BACKGROUND PAPER
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Contents
1. Cross-border Connectivity Projects in Myanmar...... 5
2. Upcoming Connectivity Projects in Myanmar...... 9
2.1. Kyaukphyu SEZ…………………………………………………………………….. 9
2.2 Dawei SEZ……………………………………………………………………….…… 11
2.3 Thilawa SEZ…………………………………………………………….…………… 13
2.4 Sittwe Industrial Park…………………………………………………………… 14
3. Strengthening Backend Linkages...... 15
4. Towards Economic Corridor………………………………………………..…………….. 15
Annexure……………………………………………………………………………………………… 16
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[Version 1.0 12 May 2014. This background paper has been prepared by Dr. Prabir De with research assistance of Mr. Sunando Basu, RIS. Paper has been written to facilitate a discussion on cross-border connectivity projects. Views are personal. Usual disclaimers apply.]
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1. Cross-border Connectivity Projects in Myanmar 1.1 India has been implementing several connectivity projects in Southeast Asia to strengthen the ASEAN-India Strategic Partnership. ASEAN-India physical connectivity in the present form comprises two important projects: (i) India-Myanmar-Thailand Trilateral Highway, and (ii) Kaladan Multimodal Transit Transport Project. On the Trilateral Highway, the Tamu and Kalewa friendship road is being constructed with India’s assistance (Map 1). About 132 km has been completed and handed over to Myanmar. Work on other 28 km is under progress. India has also undertaken the task of repair/upgradation of 71 bridges on the Tamu-Kalewa friendship Road, and upgradation of the 120 km Kalewa- Yargyi road segment to highway standard, while Myanmar has agreed to undertake upgradation of the Yargyi-Monywa stretch to highway standard by 2016. This project would help in establishing trilateral connectivity from Moreh in India to Mae Sot in Thailand via Myanmar. Separately, the Government of India had taken initiatives to prepare DPR for construction of Chaungma-Yinmabin section (30 km); and upgradation from single lane to double lane of Yinmabin-Pale-Lingadaw section (50 km). India has also announced extension of the Trilateral Highway to Cambodia, Lao PDR and Vietnam.
Map 1: Trilateral Highway
Source: MEA
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Map 2: Kaladan Multimodal Transit Transport Project
Source: IWAI
1.2 One of the objectives of Kaladan Multimodal Transit Transport Project is to provide an attractive access to Bay of Bengal to landlocked Northeastern part of India. The Ministry of External Affairs (MEA), Government of India entered into a Framework Agreement with the Government of Myanmar in April 2008 to facilitate implementation of the project. As shown in Map 2, the components of this project include (i) construction of an integrated Port and Inland Water Transport (IWT) terminal at Sittwe including dredging; (ii) development of navigational channel along river Kaladan from Sittwe to Paletwa (158 km); (iii) construction of an IWT - Highway transshipment terminal at Paletwa; and (iv) construction of six IWT barges (each 300 tonne capacity) for transportation of cargo between Sittwe and Paletwa. Framework Agreement and two protocols (Protocol on Transit Transport and Protocol on maintenance) were signed by India and Myanmar on 2nd April 2008. Construction of integrated Port cum IWT jetty at Sittwe is substantially completed. Construction work of IWT terminal at Paletwa has been started in April 2013. The Border to NH 54 (Lawngtlai) Road
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on Indian side in Mizoram is in progress under the Ministry of Road Transport and Highways, Government of India.
1.3 The another important cross-border connectivity project is the Mekong- India Economic Corridor (MIEC). MIEC involves integrating the four Mekong countries, namely, Myanmar, Thailand, Cambodia and Vietnam with India (Map 3). It connects Ho Chi Minh City (Vietnam) with Dawei (Myanmar) via Bangkok (Thailand) and Phnom Penh (Cambodia) and Chennai in India. The major investment will be required for the development of a port at Dawei and SEZ. This corridor, when completed, is expected to augment trade with India by reducing travel distance between India and MIEC countries and removing supply side bottlenecks. The emphasis of the corridor is on expanding the manufacturing base and trade with the rest of the world, particularly with India. The corridor will enable economies of ASEAN and India to integrate further and collectively emerge as a globally competitive economic bloc.
Map 3: Mekong India Economic Corridor
Source: ERIA
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1.4 Railways do bulk trans-national movement of goods and services among the neighbouring countries. Needs are four-fold—(1) to link India’s Manipur with India’s main railway corridor, (2) to link Imphal with Kalay in Myanmar (about 212 km), (3) to link Thanbyuzayat with Three Pagoda Pass in Thailand (110 km), and (4) to re-establish and renovate railway networks in Myanmar. Harmonisation of railway tracks in the region is essential. Without having a compatible and strong railway system inside Myanmar, closer communication would be difficult. RITES completed a preliminary study to establish Delhi–Hanoi railway link in 2006 (Map 4). Although Railways are in service in major parts of these routes, about 238 km are missing links, which have to be built in Myanmar in order to have Delhi-Hanoi railways in operation. Renovation of railway network systems in southern (Yangon to Dawei) and northern (Mandalay to Kalay) Myanmar is essential.
Map 4: Delhi – Hanoi Railway Link
Source: RITES
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2. Upcoming Connectivity Projects in Myanmar Myanmar is setting-up several ports and SEZs. Map 5 illustrates some of the projects which are having strong implications on connectivity in the region. The most important one is deep-water port at Kyaukpyu in the Rakhine state.
Map 5: SEZ and Port Locations in Myanmar
Source: RIS
2.1 Kyaukphyu SEZ Kyaukphyu SEZ is located in the Kyaukphyu township of Rakhine State of Myanmar. Kyaukphyu district is composed of four townships: Kyaukphyu (678.73 square mile), Yanbe (506.73 square mile), Man Aung (202.05 square mile) and Ann townships (2316.88 square mile) with a total land area of 3704.03 square mile and population of 41,025
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(2011 estimate). Kyaukphyu SEZ is specially designated for petro- chemical complex. The SEZ serves as the terminal of Yunnan-Arakan Railway. It is strategically located at the centre of the triangle formed by India, China and ASEAN. Thus, it would serve as a potential trade corridor connecting three dynamic economies. Currently, it is functioning as the energy corridor between China and Myanmar.
Kyaukphyu SEZ has the deepest sea port in Myanmar (up to 30 meters). Largest cargo containers can load and unload in the port. The SEZ is aimed at becoming an important gateway for Myanmar, China, India and Bay of Bengal region. It is well connected by rail and road to the west of Myanmar and China. The airport is presently being expanded to international standards for strengthening air connectivity in the region.
Key components of the SEZ include development of deep sea port, road, bridge, railway, water and power supply, housing, telecommunication, waste management and environmental protection. It is likely to emerge as the energy corridor (oil and gas stations and pipelines), commodity corridor (for cargo transport), multi-modal logistic hub, international air transport hub, regional business hub, international financial hub, regional tourist hub, international medical and educational hub, international energy storage and production hub, international manufacturing hub, regional aquaculture hub, agro-forest industry, light and heavy industry and shipyard.
An oil and gas terminal, built by Shwe Natural Gas Production Enterprise, is in operation on Madae Island in Kyaukphyu district. An MoU to build a gas pipeline to China was signed between Myanmar Ministry of Energy and China National Petroleum Cooperation in 2009, which has been already functioning since July 2013. The pipeline transports natural gas from Rakhine coast to China’s Yunnan province. It has carrying capacity of 500 million cubic feet of natural gas per day. The oil pipeline is under construction and is likely to be operational by early 2015.
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The Kyaukpyu project would improve Myanmar’s infrastructure and strengthen its international connectivity. A public company has been established for developing the SEZ project with a projected cost of around US$ 277 million. Singapore’s CPG Corporation has won the contract for the development of Kyaukphyu SEZ project, which includes a deep-sea port, an industrial zone and residential developments. The consortium led by CPG Corporation—formerly the Singaporean government’s Public Works Department—also includes real estate firm DTZ, Global Maritime and Port Services, global accountants EY (Ernst & Young) and project management company PM Link.
2.2 Dawei SEZ Dawei SEZ is located in Charkae village of Dawei district of Taninthayi division in the Mon State of Myanmar. It is situated about 614.3 km south of Yangon on the northern bank of Dawei river (Map 6). Proposed infrastructures in Dawei SEZ include development of a deep sea port, an industrial estate divided into six industrial zones, residential and commercial zone and oil and gas pipeline. The Project aims to become a major logistic hub in Southeast Asia. It involves development of the port along with cross-border road link from Dawei to Thailand, a rail link from Dawei-Yangon-Mandalay-Muse. The industrial estate and related supporting facilities will serve as a regional manufacturing and trading hub. The project will serve as an alternative sea route to India, China, Middle-East, Europe, and Africa. This will lessen dependence on the congested straits of Malacca, thereby reducing transportation time and costs. Its strategic location will provide direct access to Andaman Sea and Indian Ocean for cargo transportation. The industrial estate will strengthen economic cooperation, trade and development among Greater Mekong Sub-region (GMS) countries. Industrial parks aim to promote sustainable SEZ development involving local communities and business. They work to protect natural habitats and implement the international standards for health and safety.
11 Map 6: Location of Dawei Port and SEZ
Source: Myanmar Government
Myanmar government has decided to develop the Dawei port and SEZ in joint venture. The SEZ and its related project area has six major development goals including infrastructure and construction, industry and business development, power, community development and relocation, rules and regulations and finance. Dawei port can accommodate up to 300,000 DWT vessels with design capacity for 250 million tonnes cargo throughput. It is equipped with terminals for handling containerised cargo, break bulk, dry bulk, liquid bulk and LNG. It has modern port and vessel management systems to ensure safety, security and efficiency. Integrated logistics hub with intermodal freight transport system is also available at the port.
There is a shortcut link connecting Thailand road networks to Dawei (approx. 132 km). A 4-lane Highway (8 lane in the future) has been
12 developed in lines of ASEAN Highway standard. The project has a large raw water reservoir with 400 million cubic metre, raw water storage capacity to ensure the all-year round supply of fresh water. A centralized water treatment plant operates with maximum capacity of 1.05 million cubic metre per day.
Map 7: Location of Thilawa SEZ
Source: Thilawa SEZ
2.3 Thilawa SEZ Thilawa SEZ is being developed through Joint Venture (Japan- Myanmar), where the first phase of the project is expected to be operational by 2015. Map 7 presents the location of the SEZ. This SEZ is supported by an international port terminal called Myanmar International Terminals Thilawa (MITT), which is located 25 km from Yangon. The facility is also adjacent to the proposed SEZ, which is also known as Thanlyin-Kyauktan SEZ. This multi-purpose container
13 terminal located at Thilawa, near the mouth of the Yangon river. The terminal offers a comprehensive range of safe, efficient and productive services to the shipping industry 24 hours a day, 7 days a week. MITT has five berths capable of handling a wide variety of cargo. Large vessels with deep drafts can dock here because of the close proximity to the mouth of the Yangon river. Arrival and departure of the containers to MITT is efficiently managed by a rail terminal inside the facility. Near to port, the Thanlyin-Kyauktan Industrial Zone (with an area of 1,230 hectares) was developed by the Thanlyin-Kyautan Development Co. in 1996. Potential industries in SEZ include light industries (labour intensive but non-traditional sector), logistics and transportation sectors, financial, insurance and medical service sectors, new township and commercial sectors, incubation and vocational training.
2.4 Sittwe Industrial Park Sittwe Industrial Park is located near to Sittwe Port, which is being developed by India. Sittwe is the capital of Rakhine State in Myanmar. Situated at the mouth of Kaladan river, the port is being developed by India as a part of the Kaladan Multimodal Transit Transport Project. Myanmar government has identified 1833 acres of land near to Sittew town for setting-up this industrial park. The land presently belongs to farmers who are willing to sell for development of the industrial park. Presently, the region cultivates paddy as the main crop. Bamboo is also available from a nearby location of about 10 miles away. Kaladan river provides easy maritime connectivity with the region. Agro and fisheries are likely to have a good development potential in the region. This industrial park may accommodate industrial projects cater to the local and larger Indian market.
3. Strengthening Backend Linkages Backend integration with regional connectivity projects is essential in order to reap the benefits of growing economic linkages between India and Southeast and East Asia. Annexure 1 presents a list of cross-border
14 connectivity projects and current status of backend linkages. At present, the backward links in railways are poor. Projects for rail connectivity to state capitals of Sikkim, Meghalaya, Mizoram, Manipur and Nagaland have been sanctioned by Indian Railways. On 4th January 2014, the first Broad Gauge (BG) train from Guwahati to Tezpur via Rangiya started. Following projects shall be completed: (i) railway lines between Harmuti-Itanagar and Dudhnai-Mendipathar, which will provide rail connectivity to all North Eastern States except Sikkim; and (ii) railway line from Jiribum to Imphal to Moreh.
4. Towards Economic Corridor Stronger connectivity across NER will build a stronger network of cross- border production chains, particularly with Southeast Asia and Bangladesh. Inadequate backward links in rail, water and road will continue to hamper the economic integration. The present institutional linkages are improving no doubt but it has to be strengthened further to support the connectivity projects between India and Southeast Asia. Connectivity is the enabler. However, its success will depend how quickly it brings peace and prosperity, particularly to the Northeastern states. Once connectivity projects start attracting investment, engages into the development of the region and improves the quality of life of the local people through generation of employment and reduction of poverty, it becomes a truly public good and then turns to be an economic corridor.
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Annexure 1
Cross Border Projects Railway Highway Waterway ICP India - India extended a US$ 1 billion credit Government of Bangladesh line for developing infrastructure India pays Taka projects in Bangladesh. Some of the 10 crores per railway projects sanctioned under annum to the this line of credit are: Bangladesh o Construction of Khulna-Mongla Government to Port Rail Line, including maintain the feasibility study; navigability of the o 3rd and 4th dual gauge rail track IWT protocol between Dhaka-Tongi and routes. doubling of dual gauge tracks There is a between Tongi-Joydevpur; proposal to o Replacement and modernization develop Ashuganj of signalling system of three in Bangladesh as stations between Ashuganj and an inland Akhaura section of Bangladesh transshipment Railway; and port which will o Rehabilitation of the Kulaura- connect India’s Shahbajpur section of Northeast with Bangladesh Railway. Kolkata. WAPCOS Government of India has approved has been the extension of railway line from appointed by MEA Agartala (India) to Akhaura for DPR on (Bangladesh). construction of river terminal at Ashuganj. India – RITES completed a feasibility study Bhutan in 2005 for setting-up railway line between the two countries.
16 According to RITES, the possible routes are Hasimara–Phuentsholing with a branch to Pasaka (18 km); Kokrajhar–Gelephu (70 km); Pathsala–Naglam (40 km); Rangla– Darranga–Samdrupjongkar (60 km); and Banarhat–Samtse. However, not much progress has been witnessed till date. India - Construction of railway line from Two major projects: India is building Myanmar Jiribum to Imphal (Ongoing) o India-Myanmar-Thailand Sittwe Port under Feasibility study for setting-up of Trilateral Highway, and the Kaladan Multi- railway line between Imphal to o Kaladan Multimodal modal Transit Moreh has been completed. Transit Transport Project. Transport Project India has given line of credit to On the Trilateral Highway, the through a BOT Myanmar for development of rail Tamu and Kalewa friendship operator. transport system and supply of road is being constructed. About IWT jetties at coaches and locomotives. 132 km has been completed and Paletwa EXIM Bank of India has recently handed over to Myanmar. Work (Myanmar) on sanctioned new line of credit for on other 28 km is under River Kaladan rehabilitation of railway system in progress. under Myanmar. India has also undertaken the construction. task of repair/ upgradation of 71 bridges on the Tamu-Kalewa friendship road, and upgradation of the 120 km Kalewa-Yargyi road segment to highway standard. Government of India had taken initiatives to prepare DPR for construction of Chaungma- Yinmabin section (30 km); and upgradation from single lane to double lane of Yinmabin-Pale- Lingadaw section (50 km).
17 India has also announced extension of the Trilateral Highway to Cambodia, Lao PDR and Vietnam. In Mizoram state: India has been building link road on NH 54 from Lawngtlai till Mizoram- Myanmar border being part of Kaladan project under SARDP- NE. Under the Kaladan project, India is building linking road from Paletwa (Myanmar) to Myeikwa (Myanmar-India border) to Lawngtlai (Mizoram, India) In Manipur state: India has been strengthening NH 39 from Imphal to Moreh.
Backend Linkages Railway Highway Waterway ICP India - Railway infrastructure at India- Strengthening of highways Setting-up / ICP at Agartala is Bangladesh Bangladesh border posts has to connecting India-Bangladesh expansion of completed be upgraded in terms of border in Northeast India, IWT jetties in already. ICP at doubling of railway lines, particularly Assam, Mizoram Assam under Petrapole is electrification, warehouses, and Meghalaya, is needed. various stages of almost ready. ICP customs and security, etc., Mizoram government is implementation. in Dawki is yet to particularly at Tripura and implementing state road Cargo handling be ready. West Bengal. development projects including capacity at IWT Need to undertake border road with support of jetties has to be another phase of World Bank. upgraded. ICP projects in Northeast India and West Bengal such as Hilli, Changrabandha,
18 Karimganj, etc. India – Railway infrastructure has to NH 31 and 31C (East – West Border Bhutan be upgraded at Hashimara (N F Corridor) already completed. infrastructure at Railway) The road, Phuentsholing Jaigaon in West (Bhutan)-Jaigaon (India)- Bengal has to be Hasimara (India)- upgraded. Changrabandha (India)- Burimari (Bangladesh) (115 km), has to be upgraded into international standard. India - Projects for rail connectivity to All Highways (54, 39 in Government of Implementation of Myanmar state capitals of Sikkim, particular) leading to border of India has ICP at Moreh is Meghalaya, Mizoram, Manipur Bangladesh, Myanmar have to sanctioned moving slowly. and Nagaland have been be upgraded to international development of a Border sanctioned by Indian Railways standard. new port at infrastructure at and various stages of Under SARDP-NE, highway Sagar (West Champai has to be development. Following projects are various stages of Bengal) recently. upgraded. projects should be completed implementation. Following India – Myanmar CHAs in urgently: projects have to completed IWT links and Northeast, o Railway lines between urgently: coastal shipping particularly in Harmuti-Itanagar and o Highway from Aizal to may be explored. Manipur and Dudhnai-Mendipathar, Lawngtlai till Mizoram- Mizoram, have to which will provide rail Myanmar border be trained on EDI connectivity to all North o Highway from Imphal to system. Eastern States except Moreh. Sikkim; o Railway line from Jiribum to Imphal. Source: RIS, compiled from various secondary sources
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