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Optimising water transit

Dr. Abu Reza

Indian need for an optimal mode of transit across Bangladesh is well recognised. To extend friendly cooperation to India, Bangabandhu Sheikh Mujibur Rahman displayed his foresight and sagacity by restoring the Protocol on Inland Water Transit and Trade in 1972 which had been suspended by the Pakistan authorities in 1965. The protocol, importantly, was conditioned on the (i) use of the Bangladesh vessels and (ii) for India to meet the navigation cost over the designated six river channels. This clearly implied that Bangladeshis will have employment opportunities, constructing those vessels and in operating them.
The traffic performance indicates that India has made the most gainful use of the facility, as the manifold increase in India’s ‘transit’ traffic through Bangladesh since 1972 will bear out. This is so because the Inland Water Transit (IWT) is a less costly mode of transport compared to road or the railway. A recent study titled, Revival of Inland Water Transport: Options and Strategies, undertaken by the World Bank suggested that unit cost of Bangladesh IWT is significantly lower compared to the roads or the railway. It is estimated that while road transport per tonne kilometre is Tk. 4.5, on IWT it is Tk. 0.98.
The recent proposal by India to make way for coastal shipping across Bangladesh waterways, presumably along the approved six routes, may have adverse ramifications for the Bangladesh IWT. The river ports of Ashuganj and Pangaon are not on the coast of Bangladesh. Coastal vessels, larger compared to our sea-going coasters, would require much deeper draft entailing extensive dredging. Bigger in capacity, incurring less unit cost, coastal ships would potentially displace Bangladeshi vessels engaged in the Indian transit operation presently. Understanding that the Bangladesh river routes are cost effective, both in time and operational costs, India has logically proposed for a comprehensive transit/transport plan which would include use of sea/river ports, river routes, as well as the trans-shipment, transfer facilities in Ashuganj and the recently built Pangaon.
It is important to recognise that allowing ‘coastal shipping’ up to Ashuganj or even up to Pangaon, essentially seeking engagement in  transit operation, would violate the existing protocol, approved by Bangabandhu, unless those vessels are owned by Bangladeshis.
It has been reported that many of the Indian coastal vessels, which operate up to Singapore, are sitting idle. Also, presently it is less important for the Bangladesh shipping industry to gain reciprocal rights to visit many of the Indian ports, for it does not have much business there.
The more relevant issue is that bigger sized Indian coastal vessels will need a deeper draft, hence intensive dredging requirement, in the designated transit channels for which Bangladesh is currently responsible for their navigability. Recently, India has renegotiated and agreed to double the navigation charges over what prevailed in 1972, whereas the cost had increased manifold. Small wonder, the Indian High Commissioner has expressed willingness to make a ‘joint’ (?) request to the World Bank to allow Bangladesh to undertake the necessary dredging to maintain navigability.
An efficient dredger is an expensive piece of equipment and relatively costly to maintain. A dredger cannot be utilised throughout the year nor can it be used continuously. For an optimum outcome, its operation has to observe seasonal fluctuations of river drafts and adhere to varying tidal conditions. Capital dredging is done to dig new channels or for deepening the river draft if the vessel size is increased, as the coastal vessels would entail. Therefore, the argument for India to be invited to do the dredging of its designated routes is very strong. The same dredger employed in Bangladesh, in off-seasons, could also be deployed elsewhere in India to optimise its capacity utilisation. Besides, it has extensive dredger building capability. Bangladesh IWTA may be allowed to operate a fleet of less costly dredgers for maintenance of many river channels (153 presently). Its current capacity is not adequate for domestic needs. It may provide the traffic furniture for the designated transit routes, by way of marking and lighting the channels, allowing for night navigation, and providing river security and safety.
As for vessels, the private sector of Bangladesh has enormous capacity to construct the desired kind of vessels, facilitating Indian transit. A recent World Bank study has highlighted the comparative cost advantages of the country’s long neglected inland water transport. The Prime Minister herself has stressed for proper upkeep of our river routes by dredging, and has allocated resources for acquisition of dredgers. The phenomenal Indian traffic growth on the six IWT routes, confirms viability and cost efficiency of the IWT operation. It will be appropriate to engage the Indian transit traffic on our IWT system as much as possible. This will help develop a genuine Indian stake to the maintenance of the river drafts, thus securing the goal of our water strategy. From this point of view, India may be encouraged to deploy bigger capacity vessels for cost efficiency. This may also alert India that interference with the flow of water on the international rivers may prove self defeating, requiring more dredging, translating into costlier transit.
There is apparently acute desire on the part of Indian officials for the use of Ashuganj river port, requiring trans-shipment and multimodal operation, both by road and the railway. The reality is that it will entail short-haul operations between, say, Ashuganj and Agartola. Ashuganj inland river port will have to have a container handling terminal, warehouses for the general cargo, require customs and trade facilitation procedures, road and railway sidings etc. Railway in Bangladesh is a loss making entity, such short haul operations will inevitably add to its perennial loss.
Devoid of proper aggregates, adverse weather conditions, relatively costly road maintenance, onward transit clearance by road transport will also prove costly. Thus the Ashuganj option may not be an attractive one, vis-a-vis an existing IWT option. For, at the end of the day, all facilities of India will have to be paid for by the users.
Germany realises ‘cost recovery’ tolls for the use of its railways, roads, pipeline, tunnels, rivers etc. from all its EU members; here the SAARC partners could not be treated on a different basis. So, it would be appropriate to examine alternative options, study origin/destinations of present and future transit traffic flows, their commodity compositions, desired unitisation, determination of ideal vessel size and its draft requirement, and, of course, to study their cost benefit ramifications, and thus optimise an economically sustainable transit operation.

The writer is a transport economist.