Tuesday, April 12, 2011

Rust In The Corridor Route

Though talking about regional or sub-regional connectivity in public, the ruling elite in Bangladesh has in effect granted and operationalized a transport corridor with India through the country without any fee.So far no official announcement has been made to that effect. Haste and secrecy over such an issue propagated over the years for its economic dividends, not to undermine ‘significant implications’, evokes questions concerning the deal. Questions have arisen on whether legitimate grounds of convergence of genuine interests between the two peoples and their states motivated the Bangladesh authorities for the transport corridor, or whether there has been any degree of coercion. Secrecy over the contents of the MOU that allowed transport corridor is maintained not only in Bangladesh but it seems to be equally applicable in India. Both the countries have introduced the right to information acts, both have their respective parliaments. There has been no report of any recent debate over the issue in either parliament nor has there been an attempt in any country to inform their people about the content of the MOU invoking the right to information act. An understanding of the developments and dynamics of bilateral relationships between Bhutan-India, Nepal-India on one side and Nepal-Bhutan on the other side at this particular stage is essential for an assessment of the scenario into which Bangladesh is being dragged. This will also unfold the agenda behind the proposed regional connectivity and bring into light the immediate implications of the transport corridor between Bangladesh and India. An in-depth analysis of bilateral relationships of India and its two landlocked neighbours and the relationship between the two adjacent landlocked countries in the region will also help understanding why the Indian ruling elites were in such a haste to operationalise the transport corridor through Bangladesh. The elite attitude in Bangladesh with regards to the issues mentioned above is no less important. Positions taken by those at the centre of power, commanding the state machinery and those outside it but waiting for an opportune moment to take over the reins, will reflect whether there is any consensus among the elites irrespective of political divide in the country on the transport corridor issue. The free transport corridor between Bangladesh and India became effective on March 29 as four trailers of equipment crossed the borders between the two countries traveling 48 km land route from Ashuganj river port in Bangladesh and reached Agartala in the north eastern region of India. The modality under which the corridor has been made operational has not yet been made public. Whether Customs at Ashuganj river port or Akhaura border post are equipped with necessary logistic support to scan the huge loads of hardware being received and sent, also seems to have been kept confidential. Soon after the signing of the November 30 , 2010 MOU on transport corridor between Bangladesh and India, 16 diversion roads were built to facilitate heavy-duty trailers carrying equipment for Palatana Power Station in Tripura. These diversions were constructed to avoid 15 risky bridges and culverts between Ashuganj river port and Akhaura reports say (The Daily Star March 31 , 2011). At a speed of five km per hour, each trailer carried a load of around 80 tons. The traveling time to cross the 48 km stretch of road in Bangladesh corridor will require about 10 hours. The first consignment, took more time for its passage through the corridor due to a mechanical failure at a pontoon bridge after the first trailer embarked. As the trailers remained stuck on the pontoon bridge over Anderson Canal and along the diversion road near Brahmanbaria, the city witnessed traffic congestion while movement of vehicles along Sylhet-Comilla highway remained restricted for sometime during the period. Since March 9 , ships carrying 16 consignments ranging between 20 tons and 285 tons reached the Ashuganj port from Kolkata. A total 96 consignments of hardware for the power station will be sent from Kolkata to Tripura using the river ways and the road corridor through Bangladesh. An MOU allowing a multimodal but single purpose ‘transport corridor’ through Bangladesh was signed in Dhaka on November 30 2010 , for a period up to June 2012. Shipping Minister Shahjahan Khan, Secretary of the Ministry Abdul Mannan Howlader, Secretary RHD, Mozammel Haque Khan along with some senior government officials of Bangladesh besides Sushil Singhal, First Secretary, High Commission of India in Dhaka, AK Hazarika, Director (Onshore), ONGC and SK Dube, MD, OTPC were also present during the MOU signing ceremony. The foreign ministry remained totally sidelined and was not even represented at the MOU signing ceremony. Quoting foreign ministry officials, reports published in Dhaka (The Independent December 31 , 2010) claimed that the ministry was ‘not even consulted’ regarding the MOU on the transport corridor. The MOU, according to them, was ‘faulty’ and needed to be ‘modified in future’. Important cabinet ministers in Bangladesh continue to defy the term ‘transport corridor’ with regards to land route facility provided to India through Ashuganj-Akhaura road link. The ONGC, however, clarified the ambiguity over the issue mentioning the stretch of road in Bangladesh as ‘transport corridor’. On December 15 , 2010 , two weeks after the signing of the MOU, an official press release issued from ONGC headquarters in New Delhi mentioned the passage through Bangladesh as ‘transport corridor’. Oil and Natural Gas Corporation Limited (ONGC) is India’s state- owned oil and gas company and its subsidiary OTPC signed the MOU with Roads and Highway Department of Bangladesh. Set up as a commission on August 14 , 1956 , the ONGC was later turned into a corporation with Indian government holding its 74.14 % equity stake. OTPC is a joint venture of ONGC with a nominal share of the state government of Tripura. Without mentioning a single word on the terms of reference of the MOU, the press release talked about its ‘significant implications’ and gave details of its work programme through the corridor facility provided by Bangladesh. “OTPC will incur the required expenditure for the (i) development of a Roll-On, Roll-Off (Ro-Ro) Jetty at Ashuganj port, (ii) construction of around 16 by- passes on water bodies (culverts, rain / storm water rivulets & two major rivers and (iii) repair, strengthening & widening of road between Sultanpur and Akhaura border. The work on all the required infrastructure has since commenced and is expected to be ready by mid February, 2011 ,” the ONGC press release said. “The transport corridor through Bangladesh ‘will facilitate the transportation of two gas turbines, two steam turbines and about hundred ODC (Over Dimensional Cargo) items required for the OTPC’s ambitious 726.6 MW Combined Cycle Gas based power plant at Palatana, Tripura,” the press release said. Reviewing the project implementation status in the Board meeting of OTPC held at New Delhi on December 13 , 2010 , the press release quoting. RS Sharma, CMD, ONGC and Chairman, OTPC said, “ The other significant implication of this MOU is the opening up of the new and a much convenient route for the growth of trade between the two countries through an easy access between north-eastern states of India and Bangladesh. This will also usher in the development of closer ties between the people of two countries.” The MoU for transit corridor was signed by RK Madan, Senior Adviser (Business Development, ONGC) & Director, OTPC on behalf of ONGC/OTPC and Azizur Rahman, Chief Engineer, Roads and Highways Department represented the governments of India and Bangladesh respectively. Is Bangladesh gripped in a psychological war? Promises of sub-regional connectivity with dreams of earning millions, the passage through Bangladesh has now been reduced to a transport corridor with only one country and that too without any fee. Earlier stories publicized huge earnings to the exchequer from transit fee. Soon after executing the free transport corridor for India, stories on prospects of getting huge energy from our neighbours seem to be receiving circulation. Is it another new twist of tremendous opportunity centering connectivity or yet another revelation of the transport corridor episode? Can it also be a part of a massive campaign of psychological onslaught against Bangladesh? “India needs the help of Bangladesh to get the environment-friendly and cheap electricity, and Bangladesh should extend its hand for that,” said Dr. Mashiur Rahman economic advisor to the Prime Minister on March 31. Customers of power produced in northeastern states will be in mainland India but it is not possible to send the electricity through the ‘chicken neck’. Linking Bhutan and Nepal again like the previous regional connectivity issue the technocrat advisor said, “There are huge potentials of producing hydroelectricity in northeastern states of India, Nepal and Bhutan, and through regional cooperation Bangladesh can be a beneficiary to it.” Dr. Rahman’s latest revelations testify the ‘significant implications’ of the transport corridor besides providing a new dimension to the psychological war that is tormenting the country. The debate over transit and corridor issue in Bangladesh received a new twist when the Indians demanded that the passage through land route of the country should be provided for free under Article V of the WTO. Shipping Minister Shahjahan Khan speaking in favour of fee waiver said, since Indians were constructing the road connection Bangladesh needed direly, why should they pay fee? Dr. Mashiur Rahman technocrat advisor for economic affairs to the Prime Minister speaking in favour of the waiver of fee from Indian vehicle went to the extent of saying, “Had our country been an uncivilised one or our leaders been illiterate then we could have asked for the fees, but that’s not the case.” He was speaking as the chief guest at the concluding session of the dialogue titled ‘Cooperative Development, Peace and Security to South Asia and Central Asia: Strengthening India-Bangladesh Relations’ in the city on March 31. Interpreting the WTO principles in own style he also said, “Transit facility should not be used for augmenting revenue rather to pass on the benefit to the customers.” “It’s a non-starter if we think that by giving transit facility, Bangladesh is actually providing subsidy to Indian export,” he added. Favouring withdrawal of fees earlier, Dr Rahman wrote a letter to the Shipping Minister to stop collecting fees from ships carrying Indian consignments of hardware for the Palatana power project. Subscribing to the advisor’s views, National Board of Revenue (NBR), the concerned government agency, stopped collecting fees for Indian goods using passage through Bangladesh. The stoppage of fee collection was termed not ‘waiver’ but ‘suspended’ by the NBR. The waiver introduced following Dr. Rahman’s letter will continue till “further decision”, according to newspaper reports. The text of the technocrat advisor’s letter to the Shipping Minister and the grounds of waiver on movement of Indian goods, however, have not yet been made public. In an interview with The Daily Star he quoted a few lines from the definition of ‘transit’ given in UNCTAD Technical Note 8 , avoiding some other crucial points from the same note. Borrowing definition from the Technical Note, Dr. Rahman in his own style gave the definition of transit during his interview. We however are producing the same segment of as per the technical note: “In the WTO context, goods are defined to be in transit when the crossing of the territory of another WTO Member constitutes only part of the journey between departure and final destination country, whether or not transshipment, warehousing, breaking of bulk or change in transport mode are involved.” What is important here are the next few lines, in which setting few conditions for transit it says, “GATT Article V therefore only refers to so-called through-transit, i.e. transit in the GATT context, normally involves at least three states. It should be noted that in the context of Customs transit regimes (see UNCTAD Technical Note on Customs Transit), other parts of a journey are also defined as constituting transit, notably inward transit (from a Customs office of entry to an inland Customs office), outward transit ( from the inland Customs office to the Customs office of exit) and interior transit (from one inland Customs office to another in the same country).” Trade facilitation negotiation that began in 2004 , seeks improvement and clarification of Article V of the WTO along with Articles VIII and X. The process of negotiation while in process already agreed that “the results of the negotiations shall fully take in to account the principle of special and differential treatment for developing and least-developed countries” and that “the negotiations shall further aim at enhancing technical assistance and support for capacity building.” During the negotiation process countries concerned in the WTO also involved its researchers, academics, business leaders, professionals, government officials and journalists. Bangladesh is no exception to this. Sachin Chaturvedi, an Indian expert involved in the negotiation process wrote in his findings that Article V ‘has limited relevance in the case of Bangladesh, as it is not bordered by any landlocked country’ Along with Chaturvedi many from Bangladesh also participated in the trade facilitation discussions and also carried out researches for the purpose and also earned good amount. Are they not aware of the implication of Article V? This group of researchers and academics, considered to be the conscience of the nation, at this stage, however, seem to be maintaining conspicuous silence. Those who talked about enriching the exchequer by billions from transit fee also went into hibernation once the Indians started demanding passage through Bangladesh under Article V of the WTO and without any fee. Before taking the discussion ahead let us see the provisions of Article V: Article V of GATT: Article V of the GATT 1994 provides for the freedom of transit of goods, vessels and other means of transport across the territory of another WTO via the routes most convenient for international transit. It stipulates the following principles of freedom of transit: (i) equal treatment independent of flag of vessel origin, departure, entry, exit, destination or ownership of the goods, vessels; (ii) prohibition to make traffic in transit subject to unnecessary delays or restrictions; (iii) prohibition to levy customs duties, transit duties and other transit related charges (except for charges for transportation or those commensurate with administrative expenses entailed by transit, or with the cost of services rendered); (iv) level of charges levied should be reasonable to the conditions of traffic),: (v) Most favoured nation treatment with regards to charges, regulations and formalities. Finance Minister AMA Muhith and Foreign Minister Dr. Dipu Moni on a number of occasions publicly ruled out waiver of fees on movement of Indian goods through Bangladesh saying that those would be ‘ country’s income’. Political leaders, in the opposition camp failed to capitalize on this visible rift in the ruling establishment. Those who earlier claimed to ‘lay down their lives to prevent transit to India’ also seem to have lost their strength and wisdom to question the legitimacy of such demands. It is time they realize that an effective study on the norms and practices across the globe and their comparison with the deal that Bangladesh had signed is now needed. It is also important to make public the terms of reference under the MOU. Mere rhetoric and lip service is not going to be effective this time around. Whether India has legitimately sought passage through Bangladesh under Article V of the WTO or misinterpreted it to its own advantage can be understood from a World Bank publication under the title ‘The Transit Regime for Landlocked States: International Law and Development Perspectives’ Freedom of transit provided in Article V of WTO is ‘not a right that any state can exercise in other transit states without their consent, ’ the book observes making a threadbare discussion on ‘ Principles, Doctrines, and Theories Influencing the Right of Access to the Sea’. ‘To be eligible to claim this right the demanding state must fulfill certain eligibility criteria,’ the book points out adding ‘The criteria are considered fulfilled for LLS specifically due to their geographical position and economic dependence, which together create a presumption in their favor of a right of transit’. Observers question how India has fulfilled the eligibility criteria with Bangladesh before seeking free passage through its territory. Perhaps those in favour for waiver of transit fees are in better position to answer.