World Bank Document

DOCUMENT OF INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION Public Disclosure Authorized Not For Public Use Report No. SA-35a RECONSTRUCTING THE ECONOMY Public Disclosure Authorized OF BANGLADESH VOLUME II _SK L NOTES ON THE REVIVAL OF ECONOMIC ACTIVITY IN THE MAJOR SECTORS Public Disclosure Authorized PART I : TRANSPORT PART II : INDUSTRY PART III : FOODGRAINS Public Disclosure Authorized November 20, 1972 SOUTH ASIA DEPARTMENT This report was prepared for official use only by the Bank Group. It may not be published, quoted or cited without Bank Group authorization. The Bank Group does not accept responsibility for the accuracy or completeness of the report. PART,I TRANSPORT Page No. SUMMARY AND CONCLUSIONS I. INTRODUCTION 1 A. General 1 B. War Damages 2 C. Government Organization 2 D. Sector Policy 3 E. Finances of Public Sector Transport 4 F. Transport Survey 4 II. RAILWAYS 6 A. Physical Features 6 B. Trends 6 C. Consequences of War 8 D. Current Budget 9 E. Prospects 9 III. HIGHWAY TRANSPORT AND HIGHWAYS 11 A. Vehicle Fleet 11 B. Operations of Road Transport Industry 12 C. Road Ferries 13 D. Main Road Network 13 E. Highway Budget and Planning 14 IV. INLAND WATERWAYS 16 A. General. 16 B. Country Boats 16 C. Trends in Mechanized Inland Shipping 16 D. Changes Since Independence 17 E. Future Prospects 18 V. OCEAN PORTS AND SHIPPING 21 A. Pre-War Trends 21 B. War Damage and Current Plans 21 C. Prospects 23 D. Ocean Shipping 23 VI. AVIATION 25 ANNEX I This report was prepared by Tillman Neuner (Transport Economist). Mr. Neuner was in the field during the month of June 1972. SUMMARY AND CONCLUSIONS i. The geography of Bangladesh has given rise to a varied and complex transport system. Numerous watercourses traditionally provided the main avenues of commerce; they also are the principal obstacles to the development of other means of surface transportation. The movement of persons and goods very often involves interchanges between two or more modes and the selection of the best means of transport entails an intri- cate choice among several alternative routings and a close comparison between their respective costs. ii. In the decade before the establishment of Bangladesh, some important shifts had occurred in the country's transport sector. The railways experienced relatively little traffic growth and appeared to be losing ground to the other modes which were expanding. Road transport, in particular, became well established even though the total vehicle fleet, which increased more than three-fold to nearly 70,000 units in less than ten years, remained small in relation to the country's population. Despite the high cost of building roads, due to lack of good building material and the requirement for embankments high enough to avoid floods, paved roads more than doubled in the past decade. iii. Transport facilities were severely disrupted during the disturbances of last year. It is estimated that the loss in physical assets approached US $200 million equivalent; most seriously affected were the bridges on the rail and road systems and the fleets of inland and ocean vessels, road motor vehicles and commercial airliners. Service was inter- rupted on all modes; the most seriously affected were the railways where the main north-south lines were cut by the destruction of crossings over the Padma and Meghna Rivers and the main east-west crossing was cut by the sinking of most ferries at Bahadurabad. iv. By June of this year considerable progress had been made in restoring transport operations. Most of the severed links had been restored, at least on a temporary basis, and Chittagong, the most important port, was handling traffic at volumes approaching pre-independence levels. The United Nations relief effort had made up some of the loss in motor vehicles and had brought in a large fleet of chartered vessels to help in the distribution of imports, particularly food. A new domestic airline had been established and had begun to provide service to most major population centers. However, further work needs to be done especially in the restoration to full service of two main line rail bridges, in permanent rebuilding of other rail and road bridges,in further salvage work at the major ports and in the inland waterways, and in further replacements of losses to the motor vehicle and inland watercraft fleets. - ii - v. The Government's main objective in regard to transport now is to restore the status quo ante bellum as quickly as possible and nearly one-half of its 1972/73 reconstruction budget is for the transport sector. In addition, nearly 10% of the current development budget is devoted to transport and reflects the Government's intention of resuming the development process as promptly as possible. The development budget consists almost entirely of schemes which had been started during the previous administration. vi. As a result of the change in regime the country now enjoys friendly relations with India. This will have important effects on the transport system, not only through the development of new trade channels but because of cross trade which India wishes to establish between various parts of its territory. These possibilities of change suggest a cautious approach'in committing major investments to the transport sector until new patterns of trade have been studied. vii. Deficiencies in data on transport impeded the formulation of a rational transport plan under the previous regime. A transport survey with U.K. assistance which had begun shortly before the outbreak of hostilities is now being resumed. It will take about 18 months and is expected to provide a well documented basis for management of the transport sector. viii. This brief review of the transport system indicates that Government policy in the near term should emphasize the following points: (a) Completion of the transport survey as quickly as possible, with particular stress on development of a complete data base. (b) Postponement to the extent possible of major investment expenditures in transport and continuation of present interim arrangements for a while longer until the'basic results of the survey are available, likely new patterns of trade and traffic have been analyzed, and investment alternatives are properly evaluated. (c) Review of the reconstruction and development programs in transport in the light of new opportunities created by the independence of Bangladesh, especially the opening of trade with Indis. (d) Based on the results of the survey and on the likely new patterns of trade, development of a long-range strategy for the transport sector with particular emphasis on analysis of intermodal movements and technologies. (e) Strengthening of management and planning functions in the various agencies concerned with transport. I. INTRODUCTICN A. General 1. Bangladesh is divided in the middle along a generally north- south line by the Brahmaputra/Jamuna River, and the two halves are further split in two by the main tributary river systems of the Brahma- putra, the Ganges and the Meghna. In addition, there are many smaller rivers, canals and other watercourses. The monsoon floods necessitate that railways and roads are put on high embankments, which is particularly costly due to the general lack of good building materials. Floods also cause a continuous shifting of channels; thus bridges and ferries frequently have to be moved and navigable waterways need to be cleared or relocated. 2. While no estimate is available on the total movement of people and goods in Bangladesh, in terms of passenger and ton miles, it is generally assumed that most traffic moves by water, primarily in over 300,000 privately owned non-motorized vessels. Over short distances bullock carts also are important carriers. Traffic carried by motor vehicles, mechanized vessels and the railway was concentrated before the establishment of Bangladesh along two north-south corridors based on the ports of Chalna and Chittagong,,respectively,and consisted primarily of foreign trade items (mostly exports of jute and imports of fuel, foodgrains, some raw materials and industrial products). Motorized traffic in the east-west direction across the Brahmaputra was much less important. The railway moved traffic across the river at two points; the main one was the Bahadurabad Ferry at the far northern end of the country. The only road crossing over the Brahmaputra (also by ferry) was more centrally located at Aricha, a point due west of Dacca. Some east-west movements were also made by boat. While the flows of motorized traffic will be modified with the establishment of trade with India, the basic pre-war patterns are expected to persist for some time into the future. 3. The basic characteristics of the transport system prior to the establishment of Bangladesh are displayed in Table 1. Except for numerous waterways, many of the facilities, particularly the railways, date from colonial Indian times when East Bengal focussed its own trade on Calcutta and was also a transit corridor to Assam. Consequently, the orientation of many transport lines does not conform to the requirements of an econo- mically independent entity. Other main features of the transport system are reviewed in the discussion of the individual modes. -2- B. War Damages 4. The recent disturbances caused major losses in the transport sector; the report of the mission of high-level United Nations consultants under Ambassador Sailer in March-April of this year estimated damage at US $81 million equivalent, not including motor vehicles, country boats and 23 ocean- going vessels. The cost of replacing damaged or lost trucks and busses was estimated at about US $50 million equivalent; no valuation was made of the loss under the other two categories. Many bridges on the railways and roads were blown up, including the two main bridges linking the northern and south- ern sections of the rail ne-tworks on the east and west sides of the country.

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