Infrastructure Linkages for Regional Development and the Importance of Cross-border Connectivity

Kavita Iyengar India Resident Mission Asian Development Bank May 2018

Disclaimer: In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area. Outline of the Presentation

1. The Asian Context 2. Transport linkages to enable manufacturing and trade • Road • Rail • Waterways • Air 3. Logistics and Trade Facilitation 4. Developing Energy infrastructure 5. Going ahead: The Drivers for Creating Opportunities

2

Share of Major Regions in World GDP

RoW, 5.4%

US, 33% Asia, 34%

EU, 28%

Baseline 2009 Year 2014 Asian Century Scenario 2050

4 South Asia: the Least Integrated Region in the World

50 Intra-regional Trade Share (%) 1990 45.5 100 hours for 45 2014 trucks to cross 40 37.5 35.50 between 35 & 29.20 30 Benapole 25 20 200 signatures

15 in Nepal to trade goods 10 7.1 7.4 4.8 5.3 with India 5 2.7 0.1 0 ASEAN+3 Central Asia Oceania South Asia East Asia

Source: ADB ARIC Trade and Integration database (www.aric.adb.org); raw data from IMF DOTS

5 India’s Merchandise Trade 2016-17 2006-07 2016-17 2006-07 Region % of % of Exports % of Exports % of Imports Imports North America 16.23 17.28 7.70 7.64 European Union 21.21 17.09 16.06 11.02 NE Asia 15.33 12.52 16.96 24.73 ASEAN 9.98 11.23 9.70 10.56 South Asia 5.11 6.97 0.82 0.73 Africa 5.89 6.46 6.35 4.58 Latin America 2.95 2.62 2.86 4.50 Other European Countries 1.11 1.74 0.21 0.32 South African Customs Union 1.80 1.37 1.36 1.88 East Asia (Oceania) 1.17 1.22 4.08 3.07 CARs Countries 0.15 0.12 0.07 0.15 6 Source: Ministry of Commerce and Industry, Government of India, website Transport • Road transport is the dominant mode (65–70% of movement) but substantial missing links across national boundaries • Post 1947, border management led to closure of historical land routes • IWT transit was restored in 1972 • Transit through Pakistan from India to Afghanistan remains suspended • Incompatible transport technology platforms emerged impairing interoperability, esp rail Trade Facilitation Indicators

350

India 300

250

200

150 China 100 South Asia

Singapore 50 Thailand Time to import: Border compliance (hours) compliance Border import:to Time Nepal OECD 0 0 20 40 60 80 100 120 Time to export: Border compliance (hours)

Source: Ease of doing business, World Bank 2015.

8 The Garland of an Integrated Asia

SASEC

ASEAN Association of Southeast Asian Nations BIMP-EAGABrunei Darussalam-Indonesia-Malaysia-Philippines East ASEAN Growth Area BIMSTEC Bay of Initiative for Multisectoral Technical and Economic Cooperation CAREC Central Asia Regional Economic Cooperation GMS Greater Mekong Subregion IMT-GT Indonesia Malaysia Thailand Growth Triangle PIF Pacific Islands Forum SAARC South Asian Association for Regional Cooperation

Disclaimer: In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in 9 this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

Asian Highway

11 Trans-Asia Railway

12 Dibrugarh Tinsukia

Tinsukia Gelephu North Lakhimpur

Bongaigaon Tezpur Jorhat Srirampur Pandu Silghat NH 27 Nagaon Joghigopa Nalbari

Dhubri Gauwahati

Mainland trade NH 27 Tamabil Trade to South and South Sutarkandi Imphal Sylhet East Asia Sheola Silchar

Tamu Moreh

North East trade Spine

Waterways

IW Ports Sabroom Ramgarh Coastal ports

Airports Mongla LCS Zorinpui To Sittwe Development of multi-modal transport

1 2 3 Third Country Trade with – Assam - Bangladesh / Assam – Trade with rest of ASEAN, SAARC via

Bhutan / Myanmar Bilateral India via Bangladesh

Trade Bangladesh & Myanmar

Transshipment / Transit via

Multi-modal means of transport

Roadway Airports Coastal Shipping Railway Inland Waterway

International Border Gateway Coastal Shipping routes between IW Routes between Assam – India - Bangladesh Bangladesh – Rest of India • Bongaigaon - Gelephu • Use of Chittagong and Mongla Ports for • Dawki – Tamabil movement of goods to and from India envisages multimodal routes from Chittagong • – Shilghat – Kolkata • Sutarkandi – Sheola to Sutarkandi (Assam) and Dawki • Kolkata – Karimganj – Kolkata • Sabroom – Ramgarh (Meghalaya) • Moreh – Tamu • Shilghat– Karimganj– Shilghat • Agreement on Coastal Shipping links Indian • Zorinpui east coast ports to Bangladesh Road Routes

Tinsukia Bhutan Dibrugarh North Lakhimpur Sibsagar

Tezpur Jorhat To Bongaigaon Siliguri Nalbari NH 27 NH 27 Nagaon Srirampur NH 27 Dhubri Joghigopa Guwahati Nagaland Custom Diphu Dimapur Station Waterways NH 27 Meghalaya Spine East West Dawki Corridor AH, Asian Bangladesh Manipur Highway Karimganj Silchar SAARC Rail To Dhaka-Kolkata Sutrakandi Imphal Corridor 1 To Dhaka via AH1, then to NH 37 SAARC Chittagong port via AH41 Corridor 5 To Kolkata-Delhi Moreh Myanmar via Bangladesh To Sittwe port

Slide 15 Mapping the Rail Network

Existing network

Under implementation

Future plans

Slide 16 Inland Waterway Transit and Trade Protocol Routes

4

1

3 2

PANGAON

KolkataShilghatRajshahi (West 3412 Bengal)(Assam)(Bangladesh) – – – ShilghatKarimganjDhulian (West(Assam) –(Assam)Bengal) Kolkata – – (West Bengal)KolkataShilghatRajshahi (West Bengal)(Assam)(Bangladesh) Air Connectivity

Aviation as a key Key interventions to propel enabler for all industrial the growth in the sector segments • Air cargo terminal at Guwahati for enabling

pharmaceuticals, agriculture • Overcomes the terrain and food processing exports challenges of the region • Guwahati Aerotropolis • Critical for education, (proposed by MoCA), could pharmaceutical, tourism and be hub station and main medical tourism sectors MRO base for small turbo- • Supports all aspects of trade prop aircraft • Connectivity to hinterland • Develop Silchar Airport to • Connectivity within NER- capitalize on geographic under UDAN dividend • Connectivity to eighboring • Route dispersal guidelines countries – under proposed under UDAN-2 covering 19 UDAN II aviation destinations in the NE region Slide 18

Road network needs improvement

Currently 2-laned road,Import BlackCurrently board, liquor 2-laned upgradation to 4-lane road with below par Galephu under progress,Export Petroleumcondition, products with • Currently preferred by logistics service providers for movement moderate congestion moderate congestion Currently 4-laned between Guwahati and Imphal, Srirampur Bongaigaon road with very good Nalbari heavy congestion condition,• lowShorter route for reaching Silchar NH 27 congestion • Cargo movement suffers from Golakganj from Guwahati Nagaon ad hoc economic blockades on • Currently preferred by logistics Joghighopa NH 27 Dimapur Kohima-Nagaland stretch Guwahati • Currentlyservice 2-laned providers road withfor poormovement AH 1 / • Logistics cost close to INR 15/kg NH 6 NH 29 maintenancebetween Guwahati and Silchar Bajengdoba • Heavy passenger(~ 3 buses’times thantraffic Delhi -Guwahati Shillong • Majorlycost) poorlyprimarily maintained due illegal 2taxes-laned • Not preferredroad byexcept logistics Guwahati services-Shillong NH 6NH 27 Kohima collected at unauthorised tolls providersstretch (4-laned, very good • 4-laning of Dimapur-Kohima • Route fromcondition) Zokhawthar to Guwahati Coal, Limestone and Dawki stretch expected to be complete Import via Silchar is currently undergoing 4 Boulder stone by next year laningImphal Food items and NH 37 Export • 4 Lane Length: 32% plastic products Sutarkandi Silchar Food items, cement, Currently,Import stretch of NH 37 AH 1 / plastics NH 29 Moreh Import Beetel Nut between Jiribam and Imphal is Sabroom DhakaCitrus fruits, ginger blockedExport due to a damaged Wheat Flour, Pulses and beetel leaves Export bridge and requires immediate and Pear Lawangtalai attention;Mongla prone Port to landslides Chittagong Port Economic Centre Zorinpui Border town/LCS Other major Slide 20 towns/ports Sittwe Port Network Development Plans

With the under construction and sanctioned projects, electrification of the entire main-line section of the Route expansion North East Frontier Railway has been covered, except, plans the southern part of Lumding, few branch lines, and, the Rangiya-Mukongselek section.

• Rail connectivity between Aizawl and Imphal in place by 2020 with a double gauge track All NER capitals • Rs 5,606 crore earmarked for 15 new rail lines and 6 double to be connected track projects by double gauge • Guwahati, Itanagar and Agartala already had double tracks, line by 2020 while Imphal to be double-tracked by 2019

• Connectivity to the railway network of Myanmar to link up with the 81,000 km-long Trans-Asian Railway Network (TARN) Trans-national • Jiribam-Tupul-Imphal line, 111 km, to provide connectivity to railway Moreh connectivity • Agartala-Akhaurah link to Chittagong port, resource-rich Sylhet and capital Dhaka. Slide 21 Rail Network will play a critical role in regional connectivity

First railway station proposed at Toribari (Bhutan); to be linked to Hasimara (India)

There are 3 operational Plans to re-establish rail broad guage rail links between West Bengal and link between Shahbazpur Bangladesh (Bangladesh) and • Gede – Darshana Mahisasan (India) (broad gauge mostly used for passenger Indian Railways plans to link movement) Manipur- Myanmar’s railway network Myanmar rail (Mandalay) via Moreh in • – Rohanpur link at Moreh Manipur as part of the Trans- (broad gauge cargo Asian Railway Network transit link for Nepal) • Petrapole – Benapole (for bilateral trade) Akhaura 15.06 km broad gauge link (part of the Trans Asian Railway Network) to connect Indo- • - Biral Agartala rail link Bangladesh rail networks and facilitate trade meter gauge between Bangladesh and the landlocked NER Additional rail links • This will connect Agartala with Ashuganj proposed to be restored and Chittagong / Mongla port – Enabling include: Indian ships docked in Chittagong port to • Haldibari - Chilahati use rail link to access NE India • - • It will also connect Agartala to Kolkata via Burimari Dhaka (thereby reducing the current distance by over 1000 kms) IWT to connect NER to rest of India

Cargo movement via Siliguri Corridor • Only one NH (NH- National waterway-2 (NW-2) 31/31C) and one railway line (broad gauge) Chicken’s Neck • ~ 49 million tonne cargo National Waterway-1: Corridor Towards Bihar, Uttar Pradesh & hinterlands of annually resulting in Northern India heavy congestion

Barak River • Immense potential (NW-16) through Indo- Bangladesh Protocol

Kolkata (IBP) route

Chittagong Port Mongla Port • NW-2 provides access to Bhutan via Jogighopa

Existing Port of Call • NW-16 can provide Proposed Port of Call alternative route NE states

Logistics facilities

Rail movement of bulk–break bulk cargo is through Indian Railways’ Goods Sheds—New Guwahati (B.G.Godown) and Changsari

• For BG Godown faciity- • Inbound commodities (2.76 MMT in FY 17) include cement, fertilizers, edible oil, iron goods, and sugar. • The outbound traffic is negligible, majorly being petroleum coke and cement. • Changsari majorly handles food grains, including rice and wheat. It handled 0.23 MMT in FY2017, with rice comprising 90%. Slide 24 Jogighopa MMLP

Major Commodity • Tea • Cement • Iron, Iron Goods and Steel • FMCG Products • Food Grain & Seeds • Machinery Origin Destination Analysis: Major transit of break bulkItem goods & • Tea originates in Upper Assam and moves to mainland India Hardware • Cement originates from Meghalaya and moves to mainland India • FMCG goods move from mainland India to North East • Iron and steel, food grain and seeds and machinery item move from mainland India to Assam. • Container cargo moves to Haldia Port with Upper Assam, Meghalaya and Rest of North East contributing 81%, 14% and 5% respectively.

Power Sector in North-East The region has abundant hydro potential and resources of for thermal power generation

• Solar: Potential of setting up 62 GW of solar PV. Installed capacity is only 50MW, MNRE has targeted 1.2 GW by 2022, against the national target of 100 GW. • Hydro: With perennial rivers, the region accounts for 40% of India’s hydro potential but utilizing only 2% of potential. Of the total 63 GW potential only 1.7 GW is currently operational and 4.5 GW is in various stages of construction. • Wind: Resource potential has not yet been estimated.

• NEEPCO is augmenting generation capacity and can supply surplus power to other states. • To feed the surplus power, PGCIL, has erected a 800 KV capacity and 1728 km long HVDC transmission line from Biwanath Chariyalli in Guwahati to Agra at investment of USD 1.8 billion.

SASEC Vision – Powering Asia in the 21st Century

Mission Generate synergies through sub-regional cooperation to unleash latent potential

Three Principal Layers Significant Partnership Strategies

Powering Asia through: 1. Cross-border power trade I. Resource - Industry: tapping the between countries of subregion subregion’s resources and feeding latent demand 2. Pipeline corridor between II. Industry - Industry: develop and Bangladesh and India for crude strengthen regional value chains oil import and product supply and enhance the region’s competitiveness 3. LPG trans-shipment and storage III. Industry-Infrastructure: developing hub in Sri Lanka SASEC trade gateways and hubs, to readily access regional/ global markets

29 The Greater Mekong Sub region

1992

• Roads • Telecommunications

• Power Transmission Line The Greater Mekong Sub region

2010

• Roads • Telecommunications

• Power Transmission Line The Greater Mekong Sub region

2015-2020

• Roads • Telecommunications

• Power Transmission Line Economic Corridors in India Deepen regional economic corridors, build on Myanmar’s opening

TAPI For more information: www.adb.org www.sasec.asia

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