To be a Build, Transfer and Use project to be financed by India: Jairam Ramesh Chennai: India has agreed to rebuild the Sitwe port in Myanmar at a cost of $120 million. It will be a 'Build, Transfer, and Use' (BTU) project, the first of its kind, and will be financed by a grant by the government of India to its neighbour. Users will be charged for services to be offered by the port once it is redeveloped and handed over to Myanmar. A final agreement on the project is likely to be signed during a high level visit from Myanmar in April this year.
Announcing this here on Monday, Union Minister of State for Commerce Jairam Ramesh said the project had been under discussion for almost six years. "But a paradigm shift in our thinking, thanks to the Prime Minister and External Affairs Minister, resulted in changing it from a Build Operate Transfer (BOT) project into a BTU venture. The Myanmar authorities had serious reservations on a BOT approach and so we switched over to this new concept," Mr. Ramesh said in an interaction with TheHindu journalists. He explained that the project involved three components (I¡½(B rebuilding the port, making the Kaladhan River navigable up to Mizoram and developing highway connectivity from the border in Mizoram. The project can be completed in three years. While the Centre will fund the project, RITES, a subsidiary of the Indian Railways, will implement it.
The Minister noted that the Sitwe project assumed great significance in the Centre's plan to develop the North-Eastern States, which lacked connectivity in trade. The Myanmar port would provide an alternative route to connect with South-East Asia, without transiting Bangladesh. "It provides a direct link and trade route not just to Myanmar, but also to Thailand and the rest of South-East Asia. It is unfortunate we have not been able to develop our relationship with Bangladesh to the level of making it our gateway to South-East Asia," he explained. Mr. Ramesh said the Centre was constantly working on enhancing ties with Bangladesh.
A few days ago, a notification lifting the ban on Foreign Direct Investment from Bangladesh has been issued. Only Pakistan now figures in this negative list of countries from where the FDI is not allowed. Bangladesh had argued that this ban was unfair, when Indian companies wanted to invest in that country. A mega Tata project to develop steel, power, and fertilizer plants in Bangladesh was pending with that government probably because of this ban order.
Asked about the performance on the export front, the Minister said though it was not possible to achieve the export targets for the current year, exports had not been "devastated, " as feared in some quarters. "Clearly, textiles, leather, and IT were most affected by the rupee appreciation. But IT had other sources of competitive advantage. As a result, textiles and leather bore the brunt of the rupee appreciation. The Finance Minister has come out with three relief packages, but we may have to do something more for these two sectors in particular. They are labour-intensive industries in the manufacturing sector, and without an import component, which could have softened the blow and secured other relief. What they are looking for is access to cheaper credit."
He said the textiles sector had to face competition from countries such as China, which exported goods worth $160 billion in 2006-07 (I¡½(B when the entire Indian exports accounted for just $125 billion.
"So there is a market out there, without the quotas, and the exchange rate should not be a deterrent." Answering a question on the controversy over the SEZs, Mr. Ramesh said: "It has got so skewed. The original purpose of the SEZs, such as over coming regional disparities, securing a better geographical spread of industry, and ensuring a good industry distribution has been defeated. Of the 172 notified SEZs, the five developed States (I¡½(B Andhra Pradesh (48), Tamil Nadu and Maharashtra (24 each), Karnataka (19), and Gujarat (12) have obtained almost 75 per cent. Further, 115 of these SEZs will be for information technology companies, which perhaps want to move over to them to overcome the withdrawal of the STPI concessions from 2009. "It was actually meant for the labour-intensive manufacturing industries, which have not utilised the opportunity. " He expressed the view that the Centre should take on the responsibility of (1) developing at least one SEZ in each State, and (2) creating the infrastructure in less developed States, especially those that do not enjoy the advantages of being on the coast or having better connectivity.
Announcing this here on Monday, Union Minister of State for Commerce Jairam Ramesh said the project had been under discussion for almost six years. "But a paradigm shift in our thinking, thanks to the Prime Minister and External Affairs Minister, resulted in changing it from a Build Operate Transfer (BOT) project into a BTU venture. The Myanmar authorities had serious reservations on a BOT approach and so we switched over to this new concept," Mr. Ramesh said in an interaction with TheHindu journalists. He explained that the project involved three components (I¡½(B rebuilding the port, making the Kaladhan River navigable up to Mizoram and developing highway connectivity from the border in Mizoram. The project can be completed in three years. While the Centre will fund the project, RITES, a subsidiary of the Indian Railways, will implement it.
The Minister noted that the Sitwe project assumed great significance in the Centre's plan to develop the North-Eastern States, which lacked connectivity in trade. The Myanmar port would provide an alternative route to connect with South-East Asia, without transiting Bangladesh. "It provides a direct link and trade route not just to Myanmar, but also to Thailand and the rest of South-East Asia. It is unfortunate we have not been able to develop our relationship with Bangladesh to the level of making it our gateway to South-East Asia," he explained. Mr. Ramesh said the Centre was constantly working on enhancing ties with Bangladesh.
A few days ago, a notification lifting the ban on Foreign Direct Investment from Bangladesh has been issued. Only Pakistan now figures in this negative list of countries from where the FDI is not allowed. Bangladesh had argued that this ban was unfair, when Indian companies wanted to invest in that country. A mega Tata project to develop steel, power, and fertilizer plants in Bangladesh was pending with that government probably because of this ban order.
Asked about the performance on the export front, the Minister said though it was not possible to achieve the export targets for the current year, exports had not been "devastated, " as feared in some quarters. "Clearly, textiles, leather, and IT were most affected by the rupee appreciation. But IT had other sources of competitive advantage. As a result, textiles and leather bore the brunt of the rupee appreciation. The Finance Minister has come out with three relief packages, but we may have to do something more for these two sectors in particular. They are labour-intensive industries in the manufacturing sector, and without an import component, which could have softened the blow and secured other relief. What they are looking for is access to cheaper credit."
He said the textiles sector had to face competition from countries such as China, which exported goods worth $160 billion in 2006-07 (I¡½(B when the entire Indian exports accounted for just $125 billion.
"So there is a market out there, without the quotas, and the exchange rate should not be a deterrent." Answering a question on the controversy over the SEZs, Mr. Ramesh said: "It has got so skewed. The original purpose of the SEZs, such as over coming regional disparities, securing a better geographical spread of industry, and ensuring a good industry distribution has been defeated. Of the 172 notified SEZs, the five developed States (I¡½(B Andhra Pradesh (48), Tamil Nadu and Maharashtra (24 each), Karnataka (19), and Gujarat (12) have obtained almost 75 per cent. Further, 115 of these SEZs will be for information technology companies, which perhaps want to move over to them to overcome the withdrawal of the STPI concessions from 2009. "It was actually meant for the labour-intensive manufacturing industries, which have not utilised the opportunity. " He expressed the view that the Centre should take on the responsibility of (1) developing at least one SEZ in each State, and (2) creating the infrastructure in less developed States, especially those that do not enjoy the advantages of being on the coast or having better connectivity.
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