh to allow transshipment of cargoes from deep-draught vessels to shallow-draught
vessels including those in the mid-stream and from vessels to trucks and vice versa in presence of the
Bangladesh customs authorities but the Bangladeshi delegation said the matter would be reviewed by a
committee to be formed. Bangladesh also promised to examine India's demand for declaring Mongla a land
customs station. Both sides agreed to strengthen infrastructure at land customs stations at Akhaura (Bangladesh)
and Agartala (Tripura).
On issue of bank guarantee, Bangladesh has decided to do away with the practice of insistence on bank
guarantee on each consignment of transit cargo.

The Indian side drew attention of the Bangladeshi officials to the high-handedness of the personnel of
Bangladesh Border Guards despite Indian vessels and crew having permission from Bangladesh Inland Water
Transport Authority and other authorities concerned. This led to the delay of the vessels.

The Indian delegation urged the Bangladesh Government to allow Ashuganj port to handle bulk cargoes,
particularly food grains for Tripura. India is even prepared to fund the cost of upgrading Ashuganj into a full-
fledged transhipment port but Bangladesh made it clear that the port could not be used for handling bulk cargoes
immediately due to inadequate infrastructure. The Indian delegation's proposed visit to Ashuganj was called off
earlier.

In 2010, Dhaka signed an agreement with New Delhi allowing India to use Ashuganj river port for transit and
transhipment. It was not a blanket permission, only on selective basis. Accordingly, three commercial cargo
transhipment were allowed last year on trial basis and before that transhipment of over-dimensional cargoes for
Oil and Natural Gas Corporation's power plant at Palatana in Tripura.

India, on the other hand, agreed to raise to Taka 10 crore, up from the present Taka 5.5 crore, the annual
maintenance fee for using the rivers and the river ports in Bangladesh by Indian vessels, although more than 90
per cent of the trade by river route between the two countries is undertaken by Bangladeshi flag vessels.

17
Bangladesh officials placed a bill amounting Taka 3.10 million lying unpaid since 1981 on account of various
service charges for Indian vessels and another Taka 0.15 million as charges for handling over-dimensional
cargoes. India agreed to clear the bill.

During the Prime Minister, Dr Manmohan Singh's visit to Dhaka last year, the much-publicised agreement on
the sharing of the Teesta river water could not be signed between the two countries, thanks to the intransigent
West Bengal Chief Minister, Ms Mamata Banerjee. Bangladesh, it appears, has not forgotten that.

Source: http://defence.pk/threads/india-bangladesh-fail-to-renew-protocol-on-inland-water-transport-
trade.160192/#ixzz463Wz0R4E

Source: http://defence.pk/threads/india-bangladesh-fail-to-renew-protocol-on-inland-water-transport-
trade.160192/#ixzz463WuS6Pu

Source: http://defence.pk/threads/india-bangladesh-fail-to-renew-protocol-on-inland-water-transport-
trade.160192/#ixzz463WgpsMH

Chapter 4: Connectivity issue: Political leaders set the tone

Surface transport network in South Asia still continue to remain fragmented, despite existence of basic
infrastructure and facilities. Due to lack of integration, logistic costs in South Asia are very high and range
between 13-14% of the commodity value, compared to 8% in USA. Intra-regional trade in SAARC is around
5%, compared to 26% in ASEAN, 58% in EU, and 62% in NAFTA. If overland transport connectivity among
the SAARC countries could be improved, this could have facilitated enhanced intra-regional trade.
NE-India is virtually a landlocked territory, and traffic from NE-India is required to travel 1400-1650 km to
reach Kolkata Port. If transit was allowed, distances across Bangladesh would be around 450-700 km. It is due
to lack of transport cooperation between India and Bangladesh that traffic between NE-India and the mainland
India is not allowed to transit through Bangladesh.
Consequences of poor connectivity are huge. A 20 ft. container takes at least 30 days to move between New
Delhi and Dhaka, and costs around US$2,500, but by rail it could have reach Dhaka in 4-5 days, and would have
costed around US$850. It is, therefore, crucial that transport connectivity is established sub-regionally to bring a
win-win situation for all countries involved in the Northeastern sub-region of South Asia
One of the earliest initiatives to establish regional connectivity was taken by UN-ESCAP in 1959 and 1960,
through two of its regional projects namely, the Asian Highway (AH) and the Trans Asian Railway (TAR)

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respectively. As part of the SAARC Regional Multimodal Transport Study, completed in 2006, a number of
additional regional routes were also identified. But due to lack of political commitments, these networks have
not been opened to regional traffic as yet.
A real breakthrough came only recently, when a Joint Communique was signed by India and Bangladesh on
January 12, 2010 following a historic India-Bangladesh Summit held in New Delhi. The Joint Communique has
set the tone to achieve a long lasting cooperation in transport connectivity in the northeastern sub-region of
South Asia. Once the various provisions of the Joint Communique are implemented, it could facilitate, a
seamless movement of traffic across the region.
The SAARC Summit held in Islamabad in 2004, decided to strength transport, transit and communications links
among South Asian countries. This was followed by a SAARC Regional Multimodal Transport Study (SRMTS)
which was completed in June 2006. SRMTS identified 10-road corridors, 5-Rail, 2-IWT corridors, 10-Maritime
and 16 Aviation Gateways, for regional transport connectivity. 14th SAARC Summit held in April 2007 in New
Delhi approved SRMTS recommendations and urged their Transport Ministers to oversee their implementation.
This Summit also decided to: (a) extend SRMTS to include Afghanistan, and (b) to develop a model regional
transit and transport agreement.
At the 14th Summit, some sub-regional projects were proposed by Bhutan, India and Sri Lanka, and their
implementation was reviewed by Transport Ministers Meeting, held in Colombo in July 2009, but progress so
far has been marginal except in respect of transport agreement. A SAARC expert group is, currently, going
through the drafts of Motor Vehicle Agreement and a Railway Agreement, for finalization by the member
countries, to facilitate seamless movement across the border. However, a new activity “to run a demonstration
container train from Pakistan to Bangladesh through India and Nepal” was added by the SAARC Transport
Ministers.

4.1 Recent Initiatives: India-Bangladesh Joint Communique

Bangladesh and India signed a Joint Communique on 12th January, 2010 following an India-Bangladesh
Summit. In respect of transport connectivity, the Joint Communique included the following:
 Use of Mongla and Chittagong Sea Ports by Nepal, Bhutan, and India;
 Availability of Rohanpur/Singabad-Kathihar-Rauxal-Brigunj broad gauge rail link for movement of
Nepalese third country trade through Mongla Sea Port, as well as for bilateral trade between Bangladesh
and Nepal.

Implications of Joint Communique, in respect of connectivity

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Based on an assessment of the Bangladesh transport system and its operational capability, the Bangladesh
authority came to the conclusion that regional traffic shall have to be carried mostly by rail and inland water
transport (IWT). Since Bangladesh road network has structural weakness (as these were designed for 8.2 ton
axle load and the roads are only 2-lanes), these can be used in a limited way to carry only high value
commodities. In order to facilitate movement of regional traffic across Bangladesh and for their access to the sea
ports, a thorough assessment was made of the various initiatives and investments needed to implement each of
the decisions included in the Joint Communique.

4.2 Allowing use of Mongla and Chittagong Ports

According to the assessments made by the respective port authorities, Mongla port has 80% and Chittagong port
has around 40% spare capacity, at the present level of management. Some investments have already been
planned to further modernize these ports and enhance their operational efficiency. Decision has already been
taken to involve private sector of global standing, to operate New Mooring Container Terminal (NCT), as a
leaseholder. In order for the Railway to be one of the main modes of transport to carry the regional traffic, major
projects which need to be implemented to facilitate efficient use of Chittagong Ports include, among others, the
following:
* Recommissioning of Kulaura-Shahbazpur-Mahissasan (39 km), plus a transshipment facility near Shahbazpur.
This project is proposed to be financed by Bangladesh Government's own resources.
* Construction of Akhaura-Agartala rail link (approx. 10.0 km), to be financed by an Indian grant outside US$
1.0 billion line of credit (LOC).
* Double tracking of 3-major sections along Dhaka-Ctg. Route, to be financed by the World Bank, the Asian
Development Bank and JICA for which funds are already committed. But the release of fund is tied to the
“Reform of the Bangladesh Railway”, which is still pending with the Government. 
* Construction of 2nd Bhairab Rail Bridge and 2nd Titas Rail Bridge, to be financed out of Indian US$ 1.0
billion line of credit (LOC).
* Construction of an ICD at Dhirasram near Tongi, to be financed under a World Bank project.
* Strengthen several rail sections, modernization of signaling and acquisition of rolling stock, to be financed
from a number of sources.
* 2nd rail bridge on Jamuna, for which some of the funding is yet to be mobilized.

4.3 Role of road transport

Since the major road network of Bangladesh has 2-lanes only, and they suffer from structural weakness, loaded

20
Indian trucks cannot be allowed to use these, until expressways are built on public-private partnership (PPP)
basis using the right of ways (ROW) of the National Highways under the Roads and Highways Department
(RHD) which are usually 40.0 meter wide. To facilitate movement of both national and regional traffic, a
number of road sections, including: Brahmanbaria-Mainamati, Sutarkandi-Sylhet and Benapole-Jessore-Khulna
need upgradation. As part of immediate solution, to carry some of the Indian high value commodities,
Bangladesh road transporters could perhaps provide transshipment facilities from one border to another border
across Bangladesh.
Alternatively, a Joint Venture Trucking Company (JVTC) could be set up by Bangladesh road transporters with
shareholders in India, Nepal and Bhutan, with double registration (i.e. vehicles registered both in Bangladesh
and India) for the company's multi-axle vehicles (truck trailers, covered vans, etc.). Double registration will
allow these vehicles to pick up containers from origins inside India, Nepal and Bhutan, and move across
Bangladesh to deliver goods to destinations without any transshipment at the border. This system could cut
down transport cost appreciably. Setting up of such a company and for its smooth operation, strong political
support of the 4-governments, would be essential.

4.4 Rohanpur-Kathihar-Birgunj Rail Link

Nepal-Bangladesh bilateral trade is now allowed to move by road only through Kakarvita in Nepal, Phulbari in
India and Banglabandha land port in Bangladesh.
However, as part of the Joint Communique signed between India and Bangladesh, export/import trade of Nepal
is now expected to be allowed to use Mongla Port, which will involve a travel distance of around 1300 km by
road. Thus availability of the above mentioned Rohanpur-Kathihar-Birgunj rail link for Nepal's third country
trade to pass through Mongla Port, will provide an attractive alternative as it will involve a travel distance of
around 900 km (See Map-3). However, this route will face tough competition from Birgunj-Kolkata route which
is shorter, around 700 km. Birgunj-Rohanpur-Mongla route can remain competitive only if the dwell time in
Mongla Port can be maintained as low as possible, and the transshipment facilities for containers at Khulna
Railway station perform efficiently, including 44 km truck-trailer service between Khulna Railway station and
Mongla Port.

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Since Kolkata port is already facing congestion and siltation problems,
Mongla Port has a fair chance of surviving the competition, provided
the port operations can be modernized supported by adequate
infrastructure facilities and port charges are comparatively lower. To
this end, Mongla Port has already taken up several projects to enhance
efficiency. The port capacity is being modernized through installation
of modern container handling equipments, undertaking dredging to
increase draft of the main channel, introducing night navigation and
dredging of outer bar. Major part of these investments are being
financed by the Government of Bangladesh from its own resources.

Akhaura-Agartala rail link

At present, the Northeast India's connectivity on the Eastern side with

Bangladesh by Railway is only through Shahbazpur/Mahissasan point.
But the track between Shahbazpur-Kulaura has not been in use since
2002, as a result this link of 39 km needs to be re-commissioned, for
which Bangladesh Government has already committed its own
resources.
Another new link, Akhaura-Agartala (around 10.0 km) is going to be Photo: Jason Hawkes/GetyImages

built soon through Indian grant outside US$1.0 billion LOC. The alignment has been finalized by the India-
Bangladesh Joint Technical Group, and the recommendation has been submitted to the respective governments
for approval. Once approved, a feasibility study will be undertaken and tender called for construction.
This Akhaura-Agartala metre-gauge link once completed, will become a direct competitor to existing Kulaura-
Shahbazpur/Mahissasan link (See Map-4).

Ashuganj, A new Transshipment Port

Two types of facilities are going to be established at Ashuganj IWT port. One of the first facilities to be
developed will be for handling of Over Dimensional Cargo (ODC) for a power plant under construction at
Palatana, Tripura. OTPC-ONGIC-Tripura Power Company will pay for developing facilities for handling and
carrying the ODC. They will use multi-axle hydraulic vehicles to carry the ODC. Roll-on-roll off ferries are
being arranged by the above mentioned power company to carry the ODC traffic upto Ashuganj.
Road between Ashuganj and Akhaura needs to be strengthen, particularly the portion Sultanpur-Akhaura
(15km), which needs to be rebuilt to a higher specification. Some of the bends along that road, need to be
straightened, to facilitate movement of the vehicles carrying ODC which may have up to 36 axles.

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The Second facility to be developed in Ashuganj is the construction of a transshipment facility for containers.
This will facilitate movement of containers, between North-East India and Kolkata region. Bangladesh is
expected to make an investment of around 245.00 crore out of Indian Line of Credit (LOC) of $ 1.0 billion.
Development of this facility will provide NE-India a shorter IWT-cum-road transport link to Kolkata. In the
process, India will gain considerably in terms of transport cost savings per ton of cargo moving across
Bangladesh, besides substantial time savings. Bangladesh should also be able to earn IWT charges, road
transport charges, transshipment charges as well as “transit fees” (a part of the savings in transport cost per ton
when the transit cargo will be traveling through a shorter route across Bangladesh viz-a-viz the existing long
route through the chicken neck). The amount of “transit fee” to be charged shall have to be decided based on
mutual discussion between India and Bangladesh to make it a win-win situation for both.

Container Movement by Rail and IWT 

As indicated earlier, there is no direct overland container movement between India and Bangladesh. All
containers move along rail-cum-sea route via Mumbai, Singapore and Chittagong. As part of the Joint
Communique, direct container movement by rail and IWT would now be allowed. In this context, it may be
noted that Jamuna Bridge has no restriction for ISO containers movement. But there is a limitation on the
number of trains that can pass through the bridge in 24 hours. It is learnt that the bridge is almost fully saturated
as regards rail capacity. After crossing Jamuna Bridge, containers can move up to Dhaka ICD through dual
gauge. An IWT container terminal in the public sector is under construction at Pangaon, and a few more private
sector IWT container terminals are also under development, one by Rupayan and the other by Kumudini.
BIWTA is trying to use its old Khanpur Jetty near Narayanganj for
container handling, but because of poor accessibility and limited space availability, no private sector is finding it
attractive to invest in that inland port.
These IWT terminals under both public and private sectors, when
developed, will facilitate direct container movement between Kolkata and Dhaka as well as between Dhaka and
Chittagong and Mongla-Dhaka. Self-propelled barges to carry containers are already under construction by
private sector in Bangladesh.

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Assessment of Likely Traffic

An analysis of geographical location of certain NE-India States revealed that due to their physical proximity to
Bangladesh, and convenience of transport connectivity with Bangladesh by road, rail, and IWT-cum-road
transport, sizeable traffic could get diverted to shorter routes through Bangladesh.
Analysis revealed that there could be 100% diversion of inter-state and international traffic from the states of
Monipur, Nagaland, Mizoram and Tripura. On the same logic, partial diversion could occur from South-eastern
part of Assam and eastern part of Meghalaya. One of the recent studies assumed that around 35% of traffic from
Assam particularly from Karimganj, Silchar, Lumding etc. and 50% of traffic from Meghalaya could be
diverted. Another conservative study, however, expressed the view that there may be no diversion from Assam
and Meghalaya. But majority of the studies are in support of sizeable diversion from Assam and Meghalaya.
Similar analogy was applied to Nepal and Bhutan as well. It revealed that 50% of freight traffic to and from
Nepal could potentially be diverted, while for Bhutan 100% diversion along Bangladesh routes is possible. The
partial diversion of the Nepalese traffic is due to cost disadvantage of rail corridor Birgunj-Rohanpur-Mongla
port vis-à-vis Birgunj-Kolkata which is shorter by 200 km.
In the light of the above analysis, potential transit traffic was estimated to range between 3 and 18 million,
depending on conservative and optimistic assumptions of potential traffic diversion. Out of the optimistic
assumption of transit traffic, around 10% is expected to be international traffic and the rest would be inter-state
traffic.
It is important to note here that the above transit traffic scenario only covers the “diverted traffic”. Once transit
traffic movement starts, there would be sizeable “generated traffic” as well. Although NE-India is rich in natural
resources, these could not be exploited so far in the absence of access to sea ports. Since Bangladesh has agreed
to allow India to use both Chittagong and Mongla ports, the natural resources of NE-India could now be
exploited through Joint Venture between Indian and Bangladeshi investors, with the prospects of exporting the
industrial outputs through Bangladesh ports. Thus the actual benefit to Bangladesh and India, from transit traffic
movement could be much more than what has been estimated so far.

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India's financial assistance

As part of the Joint Communique signed by India and Bangladesh in January, 2010, Prime Minister of India
announced a line of credit (LOC) of US$1.0 billion for a range of projects, including railway infrastructure,
supply of BG locomotives and passenger coaches, rehabilitation of Saidpur Railway Workshop, procurement
of buses including articulated buses, and dredgers, construction of some road links, and transshipment
facility at Ashuganj.

It is to be noted that this is India's largest loan ever given to any country. The loan carries 1.75% interest
per annum, and is to be repaid over a period of 20 years, with a provision of 0.5% commitment fee per year
on unused credit after 12 months from date of contract approval.

So far around 14 projects have been identified costing around US$601 million. But the power gridline of 400
KV inter-connector between Bheramara and the border costing US$150.86 million is proposed to be financed
by ADB. Thus the net commitment for 13 identified projects comes to around US$451.00 million, and
projects for using the remaining US$550.0 million is still to be identified.

Out of 13 projects, 8-projects are of direct Bangladesh-India interest, 3 are only of Bangladesh interest and
2 projects namely, (a) transshipment port at Ashuganj and (b) reconstruction of Sarail-Brahmanbaria-
Sulanpur-Akhaura-Senarbadi road are directly related to development of facilities for transit traffic. The 8-
projects of Bangaldesh-India interest include: (i) 6-high powered dredgers (ii) 10 BG locomotives (iii) 125
BG passenger coaches (iv) 60-tank wagons with 2-break vans (v) 50 MG flat wagons plus 5-break vans (vi)
2nd Bhairab and 2nd Titas Bridge, (vii) construction of Ramgarh-Sabroom road to provide connectivity with
BD at the Southern end of Tripura, and (viii) capacity building of BSTI laboratory and its staff.

To expedite utilization of the remaining amount of Indian LOC, Bangladesh needs to identify suitable projects
in consultation with India, at the earliest.

The political leaders of India and Bangladesh through their New Delhi Summit on January 10-12, 2010 set
the tone for a long lasting regional cooperation in the area of connectivity and other areas of concern,
covering water sharing, land boundary demarcation, resolving maritme boundary, removal of NTBs, etc.
While most of the outstanding problems have been flagged by the Joint Communique, the real benefit will
accrue only when the commitments are honoured by both the governments and necessary actions taken to
address the outstanding problems.

With regard to transit related issues, Bangladesh government is seriously implementing the various
understanding reached at New Delhi. Once the priority facilities have been developed properly as
programmed, transit traffic from NE-India, Nepal and Bhutan would find it attractive to transit through
Bangladesh, and use its ports. The savings of transport cost for the transit traffic could range between 12%
to 76% depending on the transit route being used, besides considerable time savings, due to shorter trip
lengths.

According to optimistic estimates, potential transit and international traffic could be around to 18.00 million
tons of which inter-state traffic could be around 16.00 million tons and international (including Nepal &
Bhutan) could be around 2.00 million tons. These are diverted traffic only. Once regional traffic movement
starts across Bangladesh and NE-India gets access to the Sea Port of Chittagong, there would be enough
incentive for the exploitation of untapped natural resources, where Bangladesh should also get an
opportunity to invest in joint venture projects in NE-India. Such developments would give rise of large scale
generated traffic, with consequent employment generation and several other types of multiplier effects.

Regarding the mode of transport, Railway and IWT shall have to carry most of the transit traffic. In order to
facilitate movement of high value and perishable commodities across Bangladesh, a network of expressways
(toll roads) need to be developed through involvement of private sector on BOT (build, operate and transfer)
basis.

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In order to make the Bangladesh transport system fully in gear to carry both the anticipated transit traffic
and also the projected national traffic, considerable investment of around 5-7 billion dollars would be
required over the next 5-7 years. Against this requirement, India has offered US$1.0 billion Line of Credit
@1.75% interest per annum. Bangladesh shall have to mobilize rest of the resources, of which some are
already in the pipe line. Initially Bangladesh transport system can perhaps carry around 10% of potential
transit traffic, and it may need another 3-5 years to put its transport system in full gear to start carrying the
entire transit traffic.

Inland Water Treaty

India and Bangladesh signed the Protocol on Inland Water, Transit and Trade in 1972. However, river transit
has remained of limited utility to India given the fact that very few rivers are navigable throughout the year.
Bangladesh levies BDT20 million annually on India for allowing it to use its waterways. On 1 April 2009, the
Indo-Bangladesh Protocol on Trade and Transit was extended by two years. Irrespective of who has been in
power in Dhaka, this treaty has been extended by two years, each time it has expired. Since January 2002, the
BNP has extended it periodically. The treaty was extended 21 times during the four party alliance government.
It was only after the army-backed caretaker government assumed power that the treaty reverted to being
extended for two years each time. Given the fact that the treaty has been in existence for more than 35 years,
both countries need to seek a long-term arrangement. A new river route for linking India’s Northeast to
Bangladesh has been proposed. Bangladesh and India already have eight specific routes for river transit
connecting West Bengal and Assam with Bangladesh. During his visit to Dhaka in 2007, Minister of State for
Commerce and Power, Jairam Ramesh requested Bangladesh to allow India the use of the Ashuganj river port
for the transportation of goods from Tripura, which is just 62 kilometres away from the port. This proposal is
being considered and does not constitute part of the recently extended protocol on trade and transit.

Port Facility

Similarly, Mongla port can be developed to handle cargo from India, Nepal and Bhutan. Allowing the
northeastern states of India to use the Chittagong port while allowing the western districts of Bangladesh to
use Kolkata, Haldia and Kulpi ports as quid pro quo to facilitate trade, has been suggested.

How to make further progress (Dr. M. Rahmatullah, Regional Connectivity: Opportunities for Bangladesh to be
a Transport Hub)

Mobilization of Political Support

To establish effective regional transport connectivity, political support is a must. In order to mobilize such a
support, it is essential to ascertain the real dimensions of the political constraints and types of reservations. To
this end, dialogues could be organized in each of the North Eastern sub-regional countries of South Asia,
involving the entire civil society including the Chambers of Commerce and Industries to find the real scope and
depth of the political reservations, so that some solutions acceptable to the politicians could be found.
Representatives of the Government Intelligence Agencies need to be involved in the dialogues to ascertain if
there is any security issue that needs to be addressed. Civil Society Institutions in each of the countries
involved, need to take initiative to set the ball rolling.

Various Issues need to be addressed

26
Together earlier consultations with some of the SAARC member countries revealed that problems related to
regional transport connectivity cannot be resolved in isolation. This needs to be looked into together with
other outstanding problems in trade, environment, water sharing, border disputes, international maritime
boundary settlements, etc. Strong political commitments of the countries concerned are needed to address
these diversified problems together, to find a long lasting solution. This issue may also be discussed at the
dialogues referred to above.

Need to Improve Facilitation Measures at the Land Ports/Rail Heads at the Border

Considerable difficulties exist at the land border crossings. Besides, the physical constraints indicated earlier as
part of different routes, other constraints include inefficient customs operations, lack of bilateral/multilateral
transport agreements, lack of transparency in inspection procedures, informal payments and inadequate
preparation of customs documentation by shippers, etc. None of the borders yet have on-line customs IT
connectivity to facilitate faster clearances. Banking, medical, communication, warehousing, security and
firefighting facilities are deficient and wayside amenities are absent in many of the land ports. Due to lack of
adequate parking areas for trucks, vehicles are parked on the road creating acute congestion. At most of the
border points, there is only one exit route for both passengers and goods. All these problems need to be
addressed properly to facilitate smooth movement across the border.

Awareness Creation Needed About the Cost of Non-Cooperation

A process of awareness creation through dialogues, about the mutual benefit of regional transport
connectivity, or cost of non-cooperation, based on a study could go a long way in persuading the political
leadership and the people at large, about the importance of transport connectivity. This study could focus on a
number of selected corridors/routes. Estimate of benefit should not be based on diverted traffic only, but also
on potential traffic/trade that could be generated once the selected routes are available to regional traffic.

Transport Integration Would Need Nominal Resources Only

The neighboring countries around Bangladesh, given their physical and cultural proximity and shared history
and heritage, form a natural area for transport integration. Most of these countries once formed part of an
integrated economy, and their transport system was fully integrated, but they probably constitute one of the
less “internally connected” sub-regions in the world today. The integration of transport networks would,
therefore, largely involve a reintegration of existing infrastructures, requiring minimum commitment of
additional economic resources.

Need To Involve People At Large

In order to achieve a long lasting solution, it is essential that concerted efforts be made together by all
stakeholders: the governments, the private sector and the civil society at large to bring about a change in the
political mind set of the leaders, so that a long lasting solution can emerge. The Civil Society Institutions
including the Chambers of Commerce and Industries in the member countries could be urged to take the
initiative to bring the above players together. Unless this challenge of integration is addressed soon with
seriousness by all stakeholders, the countries/territories of the North Eastern subregion of SAARC in general,
and the land-locked countries/regions in particular, stand the risk of foregoing many of the economic
opportunities that the process of globalization could have provided.

Recommendations (Dr. M. Rahmatullah)

27
 In order to make further progress in the area of regional cooperation in transport, governments both
individually and jointly should consider the following issues and take immediate actions on these: i. Bangladesh
may agree to provide transit/transshipment facilities to India by rail and road, similar to IWT (which was
provided since 1972). ii. Bangladesh should agree to provide transit/transshipment facilities to Nepal and
Bhutan to have access to its sea port of Mongla, for their third country trade. (Bangladesh needs to seek India’s
support and agreement to the movement of third country trade of NepalBhutan through Bangladesh port of
Mongla). iii. Bangladesh, India and Nepal should agree to adopt bilateral/multilateral rail transport agreements
for through movement of containers/goods across Bangladesh. iv. To make railway operational as soon as
possible, following actions need to be taken on a priority basis: (a) recommissioning of railway link between
Mahisasan/Shahabazpur – Kulaura, (b) establishment of transshipment facilities, in the long run, at Dhirasram
(near Tongi) for transferring containers from BG to MG and vice versa, (c) augmentation of holding capacity of
loops and yard lines at Darsana, Benapole and Rohanpur stations, (d) construction of a rail link between
Akhaura and Agartala, (e) gradual increase of the compatibility between rolling stocks of India and Bangladesh,
(f) acquisition of flat wagons and covered wagons to handle the future transit/transshipment of traffic. v.
Considering limitations of Bangladesh roads, (2-lanes, built on lower design standards). Bangladesh inter-
district road transporters should provide the logistic support to transfer goods/containers of Indian perishable
and high-value commodities from one border station to the other border station across Bangladesh. vi.
Concerned governments should agree to (a) upgrade the access roads to all major land ports, to their national
highway standards; (b) establish modern transshipment facilities at these land ports to facilitate simultaneous
loading and unloading at several points, and (c) build warehouses for storage, as necessary. vii. To make IWT
more competitive, Bangladesh may agree to designate “Ashuganj” as the new transshipment port to allow
transfer of goods/containers to Bangladesh inter-district multiaxle road transport vehicles for onward
movement to the border point at Akhaura. viii. To ensure safety and security, all concerned governments need
to agree that goods and containers that will be transported across Bangladesh, shall have to go through
scanning machine before loading and that these will move under bond with full insurance cover. Vix. To
facilitate faster clearance of goods/containers at the major land ports, all concerned governments require
agreeing on the establishment of on-line customs IT connectivity.

2.1 Working agreement to reopen Bongaon-Jessore railway line 1990

The Ershad government signed a working agreement with India in 1990 to reopen the old Bongaon (India) and
Jessore (Bangladesh) broad gauge railway line which had been closed since the India-Pakistan war in 1965.
Unfortunately this has not been implemented.

2.2Proposed Protocol between India and Bangladesh for Arrangements

for the Use of Chittagong and Mongla ports by India
The Indian government prepared an official draft document styled “Protocol between India and Bangladesh for
arrangements for the use of Chittagong and Mongla ports by India". The Indian High Commission in Dhaka sent
the draft protocol dated December 7, 2010 that was received by the Ministry of Foreign Affairson March 29,
2011, suggesting signing of a deal for seven years with the provision of renewal for a further seven years on

28
mutual consent. But this protocol is yet to come into force. The draft protocol talking about arrangements for the
use of the Chittagong and Mongla ports also includes topics related to transit through Bangladesh.

Key facts of Protocol

 It’s a detailed proposal mentioned customs and other procedures for import/export of goods from or
to India and movement of goods from one part of the country to another through Bangladesh.
 The protocol identified 15 rail and road routes for transit through Bangladesh. The routes are --
Akhaura-Agartala (both rail and road), Sabroom-Ramgarh, Demagiri-Thegamukh, Bibir Bazar-
Srimantpur, Belonia-Belonia, Betuli-Old Raghna Bazar, Chatlapur-Manu, Tamabil-Dawki,
Borosora-Borosora, Haluaghat-Ghasuapara, Sunamganj-Shellbazar, Darshana-Gede (rail),
Rohanpur-Singhabad (rail), Birol-Radhikapur (rail), and Benapole-Petrapole.
 As per the draft protocol, India will submit necessary papers and full details of the LCs to
Bangladesh customs to import goods from a third country. The importers and exporters will
specifically mention to Bangladesh which route of the country is to be used.
 Article 8 suggested formation of a joint committee to solve any problems that arise.
 Article 9 recommended formation of an inter-governmental committee which shall meet at least
once in six months alternatively in Dhaka and New Delhi.

3.0 The Economics of Transit

In Bangladesh transit is considered by many as "concession to India" and by some as "loss of sovereignty". The
economic issues of transit should be given proper attention as the confused thinking has clouded many
misguiding issue unnecessarily. When the rest of the world is getting better integrated through transport
network, trade and investment, Bangladesh and rest of South Asia remain isolated as a region. Legal trade
among South Asian countries is very limited, investment flows are negligible and physical connectivity is highly
restrictive. The lack of transit agreement for traffic between Bangladesh and other neighboring countries is a
reflection of this broader anomaly. Deep suspicion, historical baggage and unhealthy politics remain as major
constraints to strengthening economic relations between South Asian countries. Similar difficulties have also
constrained the relationship between Bangladesh and India. 

More broadly, it is a good policy for South Asia in general and for the North-east sub-region of South Asia in
particular. Transit access for neighbors opens up a whole host of political opportunities for addressing long-term
difficult regional issues relating to immigration, water sharing, and security issues. The gains are win-win for all
parties. The economics of transit: An analytical framework In some debates the transit issue has been too
narrowly placed as a matter of charging the right "transit fee". The "transit fee" issue is also cast misleadingly

29
into a discussion of extracting maximum "rent from geography" as opposed to a "fee on export of services". To
avoid rent-seeking behavior owing to geographical location advantages, there are a range of international
conventions under the World Trade Organizations (WTO) that guarantee freedom of transit. Compliance with
these international conventions is a part of good economics as well as good politics. Key development
challenges:

Given present low levels of development, the investment opportunities in India's 7-sisters states of the Northeast
are quite large. In view of its location advantage, Bangladesh should have huge comparative advantage vis-à-vis
other Indian states in terms of transport cost for reaching out markets in India's 7-sister states. There are already
some examples of very positive experience of Bangladesh investors in these Northeastern states. These include
the experiences of the Pran Group of industries and Naseer Glass. Better infrastructure and lower transaction
costs will further boost opportunities including possibility of benefitting from contract farming and agro
industries.

3.1Transit and Trade

South Asia is well known for inter-regional conflicts and lack of economic cooperation. Consequently, political
boundaries tend to become physical barriers to trade. One result of this is that inter-regional trade is overly
restricted by cross-country regulations and logistical barriers. As a result trade logistic costs are much more
serious barriers to inter-regional trade than tariff barriers. Trade relations between India and Bangladesh, while
seemingly positive, are similarly restricted by the large cost of trade logistics. Additionally, a part of India on
the North East is separated from the rest of India by Bangladesh, except for a very narrow transport corridor,
known as the 'chicken neck'. Bangladesh does not allow India transit access for trade to the North Eastern states.
These seven North-eastern states of India also do not have access to sea except through Kolkata that requires
passage through the round-about chicken neck. For example, the distance between Agartala (India) and Kolkata
is over 1600 kilometers. In comparison, the distance between Agartala and the nearest seaport in Bangladesh
(Chittagong) is less than 100 kilometers. Understandably, transport costs of trade for these North Eastern states
are very high. Furthermore, two landlocked countries, Nepal and Bhutan, have not had transit facilities through
India to access Bangladesh ports of Mongla and Chittagong.

Fortunately, this limiting restriction on trade movements is about to change. India and Bangladesh are in the
process of negotiating a transit agreement to allow traffic between west Bengal and the landlocked Indian states
in the North East through Bangladesh. It is expected that this framework will also help Nepal and Bhutan trade
internationally through Bangladeshi sea ports. The transit has been a thorny issue in Indo-Bangladesh political
and economic relations for a long time. So the change in political mindset is a huge step forward.

30
On the above highlights, it is easy to understand that landlocked countries and landlocked regions within
countries depend totally on transit facilities provided by contiguous neighbors for their domestic and
international trade. At the same time it should be kept in mind that transit procedures should be simple to avoid
excessive delays and costs, besides conforming to relevant international conventions. Poorly implemented
transit is a major obstacle to trade.

3.2Infrastructure investment for Transit

Before initiating a negotiation on transit between Bangladesh and India, it is required to estimate the
infrastructure investment for the identified routes for transit. Based on practical data available in the Roads and
Highway Department and in Railway, investment for establishing new roads per kilometer or for upgrading the
existing roads per kilo meter could be estimated. In this process it will be required to adjust the additional
investment as the axle load for transit vehicles will be higher both in rail and road tracks. The project of fixed
investment with depreciation which is estimated in the above mentioned techniques should be equally
acceptable to both the negotiating parties. Otherwise, the whole effort of finding a point of consensus may result
in non-cooperation at the very early stage. To this end, what it should be better is to reach on prior consensus on
the methodology of the estimation so that there will be no point to ask any question from either side.
Alternately, each negotiating party can independently estimates the fixed investment for the agreed routes with
pre-determined standards and based on these estimates, discussion could be initiated for reaching agreed
estimates.

3.3New Turn in Connectivity between Bangladesh and India

During the visit of Prime Minister of Bangladesh in Delhi in 2010, some sector-specific areas of cooperation
between the two countries were identified which need to be addressed first. Accordingly they set the key point
of action as commitments to make future path of ties and cooperation more strengthened and active. These
commitments are issued through Joint Communique based on which the implementation and follow up strategy
will be devised. From Bangladesh part this initiative got immense attention as Prime Minister’s Office (PMO)
formed a high powered Sub-regional Cooperation committee headed by Finance Minister as the Chair and nine
other concerned Ministers as members. This committee will coordinate with the line ministries to speedy
implementation of decision stipulated in different paragraph of Joint Communique and PMO in coordination

31
with Ministry of Foreign will consult with Government of India through Indian High Commission in Dhaka. To
provide administrative/secretarial support to the committee, Sub-regional cell in PMO is formed with the
supervision of a Director General and two other directors under him. In its first meeting the committee clearly
assign ministries/departments to implement the commitment as it is given highest priority by the Hon’ble Prime
Minister. As part of this initiatives a core committee on transit was formed for background study to prepare the
key issues for bilateral discussion between Bangladesh and India. Subsequent the committee submitted a report
on transit with detailed analytical analysis on various issues which were needed to take in to account during the
negotiation between Bangladesh and India. A framework agreement was supposed to be signed during the visit
of Prime Minister of India in Dhaka in September 2013. Unfortunately the agreement was not signed as the
issue of transit got tangle with the Teesta water sharing agreement which could not be signed due to oppose
from Chief Minister of West Bengal.

Yet there is diverse plan of action in the Joint communique including economic, diplomatic, commercial and
trade related bilateral cooperation with India, north eastern India by its geographical proximity and close cultural
and trade intimacy occupy a significant part of commitment. Some paragraphs of Joint Communique are
specifically set to provide instructions to strengthen connectivity with north east of India. The matrix (Annexure
I) outlines the key issues relevant to connectivity with North East States of India and the implementing
organization and the status of implementation set by the government of Bangladesh.

4.0 Recommendations on Rail - Road Infrastructures for Transit

The Roads of Bangladesh- usually having two lanes are built on lower design standard. At the present condition,
most of the national high which are key routes in potential transit connectivity are of so poor standard that
without having major reconstruction, it is almost impossible to allow heavy transit traffic. Considering
limitations of the national high ways of Bangladesh, it is initially required to estimate the capital investment
which would be necessary to upgrading the constructionof the roads for allowing transit traffic. In this regard, it
is to mention that SAARC Regional Multimodal Transport Study (SRMTS) has recommended a number of
routes to strengthen connectivity among the countries and territories of North-Eastern sub-region of SAARC.
However, keeping in mind the resource constraints, it would be advisable to focus attention, in the first phase,
on a few routes and land ports. Presented below are 3-most important rail routes, 3-important road routes, and 3-
major rail heads, besides 10 land ports which could be opened immediately to facilitate movement of goods and
passengers between the countries of the North Eastern sub-region.Concerned governments should agree to
follow few facts on road safety infrastructure:

32
  Upgrade the access roads to all major land ports, to their national highway standards;

 Establish modern transshipment facilities at these land ports to facilitate simultaneous loading and
unloading at several points

 Build warehouses for storage, as necessary

 Ensure safety and security, all concerned governments need to agree that goods and containers that will be
transported across Bangladesh, shall have to go through scanning machine before loading and that these
will move under bond with full insurance cover.

Banking, medical, communication, security and firefighting facilities are deficient and wayside amenities are
absent in many of the land ports. Other constraints include inefficient customs operations, lack of
bilateral/multilateral transport agreements, lack of transparency in inspection procedures, informal payments
and inadequate preparation of customs documentation by shippers, etc. All these problems need to be addressed
properly to facilitate smooth movement across the border.

4.1 Recommendations on Custom Infrastructure

The major constraint on connectivity performance is generally found at the points of interconnection. To ensure
efficient operations and effective management of the services provided at the interconnections, it is necessary to
provide sufficient capital investment for infrastructure. Maintaining general efficiency in border clearance will
also need to be addressed in order to ensure uninterrupted operations of the interconnections. In this regard, to
facilitate faster clearance of goods/containers at the major land ports, all concerned governments require
agreeing on the establishment of on-line customs IT connectivity. Besides, government should put emphasis on:

 Use of standardized containers with a harmonized system of barcodes that provide a unique
identification sequence for each container.
• Automation of weighbridges at all border crossings.
• Installation of X‐ray machines compatible for use for large containers.
• Provision of electronic lock systems that prevent or allow detection of tampering with all containers
while in transit.

In addition, mechanisms for simplifying border clearance procedures include the introduction of

 Single administrative document with a standard format;

 Enhancing usage of EDI and internet‐based systems;
 Channeling and risk management
 Movement of transit cargo under improved one‐time seals without border inspections (e.g. TIR carnets);

33
  Improved inspection facilities and equipment;
 One‐stop services; and
 Collocation of clearance facilities.

4.3 Recommendations on Rail Infrastructure

To make railway operational between Bangladesh and India as soon as possible, following actions need to be
taken on a priority basis

 Recommissioning of railway link between Mahisasan/Shahabazpur – Kulaura .

 Establishment of transshipment facilities, in the long run, at Dhirasram (near Tongi) for transferring
containers from BG to MG and vice versa

 Augmentation of holding capacity of loops and yard lines at Darsana, Benapole and Rohanpur stations

 Construction of a rail link between Akhaura and Agartala which is under process.

 Gradual increase of the compatibility between rolling stocks of Bangladesh and India.

 Acquisition of flat wagons and covered wagons to handle the future transit/transshipment of traffic.

In order to establish effective transport connectivity between north eastern states of India and Bangladesh, the
following initiatives could be pursued to make headway:

Strategies and Mechanisms Mechanisms Impacts

for Developing and
Improving Transit Routes
Strategy
Increase and improve
interconnections • Establish new transfer points • Shorten door‐to‐door routes
• Add facilities • Reduce door‐to‐door delays
• Simplify procedures and • Reduce administration
documentation • Reduce processing time
•Standardize documentation • Increase transparency
• Consolidate inspections • Simplify handling of vehicles and
• Relocate inspection inland or at cargo
marshalling yards (for rail) • Value added
• Provide new logistic services • Reduce delays
• Monitor performance

Establish interoperability
• Harmonize technical standards • Increase cross‐border competition and
and rules for operators provide economies of scale
• Simplify allocation of liabilities • Reduce equipment exchange
• Standardize certification

Increase market access

34
 • Allow cross‐border movements • Reduce equipment exchange and cargo
• Deregulate pricing handling
• Commercialize public services • Increase availability of services
• Regulate anti‐competitive • Introduce competitive pricing and
behavior variety of services

Augment route capacity • Capital investment (new, • Improve equipment utilization

expansion, rehabilitation) • Increase operating speed and reduce
• Operational changes congestion

5. Conclusion
In order to achieve a long lasting solution, it is essential that concerted efforts tobe made together by all
stakeholders: the governments, the private sector and the civil society at large to bring about a change in the
political mind set of the leaders, so that a long lasting solution for non-connectivity can emerge. Unless this
challenge of integration is addressed soon with seriousness by all stakeholders, the countries/territories of the
North Eastern sub region of SAARC in general, and the land-locked countries/regions in particular, stand the
risk of foregoing many of the economic opportunities that the process of globalization could have provided.
To establish effective regional transport connectivity, political support is a must. In order to mobilize such a
support, it is essential to ascertain the real dimensions of the political constraints and types of reservations. To
this end, dialogues could be organized in each of the North Eastern sub-regional countries of South Asia,
involving the entire civil society including the Chambers of Commerce and Industries to find the real scope and
depth of the political reservations, so that some solutions acceptable to the politicians could be found.

The analysis indicates that Bangladesh and its close neighbor India, could gain considerably if regional
connectivity is fully established by all modes, and transit/transshipment of goods/containers are allowed across
Bangladesh. It would clearly be a win-win situation for all.

35
References:
1. Rahmatullah M. (2009) Regional Connectivity: Opportunities for Bangladesh to
be a Transport Hub, Journal of Bangladesh Institute of Planners, vol-2, pp. 13-29,
available at
http://www.bip.org.bd/SharingFiles/journal_book/20130721145904.pdf
2. Rahman, S. Khatri, S and Brunner, S(2012) , Regional Integration and Economic
Development in South Asia, available at
http://www.iadb.org/intal/intalcdi/PE/2013/10757.pdf
3. Bhatta, C.( 2013), Regional Integration and Peace in South Asia: An Analysis
available at http://www.bradford.ac.uk/ssis/peace-conflict-and-
development/issue-5/RegionalIntegration.pdf
4. Eusuf, M and Rahman, A. (2005), Cost of Non-cooperation in South-Asia
available at http://www.cuts-citee.org/pdf/BP05-REC-1.pdf
5. Rahmatullah M. (2006), Transport Issue and Integration in South Asia, available
at

36
 http://www.ips.lk/saes/conference_material/downloads/rahamathullah_full_paper.
pdf
6. Future Directions of BIMST-EC:Towards A Bay of BengalEconomic Community
(BoBEC), Policy Brief, available at
http://www.ris.org.in/images/RIS_images/pdf/pbno12.pdf
7. Transport and Trade Facilitation in the Greater Mekong Subregion— Time to
Shift Gears, available at http://www.oecd.org/countries/mongolia/42228102.pdf

8. “Bangladesh and Regional Connectivity: Best Practices from Global

Experiences” by MrHasanuzzaman, Senior Research Associate, CPD; and
MsZeeshaan Rahman, Senior Research Associate, CPD.
9. “Promoting fundamental transit, transport and infrastructure development and
maintenance in the LLDC’s” by by Mohammad Asif-uz-Zaman
10.“Regional Connectivity: Opportunities for Bangladesh to be a Transport Hub” by
Dr. M. Rahmatullah

Annexure I

Para. Points Discussed Implementing Implementation Status

Organization
Transit and Connectivity
22. It was agreed that Ashuganjin To comply with this,
Bangladesh and Silghat in India National Board of Revenue
shall be declared ports of call. The issued circular to declare
IWTT Protocol shall be amended Ashuganj port as Port of
through exchange of letters. A joint Ministry of Call. Ministry of Shipping in
team will assess the improvement Shipping consultation with the
of infrastructure and the cost for Ministries of Foreign
one-time or longer term (tocoordinate with Affairs, NBR and PMO took
transportation of ODCs (Over Ministry of necessary step to renew the
Dimensional Cargo) from Communications existing protocol IWTT
Ashuganj. India will make the for railway.) protocol with some
necessary investment. Both modification for one more
Governments agreed to expedite year. The latest protocol will
implementation. Contractors from expire on Feb 2013.

37
 both countries shall be eligible for Ministry of Communication
the work. in consultation with the GoI
ensured necessary
arrangement for
transportation of over
dimensional cargo carrying
equipment for Palatona
Power Plant in Tripura.
23. It was agreed that Bangladesh will i) Ministry of
allow use of Mongla and Shipping
Chittagong sea ports for movement ii) PMO/MoFA to
of goods to and from India through discuss with Bhutan
road and rail. Bangladesh also &
conveyed their intention to give Napal
Nepal and Bhutan access to
Mongla and Chittagong ports.

24. It was agreed that the construction

of the proposed Akhaura –
Agartala railway link be financed Ministry of
by grant from India. A joint team Communications –
of the railway authorities of the Bangladesh
two countries will identify the Railway
alignment for connectivity.
31. The Prime Minister of India agreed
to supply to Bangladesh 250 MW
electricity from its grid. In this
context, both Prime Ministers Ministry of Power,
emphasized the need to expedite Energy & Mineral
inter-grid connectivity. They also Resources-
agreed that the two countries shall Bangladesh Power
cooperate in development and Development Board
exchange of electricity, including
generation from renewable sources,
and may set up joint projects or
corporate entities for that purpose.

32. With a view to encouraging

imports from Bangladesh, both
countries agreed to address
removal of tariff and non-tariff
barriers and port restrictions and Ministry of
facilitate movement of Commerce
containerized cargo by rail and
water. In this context, Bangladesh (coordination with
welcomed India’s initiative to Ministry of
provide duty-free access to Communications
SAARC LDCs to the Indian for containerized
market. Bangladesh also welcomed cargo by rail &
the reduction of the number of water)

38
 items from India’s negative list that
were of direct interest to
Bangladesh and requested for
further reduction in the list.

33. The Prime Minister of India agreed

to support the upgradation of the
Bangladesh Standard Testing Ministry of
Institute with a view to building Industries
capacity on certification.

34. The Prime Ministers agreed that

investments, including joint
investment and joint ventures, shall Prime Minister’s
be encouraged by both countries. office - Board of
They agreed that the participation Investment
of the private sector in both
countries will give an added fillip
to economic engagement between
the two countries.

35. The Prime Ministers agreed to

operationalize land customs
stations at Sabroom-Ramgarh and
Demagiri- IRD/NBR- Customs
Thegamukh,includingputting in
place necessary infrastructure and
issue necessary notifications.
Further, with respect to existing
land custom stations, it was agreed
to take measures for strengthening
infrastructure.

36. It was agreed that border haats

shall be established on a pilot basis
at selected areas, including on the
Meghalaya border, to allow trade Ministry of
in specified produces and products Commerce
and in accordance with the (with IRD/NBR)
regulations agreed and notified by
both Governments.

39