Speeding up Kaladan project to be centrepiece of Sushma’s Asean visit

India hopes to combine economic leadership with faster delivery of projects

There is an interesting sidelight to the itinerary of External Affairs Minister Sushma Swaraj’s visit to three Asean (Association of Southeast Asian Nations) nations this week.

In Indonesia she will inaugurate a meeting of an Asean-India network of think tanks, which has been moribund for the past two years. Its last meeting was held in 2015.

India has begun to run fast in the Asean region to shore up ties with the 10 member nations, but it is still slow compared to the pace of the other suitor, China. “While delay in the meetings of the think tank does not amount to much, those do hold up as examples of India’s pace of engagement with the region,” said a senior official connected with the network.

To cut that perception, the India government is moving on two fronts. The first is to fast track infrastructure projects; the second is to emerge as a champion of pan-Asian issues like digital connectivity and energy pricing.

As part of the first leg, the ministry of road transport and highways intends to approve the detailed project report on the second phase of the Kaladan multi-modal transit-cumtransport project by March. Again, in March, it will award the contract for the operation and maintenance of the first phase of the port-led project, which will back up a special economic zone in Myanmar. India will want to showcase the project to the 10 chiefs of the Asean countries who will gather in New Delhi for the Republic Day parade this year. While outgoing Foreign Secretary S Jaishankar said it would be “unfair on ourselves to always compare our projects as a competition with China”, the timelines have speeded up.

India is trying to tie the loose ends to push for quickly completing the trilateral highway from India to Thailand, cutting through Myanmar. Indian mandarins hold it up as the alternative to China’s high-speed rail project from Kunming to Singapore. The Chinese rail link will link the capitals of Laos, Thailand, and Malaysia, and terminate in Singapore by 2027. It is also expected to branch out to Yangon in the west and Phnom Penh in the east.

History is not on India’s side. The detailed Kaladan project or, to give its full name, Kaladan Multimodal Transit Transport project, was approved by the Indian government for execution by state-owned Inland Waterways Authority of India in 2003. The agreement took another seven years to complete in May 2010. Constructing the first phase of the project, including the port and the inland water transport jetty at Sittwe, could be completed only by March last year by Essar Projects India Ltd. The government expects to telescope the timelines much more in the second phase. “The port at Sittwe will become the nodal point for transportation of goods for the Rakhine state and to the North Eastern states of India along the river Kaladan. It will also provide a gateway for trade from these places to other countries through international shipping,” a government of India note says. While road connectivity from India’s northeastern states are gradually coming into place, the Indian team will expect the Myanmar government to push for the completion of highway link to Thailand.

The second element is more complex. India will host the next International Energy Forum Ministerial Meeting in New Delhi in April, when it will try to push its vision of a South Asian energy grid. It hopes to rope in Myanmar as a key gas producer with Bangladesh, Nepal, Bhutan, and Sri Lanka. One of the elements of those is to use Bangladesh ports as a transhipment hub between Paradip port in Odisha and destination states in the northeast including Tripura, Meghalaya, and Assam. The oil ministry wants Opec to replace the ‘Asian Premium’ in its gas pricing with an ‘Asian Discount’. India hopes to combine its role as the third-largest energy market to win this pricing war, which Asean countries can also dip into.

Geographically and politically the region has become even more important for India as the World Trade Organization ministerial in Buenos Aires showed. The only bloc of nations that supported India wholeheartedly at the unhappy event was from the Asean nations.