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Background Note BACKGROUND PAPER Zone 4B India Habitat Centre, Lodi Road, New Delhi-110003 Tel : +91-11-2468 2177-80 ; Fax : +2468 2175/73 Email : [email protected]; [email protected] Website: http://www.ris.org.in 1 2 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 3 [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.] 4 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 5 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 6 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 7 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 8 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 9 (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. 10 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
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