The resolution of the growing conflicts coupled with insurgency issues in Myanmar will remain crucial to attracting more private investors to utilise Sittwe Port.
The Union Minister of Ports, Shipping and Waterways, this momentous occasion not only hopes to strengthen the strategic ties but also holds immense promise for the economic development of the Bay of Bengal region.According to Sarbananda Sonowal, the Union Minister of Ports, Shipping and Waterways, this momentous occasion not only hopes to strengthen the strategic ties but also holds immense promise for the economic development of the Bay of Bengal region. Therefore, it remains important to analyse whether the showcasing of the operational prowess of the $484 million Kaladan Multimodal Transit Transport Project (KMTTP) is effective.
However, by following the water and land course Sittwe - Chittagong- Sabroom - Agartala route, the transportation time will be reduced to two days, resulting in substantial savings in terms of both cost and time and decreasing carbon emissions.Not only does it benefit the landlocked regions of India, and its neighbours Nepal, and Bhutan, but it is an instrumental in the development of Rakhine State, which, through rich in minerals and resources is often wrecked by ongoing internal strife between ethnic armed groups, particularly the Arakan Army (AA) and the Junta. U Khin Maung Gyi, a respected Rakhine businessman and Vice President of REIC Rakhine Economic Initiative Public Co., Ltd, emphasised that this development will also have positive implications for Myanmar's economy as a whole. Granting Rakhine State more trading freedom would bring multiple benefits to import and export businesses. It also underscores the need for Rakhine State to increase its efforts in agricultural production, as agricultural goods constitute its primary export, destined for India and other countries.
The AA is actively engaged in a determined struggle against the military junta, striving for autonomy and the restoration of democracy.The section where construction work is underway is currently embroiled in an armed conflict involving the Arakan and Myanmar armies. The AA is actively engaged in a determined struggle against the military junta, striving for autonomy and the restoration of democracy. The areas where the remaining work needs to be completed have been heavily affected by aerial strikes and the ravages of war. The ongoing conflict between the AA and Tatmadaw (Myanmar Army) has resulted in the displacement of a significant number of individuals in Rakhine State during January-February 2023. Across 11 townships in the state, a total of 73,458 people have been forced to leave their homes. Additionally, in Paletwa township in Chin State, another 4,632 individuals have been displaced. This brings the total number of displaced people to 78,090. To foster goodwill and mitigate the risk of insurgent groups targeting the project, Ircon International, responsible for the road component, has opted to engage local subcontractors in Myanmar. However, no public announcement has been made regarding the selection of a subcontractor. The working contract stipulates a 40-month timeline for the completion of the road component, but it also includes a provision for potential delays arising from unforeseen environmental, political, and security concerns. The contract also states that the progress made by the previous contractor will be reassessed, and even completed portions may be reconstructed if necessary. The ongoing violence, relentless military operations, and continuous attacks by armed groups introduce significant uncertainty, making it difficult to predict a timeline for completion. Despite the Sittwe port holding significant potential for trade with Myanmar through the strategic transportation of goods, gas, or oil to the Northeastern Region (NER), its viability as a cost-effective regular transportation route to the NER is uncertain. This is primarily due to the anticipated high costs associated with frequent bulk breaking and transshipment. In addition, though the Paletwa terminal has been completed, its operationalisation is dependent on the completion of maintenance dredging on the Kaladan River between Sittwe and Paletwa. Until this is accomplished, cargo vessels will transport goods exclusively to the Sittwe port.
The ongoing violence, relentless military operations, and continuous attacks by armed groups introduce significant uncertainty, making it difficult to predict a timeline for completion.The resolution of the growing conflicts coupled with insurgency issues in Myanmar will remain crucial to attracting more private investors to utilise this route. A coup or increasing conflict intensity creates greater "risk" in "returns" to the capital expenditure. Therefore, any private investor will think twice about putting money in an economy that suffers from such a "governance deficit". While the successful operations of the port open opportunities; conflict resolution will remain imperative for the completion of the road component that completes the proper operationalisation of the entire project and more judiciously showcases the prowess of the KMMTTP.
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Sreeparna Banerjee is a Junior Fellow at the Observer Research Foundation Kolkata with the Strategic Studies Programme.Read More +