Friday, July 1, 2011

Transit Without Survey : Agreeing To Indian Tearms Can Be Suicidal is not opposed to providing transit facilities.    to India, even many of its critics here say, but the way the government is moving in extraordinary hurry without caring for people's consensus and undertaking appropriate exercises on fixation of fees to be levied on various services may cause perplexity. This may lead to critical misgivings sharpening the country' s political divide in one hand while contributing to more misunderstanding with India on the other.    Economist Dr. Debapriya Bhattachariya, fellow of the Centre for Policy Dialogue (CPD), recently observed that the country is not ready for providing transit facilities in the first place because of lack of necessary infrastructure facilities. Besides, agreeing to any rate on Indian terms without undertaking proper exercise would be suicidal to the nation. He suggested adequate preparation is necessary before entering into any deal on service rates. But the government leaders have quickly dismissed the proposition, saying neither India nor Bangladesh can wait any more. They say transit for India through Bangladesh will introduce a new level of business to accelerate the pace of economic prosperity and those opposed to it are focused only on creating trouble using it as a political tool.    Gawhar Rizvi, Foreign Affairs Adviser to the Prime Minister, last week made the above statement at a seminar at Jatiya Press Club and hoped it will establish Bangladesh as a regional business hub. He further said that the government is taking all preparations to sign and seal a deal on fixation of various rates on transit facilities during the Indian Prime Minister Manmohan Singh's forthcoming Dhaka visit.    He said forty years have passed since Bangladesh became independent "and we can not wait further to establish the Indian connectivity. It would open up a wider scope of greater regional connectivity of Bangladesh to Nepal, Bhutan and other countries beyond the region." Rizvi blamed narrow mindedness as a factor which delayed the opening of the country to Indian transportation of goods and passengers.    However, political analysts wonder who Dr Rizvi is as he is dealing with such sensitive issue while the people and the media do not have any idea about him and the deal that Dhaka is going to sign with the Indian prime minister. The government has to come out with the details of the deal and try to reach a national consensus.    They also feel that before he makes public comments on national issues he has to establish his credential as a patriot and has the country's interest in his heart. He is a foreign national and is working on contract and would return once he finishes his job.    Rizvi opened the delivery saying, "Assalamu Alaikum and Nomoskar. " He dismissed the claim that the government is giving a corridor facility to India in the name of transit. To a questioner--who asked why Dhaka has to scrap a circular issued on realizing transit fee-- Rizvi said, "India has not refused to pay it, they will pay what we will demand based on certain calculation."    Rizvi said the fixation of any rate should also take into account the market factor and the business volume. "We must keep it reasonable to entice them to use the facility. We may demand anything but they may have their own calculation." Rizvi said it is not fair to demand equal sharing of money to be saved from shortcut transit route. "Such argument will only reflect the narrow mindset to create trouble in the process", he said, adding that Suez canal authority never make a point to shipping companies saying "you are saving so much by avoiding long shipping routes and so you should agree to equal sharing of the saving."    To a question why we are in a haste to sign a deal without enough exercise on different issues, he said the contrary has already passed 40 years and the waiting should be no more.         TC Chairman    Tariff Commission (TC) Chairman Dr Mujibur Rahman, who lost job during the previous BNP government for taking part in open electioneering campaign of 2001 for Awami League (AL) and restored to service again this time on the AL's return to power, said it is not fair to relate recovery of transit- related infrastructure investment to transit fees. Bangladesh is investing on its own need to develop the facilities with $1 billion Indian credit this time. But the country needs further investment in this regard which may stand at $7 billion in next three to four years. He said the cost recovery would be slow, it may come from expansion of transport network, development of hotel and restaurant, clearing forwarding services and such other trade facilitation activities. He said connectivity will also bring dividend by way of facilitating resolution of political misunderstanding and through increased cultural ties. Bangladesh should move towards a bigger merger with Indian trade and transportation system like the one that the European countries have developed, he maintained. He disagreed to relate investment recovery with transit fees saying Bangladesh is investing for its own good and the recovery may be slow.         $11.6 for 100 km    Meanwhile media reports mentioned a formula quoting official sources as saying there is a proposal to fix US$11.6 for each 100 kilometre distance for trucks, while it may be $5 for passenger buses over the same distance. The charge may be fixed for repair, maintenance, compensation against accidents and environmental damage.    Discussants at another seminar last week in the city said Bangladesh should charge service fees rather than customs or import duty for allowing transit to its neighbouring countries. "Transit fees should come as a payment against export of services rather than 'rent from geography'," said AB Mirza Azizul Islam, former finance adviser to the last caretaker government. However he said, "It would be immoral to exploit geography in order to extract unreasonable rent from the neighbours."    Import or customs duty applies if goods are produced in a particular country and are exported to another country, Islam said at a workshop in Dhaka. "But the goods in transit are not meant for use in Bangladesh," he said. Sadiq Ahmed, vice chairman of PRI, said the principles of transit between two points of India through Bangladesh are not different from the use of port services for third country trade. Ahmed said Bangladesh will export services to India and traffic will pay a service charge, which should be based on the principles of cost recovery and rate of return on investment. He was speaking at a workshop on the economics of transit in South Asia's northeast region organised by Policy Research Institute (PRI), a think tank.