Northeastern View | India’s Kaladan Project in western Myanmar may not be viable - Hindustan Times
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Northeastern View | India’s Kaladan Project in western Myanmar may not be viable anymore

Feb 28, 2024 08:00 AM IST

Resistance forces fighting the military regime gain ground along the river in Rakhine and Chin states, even as the project runs late and costs are escalating

Last week, the Arakan Army (AA) – an ethnic armed organisation based in western Myanmar – captured a police station just outside Sittwe, the capital of Rakhine state, as part of its ongoing war against the ruling military regime. Reports suggest the AA is close to seizing the entire city from junta forces.

File photo: Workers seen on the Indian side of the Kaladan project at Lawngtlai in Mizoram.(HT Photo) PREMIUM
File photo: Workers seen on the Indian side of the Kaladan project at Lawngtlai in Mizoram.(HT Photo)

Sittwe, situated at the mouth of the Kaladan river is the location of a deep sea port developed and funded by India. It was inaugurated less than a year ago by India’s Union minister for ports, shipping and waterways, Sarbananda Sonowal, and his junta counterpart, Admiral Tin Aung San.

In January, the AA occupied Paletwa, another important town upriver from Sittwe located in southern Chin State, just north of the interstate border with Rakhine. Paletwa is home to an India-funded inland water terminal on the Kaladan river.

Both the Sittwe seaport and Paletwa river terminal are part of a single mega-project financed by New Delhi, known as the Kaladan Multi-Modal Transit and Transport Project (KMMTTP). The KMMTTP was supposed to be India’s crown jewel in Myanmar. Today, it remains stuck in a bottomless abyss of conflict and uncertainty.

But, what exactly is the KMMTTP? And why did India come up with this project?

New thinking

By the turn of this millennium, India had embarked on two goals: building a working relationship with the military regime in Myanmar to protect its own interests; and forging new links with Southeast Asian economies to expand its geoeconomic footprint. The Look East Policy (LEP), launched by the PV Narasimha Rao government in 1991, fueled both these impulses.

A third imperative emerged during the early 2000s – the economic development of Northeast India. The idea was to open up the landlocked region to new markets and supply chains. This was partly driven by the need to subdue the region’s many ethnic insurgencies, which New Delhi thought could be achieved through economic development and market integration.

All of these dovetailed into a seemingly path-breaking idea: giving maritime access to Northeast India through western Myanmar using a semi-circular west-to-east route. A south-to-north route via Bangladesh, which opens up to the Bay of Bengal, would have been shorter. But, because Dhaka refused to provide port access to India, New Delhi had to settle for an alternative, although more complicated route, through western Myanmar.

Rakhine was also a strategic choice. China had its eyes on the coastal Myanmar state, which offered both critical maritime access and offshore oil and gas drilling potential. India, therefore, had to establish a competitive footprint.

New horizons

In 2007, the Burmese junta violently crushed pro-democracy protests led by Buddhist monks. India’s response was mute, much to the chagrin of activists in Myanmar. It soon became clear why. One year later, New Delhi signed a framework agreement with Naypyidaw to get the KMMTTP going. Business, not democracy – that’s what India sought in Myanmar.

The plan was ambitious – to build an economic corridor over land and water from West Bengal to Mizoram through Myanmar’s Rakhine and Chin states. Goods were to leave Kolkata’s Haldia port by ship, travel some 539 km across the sea to Sittwe, then snake up northward for about 158 km on the Kaladan river to Paletwa in Chin state, and finally, travel further north on a 109 km road to Zorinpui in southern Mizoram, near the international border. The whole project route is about 806 km long.

In 2010, both sides jointly laid the project’s foundation stone. But, work was slow. It took India six years to build just the river terminal in Paletwa and another four years to finalise the contract for the Sittwe Port. It was only in 2023, 15 years after the agreement was signed, that India officially flagged off operations on the Sittwe Port, that too in the middle of a civil war. The final leg – the road from Paletwa to Zorinpui – remains incomplete.

The building of the KMMTTP has not just been painfully slow, but also very costly. As per the 2008 agreement, India was to spend some $110 million (around 994 crore today) on the project through a mix of direct financing and loans. But, current estimates hover somewhere around $484 million ( 4011 crores) - a nearly 350% jump. That is a lot of money to spend on a connectivity project that wasn’t just geographically unwieldy from the start but has also begun to look economically unviable.

New future?

One reason why India invested in a longer go-around route through Myanmar to open up its Northeast was Bangladesh’s reluctance to share coastal access. That is, however, no longer the case. Last April, the Sheikh Hasina government announced that it would give India access to the Chittagong and Mongla ports for cargo transhipment.

In fact, in 2020, India did a transhipment dry run from Kolkata’s Haldia port to Chittagong. From there, the cargo was ferried overland to Tripura in Northeast India. A faster multi-modal alternative to KMMTTP had emerged. So, is the KMMTTP even worth it anymore?

Add to this the continuing instability in Myanmar, which is unlikely to end anytime soon. Even if the junta is replaced, Rakhine and Chin states will continue to be volatile because of contesting interests and territorial claims between various powerful actors, such as the AA and Chin National Front.

It is also likely that China will continue to dig its heels deeper into western Myanmar. This calls for a countervailing Indian presence. Would New Delhi be able to do so while also limiting cost overruns, maintaining local goodwill and navigating a fractured security-scape? That is a question that New Delhi needs to confront head-on before it’s too late.

Angshuman Choudhury is an Associate Fellow with the Centre for Policy Research and focuses on Northeast India and Myanmar. The views expressed are personal.

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