Regional connectivity project in limbo thanks to surging land prices

Although land acquisitions of all three land ports were envisaged to take a year, it took about three years for some reasons

Cost increase in land acquisition, delay in payment of compensation and the Covid-19 pandemic have slowed down the implementation of the Bangladesh Regional Connectivity Project-1(BRCP-1), sources said.

Although land acquisitions of all three land ports were envisaged to take a year, it took about three years for some reasons.

The duration of implementing the project was July 2017 to June 2021, and was later rescheduled up to June 2023.

The World Bank (WB) through the Economic Relations Division (ERD) sent its consent for extension of a two-year time period.

To expedite international trade and increase trade volume with the neighboring countries, the government of Bangladesh is implementing BRCP-1 project with a total cost of $170.42 million, of which Project Aid (PA) amount is $150 million and the government's share of cost is $20.42 million, said a top official of the Bangladesh Land Port Authority (BLPA) last week.

The project is being jointly implemented by three ministries –Ministry of Shipping (BLPA), Ministry of Commerce (WTO Cell) and Ministry of Finance (NBR).

The component of the Ministry of Shipping (BLPA) is $75 million, Ministry of Commerce (WTO Cell) $8 million and NBR (Bangladesh Customs) $67 million, according to the project paper.

The BRCP-1 project is designed to lower time and costs associated with trade and to improve infrastructures and conditions for trade along the strategically important regional transport corridors, said the BLPA official.

Project beneficiaries include passengers, producers, traders and transport service providers of Bangladesh, India, Bhutan and Nepal, as well as communities living around the project corridors in Bangladesh, he added.

As of April last year, cumulative physical progress was 11% and financial progress was 14%, while Tk95.38 crore has already been spent.

The original development project proposal (DPP) was estimated at Tk69,300 crore and later revised at Tk73,186 crore, showing a 5.607% rise, according to the project paper.

A project evaluation committee (PEC) was held on the proposed 1st RDPP at the Planning Commission on February 3, 2020.

Major component of the project includes development of Sheola land port in Bianibazar in Sylhet and Ramgarh land ports in Khagrachhari, expansion of Bhomra land port in Satkhira and improvement in security system at Benapole land port at Sharsha, Jessore , the BLPA official further said.

According to the project paper, a significant portion of the three land ports have to be developed in between zero-line and 150 yard-lines – Sheola 52%, Bhomra 20%  and Ramgarh 100%.

The communications between India and Bangladesh through proper channels are underway as consent from BSF and BGB to construction works between zero-line and 150 yard-lines is required.

Meanwhile, the original DPP was approved on August 1, 2017 by the Ecnec and the administrative order was circulated from the Ministry of Shipping later on October 11 the same year.

The subsidiary grant agreement between NBR, Ministry of Finance, and Bangladesh Land Port Authority, Ministry of Shipping, was signed on a grant basis on September 18, 2019.

The land acquisition proposals were sent to the deputy commissioner’s office on June 25, 2018, July 12, 2018 and June 11, 2019 respectively.

It was completed by December 2020.

Talking about the project, Parvez Karim Abbasi, assistant professor, Department of Economics of East West University, said: “It is unfortunate that despite having a long and glorious common indivisible history, South Asia is one of the least integrated regions, in terms of trade and connectivity."

A legacy of distrust and suspicion has managed to cloud the perceived benefits of greater interregional trade and investment flows within the region. Sub regional integration initiatives such as BBIN have been widely hailed as a means of overcoming this impasse, he also said.

Bangladesh through the BRCP initiative can leverage its unique geospatial location to act as the regional hub for multimodal connectivity and trade. Trade facilitation through the construction of new land ports such as those in Sheola and Ramgarh and expansion of existing ones at Bhomra would ideally ease the pressure on Benapole land port and reduce cost of doing business for traders across both sides of the border, Abbasi further said.

It is also hoped that this would lay the foundation for Bangladeshi firms to tap into the vast trade potential with Bhutan, Nepal and North East Indian states.  Policy planners must also ensure that BRCP translates into a win-win scenario for all parties concerned and should specifically be mindful that it leads to greater access of Bangladeshi products within the Indian markets and a commensurate reduction in non-tariff barriers, he added.