The foreign secretaries of four countries at the Kathmandu meeting Wednesday set the ball of sub-regional cooperation rolling by discussing I lie establishment of a South Asian Growth Quadrangle (SAGQ) grouping, according to diplomatic sources.

An internal memo was signed following the day-long discussions launching the first phase of cooperative endeavours in the sub-regional sphere among the four geographically contiguous countries of Bangladesh. Bhutan. Nepal and the north eastern states of In-

dia. the sources said.

The foreign secretaries accepted in principle the approach paper prepared by Nepal with minor changes and decided on six thrust sectors for cooperative efforts on a sub-regional basis.

The six sectors are multimodal transportation, energy, tapping of natural resources, environment, investment and tourism.

The multimodal transportation sphere will look into all aspects of infrastructure and facilities for transportation and communication for. the use

of the four countries including upgradation of ports, railways and airways for transport of goods and products.

Nepal has been made the overall co-ordinator for the first phase of the sub-regional cooperation. The initial timeframe earmarked for detailed study, which was earlier envisaged to be completed in six to nine months, has now been extended to one year.

The Kathmandu meeting decided that each of the four countries pursuing the "South Asian Growth Quadrangle" will undertake sectoral studies in one or two thrust areas.

A meeting of Expert Committee will meet in July to deal with the aspect of sectoral studies.

The meet decided that each of the countries will arrange finance for further detailed feasibility study of projects.

Although the Indian representatives attending the meeting suggested mobilisation of domestic and regional resources for feasibility studies, the three other delegations insisted that funds from multilateral agencies could be sought for more comprehensive studies in identifying mega projects, the sources pointed out.

A director of the Asian Development Bank presented a concept paper on the potential of sub-regional cooperation and the Bank expressed its willingness to fund the entire first phase of the sub-regional programme.

Among the ideas presented at the Kathmandu meet, it was suggested that the existing capacity of Chittagong Port could be increased four-fold by raising its management and handling efficiency. Development of a deep sea port near Chittagong for acting as a gateway to the south Asian sub-regipn was also suggested.

The ADB was reportedly told that its offer of first phase study of the areas of sub-regional cooperation would be considered seriously and the decision in this regard would be conveyed to it later. However, the meeting reached a consensus that external participation involving fi-

nancing would only be required on a large-scale in the second phase while undertaking mega projects.

The moot also decided that sub-regional efforts should not be construed to be actions against the spirit of SAARC.

Tlie Kathmandu meeting was attended by Bangladesh Foreign Secretary Farooq Sobhan. Indian External Affairs Secretary Salman Haider. Acting Foreign Secretary of Nepal Kumar Prasad Gywaliand the Foreign Secretary of Bhutan.

The meeting decided that the foreign secretaries would brief their respective foreign minis- . ters on its outcome. The foreign ministers of the four couritries . concerned are due to meet separately at a "break fast meeting" in New Delhi on April 6 to review and endorse the decisions while they are in the Indian capital to attend the NAM foreign ministers meeting, the diplomatic sources said.

PTI adds: Indian Foreign Secretary Salman Haider said there was no contradiction between the-quadrilateral body and SAARC.

Pakistan is said to have reservation about the grouping.

Bangladesh Foreign Secretary Farooq Sobhan said the quadrilateral cooperation. is to be pursued outside the framework, of the South Asian Association for Regional Cooperation (SAARC) as per Pakistan's wishes.

"We are aware of the views expressed by certain parties of Bangladesh. It is a matter of determining what is the best interest of Bangladesh." Farouq Sobhan told reporters here, says AFP.