Dr. M. Rahmatullah, senior visiting fellow of the Centre for
Policy Dialogue (CPD), is a transport expert and is involved in the
issues relating to transit that Bangladesh wants to give to India, Nepal
and Bhutan. Recently, he talked with Inam Ahmed, Deputy Editor of The
Daily Star, on various aspects of transit.

The Daily Star (DS): How do you think transit facility to India, Nepal and Bhutan can benefit Bangladesh?

M. Rahmatullah (MR):
Bangladesh can take advantage of trade in transport services by
providing its port facility to the landlocked countries. Other than
Nepal and Bhutan, the northeast region of India is virtually landlocked
and they want to use our Chittagong port. Kolkatta port is getting
silted up and also too congested to deal with the Indian demand. So
India is also interested in using Mongla port. Transit is an economic
issue, there are plenty of examples where countries have let their ports
be used as transit facilities and earned revenue. Singapore has been
giving this facility for many years. Iran has let its Bandar Abbas port
be used by the CIS countries, which previously used Soviet ports. In
Europe, Rotterdam is open to the rest of Europe, specially the
landlocked countries. So from this angle, Chittagong and Mongla ports
can be used as a big source of income.

DS: Is there any assessment of how much goods can be transported using transit facility?

MR:
CPD and South Asia Centre for Policy Studies, I understand, had done a
study in 2010 of what traffic is being channeled to Kolkata port through
the chicken neck that separates the northeast region of India. We have
found that 18 million tons of goods pass through this chicken neck, of
which 16 million tons are for domestic consumption and 2 million for
export/import. The difficulty of making any realistic projection of
transportation of goods is that northeast is viable to produce goods
from raw materials because of market access difficulty. For example, the
distance from northeast India to Kolkata is 1,400 to 1,600 km. But if
the region can use transit through Bangladesh, the distance would come
down to 500 to 700 km.

DS: What are the possible routes?

MR:
Three points can be used for transit. One is the Akhaura-Agartala
route. The second is the Sutarkandi-Seola of Karimganj on the Indian
part. And third is Tamabil-Dawki. From these three points, nine routes
can be used. In addition, Nepal and Bhutan can use three more routes.

MS: What is the progress so far on transit?

MR:
There has not been much progress on the transit issue. The government
had set up a high level committee chaired by the Tariff Commission
chairman to deal with transit issues. It had five subcommittees headed
by professionals and experts. They submitted a report to the government
last July. The Prime Minister's Office sent a comment on the report at
the end of last year. Based on the comments, the report was modified and
resubmitted in January this year. After that there has been a sudden
lull.

We have suggested that there should not be any half-hearted
effort for transit. We have a water transit protocol since 1972, which
only covers inland water transit. The government is trying to modify
this protocol to provide full transit to India. As part of this, it was
amended in 2009 to declare Ashuganj as a port of call and transshipment
port for onward movement of Indian goods to Agartala by road. This is
how we have incorporated road transit in water transit. This
transshipment port has no infrastructure. But it was supposed to be
developed with Indian credit. We do not know where it is stuck.

DS: But have we not already allowed goods to be sent to Tripura under transit facility?

MR:
According to the joint communiqué signed during Prime Minister Sheikh
Hasina's visit to Delhi, Bangladesh was supposed to provide a one-shot
transit to India to transfer equipment for its Palatana power plant. We
gave this facility to India. But then using the same commitment we had
let them set up a temporary transfer facility and transfer billets for
steel mills in Tripura, and for other goods as well. This was not
supposed to happen. So why did we allow India to do it? They used our
roads to take goods to India, for which we deserve to receive fees. But
we did not charge any fee from the Indians. We did not even take any
bank guarantee from Indian traders so that once fees were fixed we could
charge it on them for the billets and other goods that were
transported. So there were no fees, no infrastructure and no roads
developed. And yet we have allowed transit. This was an irregular step
taken by the government.

DS: But why were no fees charged?

MS:
We mentioned an indicative fee in our report and said we have to sit
with India to arrive at a specific fee. We have to have a framework
agreement under which a number of protocols have to be signed to fix
fees, routes and so on. The government has been trying to avoid this
framework agreement in giving transit to India.

DS: What kind of fees can we charge?

MR:
What kind of charges we can levy is all laid down under the WTO and
GATT. We can ask for infrastructure cost recovery, operational cost,
environment cost, congestion cost and overhead cost. We have calculated
these in our report.

DS: What are the international rules regarding transit?

MR:
The transit we are talking about with India does not fall under any
international definition. In transit three countries are involved. One
country ships its goods to another country through a third country. But
here only two countries -- India and Bangladesh -- are involved. Also
important is that transit cannot automatically be given to India as per
international law because India is not a landlocked country. We are
doing it as a friendly gesture to India. If a country is landlocked,
then it is the other country's obligation to provide transit facility.
This is why we can ask for reciprocation of our friendly gesture.

DS: What is the logic behind asking for fees?

MR:
India can save $4-$50 a ton of goods that it would send through
transit. This means it can save 12-80% of costs depending on routes. So
it is logical that Indian traders should share a portion of its savings
with Bangladesh. My understanding is that Indian diplomats, economists,
intellectuals, administrators and even businessmen are ready to share
the saving. But some of our policymakers are hesitant to go along this
line of sharing cost saving. They feel that we will get enough in other
ways from India. So we need not press for charges. But it is foolish to
forego our genuine claims and look for favours.

DS: Is our infrastructure ready for transit?

MR:
We are still not ready for transit. Our first preference would be
transit by railway. We have identified what needs to be done for rail
connectivity with northeast India. There is one route through
Kulaura-Shahbazpur of Bangladsh to Mohishashan-Karimganj of India. India
has rail line on its part but we do not have 39 km rail link in
operation. Re-commissioning of this route would take 2-3 years but no
work on this has started yet. We need to construct a 10 km line from
Akhaura to Agartala under Indian grants. No work has started for this
yet. Jamuna Bridge will be another vital component. The bridge has its
own load limitations and only a limited number of trains can pass
through it. Its capacity has to be enhanced, for which we need a
dedicated rail bridge. The Dhaka-Chittagong railway capacity has to be
enhanced but the work for doubling the track is slow. We need to have
two more bridges -- one on the Meghna River and the other on Titas --
under Indian credit. Progress is again very slow here. Tongi and
Joydevpur points of the railway would be used for taking goods from
northeast India to Indian mainland. This route is now single tracked,
which needs to be enhanced. We need to build a direct line from Laksham
to Dhaka to reduce distance between Dhaka and Chittagong. Rail track
capacity between Dhaka and Narayanganj has to be increased too. So
nothing is ready now.

DS: Are we not supposed to build infrastructure with Indian credit?

MR:
On waterways, the only route is to transship to Agartala from Ashuganj.
We need to build the Ashuganj transshipment port. The road to Akhaura
has to be developed too. India wants us to build it. Our stance is India
should relax its conditions for use of its credit so that the fund
could be used to build the road. India had attached a condition that 85%
of raw materials for the infrastructure projects has to be procured
from India. But we produce all the materials for road construction.
After negotiation, India has reduced this requirement to 75%. But it is
still high. This is why we cannot use Indian credit for road and rail
infrastructure construction.

DS: Tell us something about road transit.

MR:
The roads have only two lanes. They are also too weak to allow heavy
Indian trucks. So our own trucks have to be used for transshipment. We
need to float a joint company with ownership of India, Bangladesh, Nepal
and Bhutan, which would have double registration so that these trucks
can enter each others' territories to pick up and drop goods. We also
have to build highway expressways so that trucks with goods can run
swiftly. Ultimately we also have to build an expressway.

DS: Thank you so much for your time.

MR: Thank you too.