What's new

Transit Facilities to India, Nepal, Bhutan $2.3b net profit in 30 years projected

CaPtAiN_pLaNeT

SENIOR MEMBER
May 10, 2010
7,685
0
4,792
Transit Facilities to India, Nepal, Bhutan
$2.3b net profit in 30 years projected


$2.3b net profit in 30 years projected

Bangladesh could reap a net profit of $2.3 billion in 30 years by giving transit facilities to India, Nepal and Bhutan, shows a study of the Centre for Policy Dialogue (CPD).

The country would have to invest $1.17 billion in capital expenditure, operation and maintenance costs for more than 30 years to develop corridors for transit traffic, says the independent study that will be made public on November 10.

Of the amount, $53.74 million and $769 m would be required to set up road and rail links, $79 m and $129 m to upgrade Chittagong and Mongla ports, and $99 million to operate and maintain them.

Transit revenue would be low in the first five years since many constructions and arrangements would be done during the period. Bangladesh would be able to reap about 10 percent of the full potential benefits at that time, says the study.

"From the sixth year onward, full potential benefits are assumed to be realised," it mentions.

A team of experts from Bangladesh, India, Nepal and Bhutan prepared the study report. Dr Rahmatullah, former director of the United Nations Economic and Social Commission for Asia and the Pacific, led the team.

Bangladesh could gain three benefits from transit services, says the study.

Freight charges within Bangladesh's transport network would go down and the country would receive revenue in port charges from international cargo at Chittagong and Mongla ports. Besides, transit fees to be earned by Bangladesh will be equivalent to 70 percent of India's transport cost saving, thanks to diversion of each route, it says.

The study covered 14 corridors -- eight road and five rail routes, and a waterway -- for transit traffic between Bhutan, India and Nepal through Bangladesh.

Dr Rahmatullah declined commenting on the study. He said the government would go through different studies including the one prepared by the CPD and decide its next course of action.

He said Bangladesh's investment would be required in the multi-modal transit including rail, road and river routes that are now under consideration. On the basis of this, Bangladesh could impose transit fees in a manner that would create a win-win situation for both Bangladesh and India.

The government wants to reach an agreement with India very soon on the issues of transit and transhipment, said a high official at the finance ministry.

The CPD report will be presented at a seminar on transit and transhipment to be organised by the National Board of Revenue in Dhaka on November 10.

Prime Minister's Economic Adviser Mashiur Rahman said the government has been working on a resolution on transit and transhipment.

He declined giving any detail.

In the CPD report, the results of aggregate Cost Benefit Analysis show that trade in transport services is an economically viable option for Bangladesh. The Internal Rate of Return is 33.46 percent, the benefit-cost ratio 2.86 and the Net Present Value $2.3 billion.

A debate is on whether there should be a transit and transhipment arrangement between Bangladesh and India, and what should be the charges for the facility.

Giving an example of the benefit of transit for the parties involved, CPD Executive Director Mustafizur Rahman said just assume that India has to spend $100 for transporting goods from one state to another in the North East. If Bangladesh allows India to use its transport network the goods could be transported for only $60. Now both the governments have to decide on the share of the amount saved.

Mustafiz said Bangladesh could impose charges in any form such as transit fees or toll.

Zahid Hossain, senior economist of World Bank, said policymakers could make the right decisions considering the options and can do much better at the negotiation table if equipped with solid information on costs and benefits of the alternative options.

Such analysis could help clarify many misconceptions about the transit issue, he said.

Prior to the partition of India in 1947, trade between the northeastern sub-region of South Asia and the rest of India was done through the territories of what is now Bangladesh.

Rail and river transit across the erstwhile East Pakistan continued until 1965. Only inland water transport transit was restored in 1972 after Bangladesh's independence.

Due to fragmented transport, Europe-bound consignments of Assam Tea now travel 1,400 kilometres through India's 'chicken neck' to reach Kolkata Port. Traffic from Tripura would have to travel only 400 km instead of 1,650 km to reach Kolkata port, if transit through Bangladesh was possible.

Bangladesh and India signed a joint communiqué in January 2010 creating a scope for introducing multi-modal transit and transhipment between the two nations.
 
Last edited:
I am just wondering is it really beneficial for bd to give transit facility to india only for this $2.3 billion for 30 years... which is only around profit of 75 million dollar per year. I am just wondering how much bd will lost business opportunity in the NE indian territory... how much this transit will create traffic congestion and other problem in bd and last of all how much it will be beneficial for bd to give this transit.... just curious.... as I thought earlier profit margin will be much much higher than $2.3 billion dollar over 30 years ... :S
 
Already India is acting funny and lots of other unfavorable factors remain there. Some people seem super positive which seems to me they live in the unfeasible paper proposals only.
 
Last edited:
Already India is acting funny and lots of other unfavorable factors remain there. Some people seem super positive which seems to me they live in the unfeasible paper proposals only.

That is also my concern.... why some of the people are so interested to give transit to india without measuring the viability and cost benefit analysis... how much bd will loose business in the NE for this over the period... how much india will utilize this transit to dump their products in bd... how much it will effect our transport sector.... all these questions need to be answered before... giving this transit facility...
 
The country would have to invest $1.17 billion in capital expenditure, operation and maintenance costs for more than 30 years to develop corridors for transit traffic, says the independent study that will be made public on November 10.
Of the amount, $53.74 million and $769 m would be required to set up road and rail links, $79 m and $129 m to upgrade Chittagong and Mongla ports, and $99 million to operate and maintain them.
You guys are just computing profit out of the transit fees, but forget to account for the investment that will be going into the country's infrastructure including roads, rail and port facilities (as I quoted from above).
These infrastructure will help in the growth of the local economy as well which could be significantly higher.
 
only 2.3 billion dollars for 30 years period :woot:
Not so viable I reckon :rolleyes:
2.3 billion dollar is not the core issue here.... the question is how much bd will lost business over the years....for this transit... this is a big question....

There is also concern that different NE indian terrorist org may target bd for this...if that is the case that will be a major risk factor for implementing this project....
 
You guys are just computing profit out of the transit fees, but forget to account for the investment that will be going into the country's infrastructure including roads, rail and port facilities (as I quoted from above).
These infrastructure will help in the growth of the local economy as well which could be significantly higher.

This is am open ended question how much bd economy will be benefited by making road and rail link from benapol to agortola..... this routes will mainly be used by indians.... n 1 billion dollar is a too small amount... if i am not wrong the 6 lane dhaka chittagong connecting road will cost around or over 6 billion dollar and it will contribute 1.7 percent gdp growth.... but just wondering how much this benapol agortola connecting route will contribute gdp groth to bd??
 
bangladeshi's it seems need to wrestle their govt. out of indian control and work in the interests of the people, good luck!!!!!!!
 
I do not think that AL gave this transit to India thinking the cost benefits of BD. They gave this transit to India as a love/gift/as debt of past help/or as being a stooge for the own party benefit of hell-AL.

I think improvement in NE is not good for BD economically and strategically. The more they will be strong the more they will act. This is simple.
 
I do not think that AL gave this transit to India thinking the cost benefits of BD. They gave this transit to India as a love/gift/as debt of past help/or as being a stooge for the own party benefit of hell-AL.

I think improvement in NE is not good for BD economically and strategically. This is simple.

Listen bro I have no problem to give the transit to India as long as it is beneficial to bd and it does not affect bd economically and through other means.... India is a big country with big population ..... in this regard if we would have got proper benefit with easy access to indian economy then it would be beneficial for both of us.... but what benefit we are getting from india??? are we getting our legal share of water.... are we getting easy access of bd product to india ... only india is using bd as a dumping ground of indian product.... do they give permission to air bd channel in west bengal....this is not all... in recent times all the garment sector unrest most likely is created by india to destroy this sector..... This is really sad....that some so much interested people are bent on giving transit to india without doing the cost benefit analysis.
 
This is am open ended question how much bd economy will be benefited by making road and rail link from benapol to agortola..... this routes will mainly be used by indians.... n 1 billion dollar is a too small amount... if i am not wrong the 6 lane dhaka chittagong connecting road will cost around or over 6 billion dollar and it will contribute 1.7 percent gdp growth.... but just wondering how much this benapol agortola connecting route will contribute gdp groth to bd??
Well this is for your govt and people to decide on how they can utilize this money and enhance your infrastructure for the people. Building a transit road is never just meant as a terms of revenue, but to develop the whole region alongside the road. I have seen areas transformed near my village in India, where the expressways have gone through... both local farming villages and businesses.
I hope the same for the region and the people.
 
does always money matter?its really silly government just dreaming of money,skipping the sensitive issues and facts....and i m really doubtful though about the money mentioned above..
 
Well this is for your govt and people to decide on how they can utilize this money and enhance your infrastructure for the people. Building a transit road is never just meant as a terms of revenue, but to develop the whole region alongside the road. I have seen areas transformed near my village in India, where the expressways have gone through... both local farming villages and businesses.
I hope the same for the region and the people.

If building roads would have been enough to make a huge development of the surrounding region of the road then whole of bd will be developed in just mater of years as bd government is inventing for infrastructure of various form...

If you would have read my previous post then you would have seen my concern was different.... to figure it out how much it will benefit bd... how much this transit will create problem in bd internally, how much bd will lost business... how much it will affect transportation sector..... whether this transit make bd a terrorism target of the NE indian terrorist org etc... if you would have looked at my previous post I said it clearly I have no problem in giving transit to the india as long as it is beneficial to bd.... n in return bd should get some other form of benefit from india.... should get her legal right of water, easy access of bd product to india... n vice versa.... not just a one sided deal....
 

Users Who Are Viewing This Thread (Total: 2, Members: 0, Guests: 2)


Pakistan Defence Latest Posts

Back
Top Bottom