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Exclusive Interview

'The transit we are talking about with India does not fall under any international definition'

Dr. M. Rahmatullah
**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 virtu-
ally 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 halfhearted 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 communique 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-