India is pushing for better land connectivity with neighboring Nepal and Bangladesh for effective sub-regional cooperation despite the obstacles created by the absence of SAARC Motor Vehicles and Railways Agreements. In what would be first of its kind, India has expressed interest to link Kathmandu with Delhi and Kolkata, using direct railway lines in a bid to strengthen cross-border connectivity and facilitate people movement between the two countries.
Railways Minister Suresh Prabhu announced this during a trip to Kathmandu last weekend. Besides, the Modi government ahead of PM Sheikh Hasina’s proposed visit to India either March-end or early-April has asked the state-owned Container Corporation (Concor) to explore ways to run a cargo train to Bangladesh with an aim to enhance bilateral trade.
“These two railway tracks (Delhi-Kathmandu & Kolkata-Kathmandu) must be built soon to increase Nepal’s connectivity with India,” Prabhu said while delivering a keynote speech at the Nepal Infrastructure Summit 2017, which kicked off in Kathmandu last Sunday. “I will give priority to build such networks soon,” he said. Currently India and Nepal are connected by a directed bus service launched in 2014.
Stating that infrastructure was a prerequisite for higher economic growth, Prabhu urged Nepal’s government and private sector to ramp up investment in construction of physical infrastructure. Urging foreign investors to invest in Nepal’s infrastructure development, he said such investment will offer double benefit to them.
“If you invest in infrastructure in a country with wide infrastructure gap, you will get a good return on investment. Also, economic growth triggered by infrastructural development will provide additional benefits to investors,” Prabhu told the two-day summit organized by the Confederation of Nepalese Industries in association with the Prachanda government and Youth Community for Nepalese Contractors.
Nepal needs to invest up to $18 billion in infrastructure projects by 2020 to remove binding constraints to economic growth, said a World Bank report. Of the total amount, up to $7 billion should go to the energy sector, especially development of hydropower projects, and another $5.5 billion should go towards the transport sector, the multilateral lending agency has said.
“Currently, our focus is on development of infrastructure in energy and transport sectors,” said Nepal’s Prime Minister Prachanda on that occasion. Nepal must increase its infrastructure investment from 4% of gross domestic product (GDP) in the last 15 years to 8 to 12% of the GDP, according to officials here.
By doing this, Nepal can accomplish key infrastructure milestone by 2030, such as generating 10,000 MW of electricity, connecting all cities and local bodies with blacktopped roads, completing construction of [Kathmandu-Tarai] Fast Track and other expressways, having modern international airports, providing quality basic services and expanding irrigation networks across the country.
But Nepal is not the only neighbour with which India is seeking to improve connectivity as part of Bangladesh-Bhutan-India-Nepal and BIMSTEC Initiatives with connectivity projects under SAARC not making headways due to Pakistan’s intransigence. BBIN Motor Vehicles Agreement is already in place and BIMSTEC is also exploring better connectivity initiatives among seven member states.
Bangladesh has emerged as one of India’s closest neighbors after Bhutan and Concor is further exploring ways to run a cargo train to the eastern neighbors. There are currently three rail links to Bangladesh — all through West Bengal — and all of them remain under utilised. Of the three, the Gede (India)-Darshana (Bangladesh) link, which opened in 2008 offers broad-gauge connectivity to the key consumption centre in Dhaka; it is used to run a passenger train four times a week.
A BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) trade logistics study of 2010 pointed out that rail movement can be 30% cheaper than even sea freight (which is normally considered the cheapest) between the two nations.
Railways have had little relevance so far to Indo-Bangla trade, which moves mainly on non-containerised trucks. But this situation can be altered and the near-term solution may lie in shifting the cargo from road to rail, as was visualised by the Atal Bihari Vajpayee government while connecting Petrapole land port by rail in 2001, according to persons familiar with the developments. Bangladesh is looking to create a dry port or an inter-modal transhipment facility in Bangladesh.