Bilateral water transport deal favours Bangladesh

The India-Bangladesh Protocol on Inland Transit and Trade was renewed recently at the end of a two-day meeting in Dhaka. The renewal will be valid for two years till March 31, 2014. India had wanted a three-year tenure, but Bangladesh was not agreeable. The protocol was first signed in 1972, after the emergence of Bangladesh as an independent country. There have been several renewals since then, though the process has not always been smooth and easy.

Between 2003 and 2006, the renewal took place virtually on a month-to-month basis. In May 2007, a two-year tenure was fixed, and extended by another two years till March 31, 2011. Last year, the extension was granted only for one year. The last protocol, therefore, expired on March 31, 2012. The tenure of the protocol, India felt, should be co-terminus with the bilateral trade treaty to attract private investments in the inland water transport (IWT) sector.

If the trade treaty is valid for five years, the protocol should also be valid for the same period. Clearly, that has not happened.

Many in India’s IWT circles doubt the relevance of the protocol, which is supposed to benefit barge operators in both countries, but in reality works only to the benefit of those in Bangladesh. This is because the trade by river route with Bangladesh is dominated by barges carrying the Bangladeshi flag.

FEW INDIAN BARGES

The participation of Indian barges is negligible. As a result, even Indian exporters to Bangladesh use Bangladeshi barges. There are many reasons for this state of affairs, the most important being the high cost of operation of Indian vessels. Indian barge operators complain that, unlike their Bangladeshi counterparts, they do not get any subsidy. Also, there are allegations of undercutting by Bangladeshi vessels.

India’s connectivity by the river route to Assam is also through Bangladesh. Which means Indian vessels transporting goods between Pandu/Karimganj/Silghat (all located on the river Brahamaputra in Assam) and Kolkata/Haldia will have to transit through the Bangladesh waters, and therefore will be governed by the same protocol.

Unfortunately, transportation of goods by the river route between Assam and Kolkata/Haldia, once a lucrative business, has now virtually stopped.

The public sector Central Inland Water Transport Corporation (CIWTC) was once the major operator on the route. Not any more, with CIWTC now being in a moribund state. Private operators too are reluctant to enter due to the high cost of operation vis-à-vis rail and road transport.

RECENT TALKS

At the protocol meeting in Dhaka held in the first week of July, India conceded Bangladesh’s demand for enhancement of fee for maintenance of the river routes incorporated in the protocol. Earlier, the Indian Government used to pay at the rate of Tk 5.25 crore annually. Henceforth, the fee will be Tk 10 crore annually.

The Bangladesh authorities concerned are supposed to spend the amount on maintenance of the channel and other facilities. However, Bangladeshi vessels dominating the trade will be the beneficiaries of India’s largesse. Since movement of goods by river route to and from Assam too has virtually stopped, there is no way Indian vessels could hope to benefit from the improvement in the maintenance of the protocol route, if any.

Bangladesh is also very strict about allowing any Indian vessel into any river port not included in the protocol. Unfortunately, India’s attitude in this regard is lax. For example, the Pujali river jetty (on the Hooghly river near Kolkata), not included in the protocol, is extensively used by Bangladeshi barges for loading fly-ash released by a private power plant located nearby. There are instances where Bangladeshi vessels strayed into Tezpur (Assam), not included in the protocol. But India chose to look the other way.  As per the protocol, the Bangladeshi vessels are not supposed to participate in intra-country trade, that is, in the transportation of goods between, say, Kolkata/Haldia and Assam.  However, there have been complaints of violation of this provision of the protocol.

The Bangladeshi vessel owners justify it, saying the Indian exporters, who secure the permission, should be held responsible.  How such permission could be granted in violation of the relevant provisions of the protocol is a matter that needs probing. At the Dhaka meet, no decision could be reached on several other issues, such as India’s demand for long-term validation of the river transit and trade; permanent  transshipment facility at Ashuganj in Bangladesh to facilitate river-cum-road  transportation of goods to India’s north eastern States via Akhaura; and Bangladesh’s demands for extension of the protocol to cover the coastal transportation of goods between the two countries, and the payment of customs facilitation fee of $8 per tonne by India.

These issues, it was decided, would be examined by committees to be constituted by representatives from both countries. Other issues which came up for review included the pilferage problem on the Hooghly, landing rights for crew at all bunkering and loading/unloading points (raised by Bangladesh) and the need for proper maintenance of the protocol route — including night navigation facility, introduction of the global positioning system, land Customs station at Mongla and inclusion of more ports of call (raised by India).