Smoothen regulatory bumps on infrastructure highway: IFC to India

November 26, 2013

TORONTO: The International Finance Corporation, the World Bank’s private sector financing arm that recently concluded its first-ever global issue of rupee-linked bonds, has urged India to simplify its complex regulatory landscape and aggressively tap domestic investors to finance its massive infrastructure building plans instead of relying on foreign capital.

“In India, the most recent (spate of economic tumult) or what I call a ‘mini-crisis’, has triggered some soul searching in the  .. in the government,” said IFC CEO and executive vice president Jin-Yong Cai. “India is trying to do the right thing and build up infrastructure. It is really about how to deal with the complex regulatory framework.”

Jin-Yong, who headed Goldman Sachs’s China business before joining the IFC last year, said there is a lot of interest among global investors about opportunities in India, citing the success of the first tranche of offshore rupee bonds worth $160 million issued by the corporation last week.

“We just launched rupee-linked bonds for investing in India as part of a $1-billion programme, which saw strong subscription interest from investors,” he told an audience of large infrastructure investors and financiers at the national conference on Public Private Partnerships (PPPs) hosted by the Canadian Council for PPPs last week.Warning that the current situation of cheap global capital flows won’t last forever, he said India must develop capital markets and harness local saving for its trillion-dollar infrastructure development agenda “In terms of financing those (infrastructure) transactions, they want to bring in foreign capital. But the best way to mitigate the financial risk more often is to mobilise local capital (which) India has a lot of,” Jin-Yong said. 

While the huge amount of global liquidity and cheap capital flows provided a window of opportunity for countries such as India looking to build infrastructure, the IFC CEO said it could also be great risk – as was evident from the adverse impact on emerging markets in recent months due to speculation about the US Federal Reserve’s tapering strategy.

“When you have cheap capital, you think the good days will continue but it’s a time to put your house in order. If the government doesn’t  do the necessary reforms and develop local capital markets, I’m not too sure over-issuing long-term debt is a good thing, particularly if you over-borrow from foreign currencies,” he said.

Inadequate infrastructure is the main factor that holds back economic development and blunts poverty alleviation efforts in emerging markets such as India, he said. But fears over regulatory risk and political instability keep global investors away from infrastructure projects, Jin-Yong said

“Political leadership is clearly a prerequisite for successful PPPs. This is where institutions like the IFC and World Bank can play a critical role in advising and influencing governments to ensure that an equal system is worked out where investors benefit along with the people,” he said.

India accounted for $4.5 billion of IFC’s committed investment portfolio as of June this year, higher than any other country. In 2013, the corporation invested $1.38 billion in Indian ventures.

“The shortage of capital in developing countries is unimaginable and for them, using PPP is not an option – it’s a must,” he said, explaining why PPPs form part of IFC’s core approach to addressing the global infrastructure deficit.

The IFC has a portfolio of more than 100 infrastructure projects built on a PPP basis in 50 countries, and its equity investments in such projects have delivered over 20% returns in the last 10 years.
“The actual risk may not be as high as perceived, especially if you are involved in critical infrastructure creation,” he said. “The government will worry as one bad experience will mean other investors won’t come there,” he concluded.

(This  was in Toronto at the invitation of the government of Canada)



Zydex Technologies eyes building 20,000 km green roads in India by 2016

November 22, 2013

By PTI |

 The Gujarat-headquartered organisation has patented its nanotechnology which reduces water percolation into roads.

(The Gujarat-headquartered organisation has patented its nanotechnology which reduces water percolation into roads )

 NEW DELHI: Zydex Technologies today said it is eyeing building up to 20,000 km of moisture-resistant green roads in India by 2016 using its nanotechnology, after building such highways in US, Europe and Africa.

“We are looking at building 10-20,000 km of roads using our innovative technique in India in the next three years to provide moisture-resistant and pothole-free roads, which need no maintenance for about 15 years. We have already completed about 500 km of roads here with Border Roads Organisation and other agencies,” Zydex Industries CEO Ajay Ranka told PTI.

The Gujarat-headquartered organisation has patented its nanotechnology which reduces water percolation into roads.

Use of this technology can help the government save Rs 7,200 crore per annum on bitumen only, Ranka earlier told reporters.

 ”Bitumen consumption in India is about 4.5 million tonnes per annum, which costs Rs 18,000 crore, of which 80 per cent is used to resurface roads. Use of Zydex’s technology will not only double the life of roads but cut the cost by Rs 7,200 per year,” Ranka said.

Also, he claimed that using this technology the government can save over Rs 21,000 annually in maintenance of rural roads.

“The annual cost to the country for maintaining rural road assets is Rs 21,700 crore, which could be saved. In view of the cost of water proofing of about Rs 12,000 per lane km for the top layer and side slopes, the rain inflicted damages can be brought down very economically,” he said.

The CEO of the firm said it also plans to increase capacity four-fold to 6,000 tonnes a year at Vadodara plant with an expenditure of Rs 30 crore.

Ranka said the technology is getting wider recognition globally, including in Texas, where he claimed 40 per cent of roads were built using it, but rued that in India procedural delays prevent the country from getting the benefits of this advanced technology.

“We have orders from Canada, US, Germany, Sweden, Nigeria, Mexico, Russia, Turkey, Indonesia, Japan and many other countries which are rapidly using the technology but on home turf we are faced with roadblocks. Set protocols are there in other countries, which we lack here,” he said.

However, the company has built roads using the technology in Leh Laddakh region in collaboration with Border Roads Organisation.

 Besides, in some states it is working under Pradhan Mantri Gram  Sadak Yojana, he added


Connectivity of northeast India with Bangladesh to be developed

November 11, 2013


Agartala, : Surface connectivity between India’s northeast region and Bangladesh would be further developed for the economic development of the region, a union minister said here Sunday.
“Prime Minister Manmohan Singh has recently directed to the concerned ministries to further improve the rail, road, and air connectivity in the northeastern region. The surface connectivity between the region and Bangladesh are being developed,” Oscar Fernandes, Union road transport and highways minister told reporters.
He said: “The central government would accord top priority in developing road, rail and air connectivity in the northeastern region. To strengthen the economy of the northeastern region, improvement of the connectivity within the region and with Bangladesh is very essential.”
Fernandes said that the union commerce ministry would provide funds for the construction of a bridge over the river Feni in southern Tripura’s Sabroom, to get access of the Chittagong international sea port.
The Chittagong port in southeast Bangladesh is just 75 km away from the southern Tripura’s border town Sabroom, 135 km south of Agartala.
The central minister accompanied by senior officials arrived here Sunday and laid the foundation for the double lane of the National Highway 44, the life-line of Tripura’s surface link with the rest of the country.
Responding to the demands of the Tripura government, the minister said that an additional national highway would be developed between Tripura-Assam and rest of the northeastern region. For this, the Tripura government would arrange required lands.
Earlier, the union minister held separate meetings with Tripura Chief Minister Manik Sarkar, Finance Minister Badal Chowdhury, and senior officials of the central and state Public Works Departments. He reviewed the progress of the highway projects in Tripura.

Queensland firm Global Road Technology Australia has landed a $116 million ($US110M) deal to lay its “instant highway” technology on 7,000 kilometres of road in India.

November 8, 2013



The firm, whose biggest projects to date have included infrastructure linked to resource industry development in Queensland, secured the deal with Indian construction and energy giant Triace this week.

It would see the firm’s road stabilisation technology applied on the ground through a joint venture with Indian firm Pearls Group – to be called Pearls GRT.

GRT director Ben Skinner said the technology was expected to create a road network that would transform regional Maharashtra – India’s third largest state.

“Our partnership with Pearls and the signing of the agreement in India demonstrates the demand for our products and their potential to provide infrastructure solutions globally for any number of industries and applications,” Mr Skinner said.

 ”Pearls GRT’s road-building technology has the potential to revolutionise how roads are built and the company is entering an exciting time in its development.”

The technology would allow the construction firm to lay up to 6,000 square metres of road a day compared to traditional methods that could take up to a month per kilometre, he said. That meant rollout time from planning to finished road took a matter of days with GRT technology.

The firm expected to have a team of surveyors, geologists, civil engineers and industry consultants on the ground to assist with the project.

Among the firm’s biggest selling points was the fact that its technology was tested under some of Australia’s harshest conditions – at mining sites where haulage roads must remain open 24 hours a day to boost productivity.

The firm was already working across India, North and South America, he said, in major mining, oil and gas developments, and with government sector.



Good roads make friendly neighbours

November 7, 2013

Global Times |
By Ding Gang

Both China and India have drawn each other’s attention with major moves. India has welcomed a remarkable milestone in the development of its space technology by successfully launching its first Mars orbiter, theMangalyaan.Meanwhile, China extended its highway network to the last untouched county, Motuo, located in southeastern Tibet. The road, which took decades to complete, has provided the once isolated plateau with a gateway to the world.

These two accomplishments are enough to make Indians and Chinese feel proud. However, they seem to have caused mutual suspicion instead, and even been misinterpreted by some netizens as measures against each other.

With rapid development in many areas and in particular defense over the last decade and more, China and India have become more suspicious of each other’s intention, which reflects long-term distrust in their bilateral relationship.

Problems in the Sino-Indian relationship are mainly triggered by boundary demarcation. The foremost way to reduce mutual suspicion is to lay down some basic rules in tackling border issues to control frictions and prevent conflicts.

The Border Defense Cooperation Agreement between India and China signed in Beijing last month marked an important step toward this. If New Delhi and Beijing can strictly abide by the pact and conduct frequent dialogues between officials at different levels near the Line of Actual Control, there will be fewer chances of conflicts.

The two nations can then begin considering how to make substantial progress that promotes business and trade in border areas and benefits the general public.

In recent years, Beijing and New Delhi have been engaged in road projects near border regions, and have also made plans to build railways. Mutual suspicion will increase if the highways and railways cannot be connected between the two countries. But if the two can be connected, the entire region can prosper.

Currently, China and India conduct trade mostly by sea. A large bulk of Tibet’s imports from and exports to India has to pass through the port of Tianjin and then be shipped to the harbors of Calcutta.

If the two countries can connect their highways via Nathu La, a mountain pass in the Himalayas, trading cost will drop enormously. Nathu La is located 460 kilometers from Lhasa, and there are several highways from this historical place to northern India, eastern Nepal and northern Bangladesh.

This trade route boasts great potential. The India-China trade volume in 1957 amounted to a peak of 110 million silver dollars at Nathu La Pass, accounting for more than 80 percent of the total bilateral trading volume.

Another route, which extends about 500 kilometers, could connect Tengchong, Yunnan Province, to Ledo in northeastern India via Myitkyina in Myanmar.

Many businessmen from Myanmar have been transporting Chinese goods to India through this passage over recent years, and there are a variety of Chinese-made products in the markets across India-Myanmar border areas.

Interconnections between western China and northeastern India will not only benefit the two countries, but also be conducive to the establishment of the Bangladesh-China-India-Myanmar Economic Corridor that is now being discussed. Plus, it can help shape a critical economic circle to provide more vigor and dynamism to Asia and the whole world.

In addition, the political role of the new economic zone can not afford to be neglected. As complicated conflicts often occur among a number of ethnic minorities and tribal groups there, it will be difficult to push forward political reconciliation if economic development remains sluggish.

Economic growth is the foundation of addressing these problems, and providing real benefits for the people will facilitate the process of negotiations over the border. Investment and ideas that advance China-India economic and trade cooperation are far more important than building army posts and deploying artillery and planes.

The author is a senior editor with People’s Daily. He is now stationed in Brazil 


GRT bid paves roads to India

November 7, 2013

Jenny Rogers   |

   Global Road Technology’s soil stabilisation and trench compaction products will be  used to build highways in India.   Pic: Supplied

BUNDALL-based infrastructure company Global Road Technology has inked a $115 million road-building deal with Indian construction and energy giant Triace.

The three-year contract will enable the company to put its instant highway technology to work on projects covering 7000km of Maharashtra, India’s most populous and third largest state.

The Triace deal followed the recent signing of a joint venture agreement between GRT and India’s Pearls Group to form Pearls GRT.

Pearls Group is the parent company of Pearls Australasia, which bought the Sheraton Mirage resort for $62.5 million in 2009 and undertook a $26 million makeover.

GRT’s technology director Ben Skinner said the deal was a sign of the Gold Coast-based company’s intent to be a world leader in road infrastructure development.

“Our technology provides a cost-effective and time-efficient solution to the development of road infrastructure in both remote and developing nations,” he said.

He said up to 6000sq m of road would be applied a day using GRT’s products, as opposed to traditional methods that take up to a month to lay a kilometre of road.

GRT uses special compounds to build roads that are stronger, safer, cheaper, longer-lasting and quicker to install than conventional roads.

Their technology makes it possible to quickly seal poor roads in countries such as India and China to reduce fatalities.

GRT already has a presence across Asia, India and South America.

The company is working with major companies across the mining, oil and gas and government sector.

Mr Skinner said GRT polymers could be mixed with in-situ materials to create a range of road surfaces across a variety of landscapes.



China opens new highway near Arunachal Pradesh border

November 1, 2013


Nearly 1 billion Yuan project comes to light after seven failed attempts over the past 50 years


China on Thursday opened a new highway that links what the government has described as Tibet’s “last isolated county” – located near the border with Arunachal Pradesh – with the rest of the country and will now provide all-weather access to the strategically-important region.

Chinese state media have hailed the opening of the highway to Medog – which lies close to the disputed eastern section of the border with India – as a technological breakthrough, with the project finally coming to fruition after seven failed attempts over the past fifty years.

China first started attempting to build the highway to Medog – a landlocked county in Tibet’s Nyingchi prefecture – in the 1960s, according to State media reports, in the aftermath of the 1962 war with India.

With Thursday’s opening of the road, every county in Tibet is now linked through the highway network, underlining the widening infrastructure gulf across the disputed border, even as India belatedly pushes forward an upgrading of border roads in more difficult terrain.

The official Xinhua News Agency on Thursday described Medog as “the last roadless county in China”. Before this week, Medog was the only one of China’s 2,100 counties to remain isolated from the highway network, according to State broadcaster China Central Television (CCTV).

What the project will do

State media reports have focused on the development benefits that the project would bring and have sought to play down the strategic dimensions. Local officials said the road’s opening will bring down commodity prices and widen access to healthcare.

The road will also provide access to the border county for nine months of the year. That the government was willing to spend as much as 950 million Yuan – or $ 155 million – on a 117-km highway, with ostensibly few economic returns expected, has underscored the project’s importance to State planners.

Local officials said prior to the opening of the highway, reaching Medog required traversing the treacherous Galung La and Doxong La mountains at an altitude of 4,000 metres. With frequent landslides, the road was often rendered impassable.

Now, the road will be accessible for “8 to 9 months per year, barring major natural disasters”, Ge Yutao, Communist Party head of the transportation department for the Tibet Autonomous Region (TAR), told Xinhua.

Work on the 117-km road began in 2009, a year after the project was given the green light by the State Council, or Cabinet.

Renewed attention on infrastructure projects

The opening of the road comes at a time when there has been renewed attention on infrastructure projects in border areas in India and China.

Last week, both countries signed a Border Defence Cooperation Agreement (BDCA) during Prime Minister Manmohan Singh’s visit to Beijing, aimed at expanding confidence-building measures. The agreement calls for setting up channels of communication between military commands, increasing the number of border personnel meetings, and formalising rules such as no tailing of patrols, to built trust and avoid incidents.

The agreement does not specify or limit either country’s plans to boost infrastructure – an issue that, analysts say, has in the past triggered tensions along the disputed Line of Actual Control (LAC), most notably in April when a Chinese incursion sparked a three-week-long stand-off in Depsang, Ladakh.

Han Hua, a South Asia scholar at Peking University, suggested in a recent interview that the “basic reason” for the incident was “too much construction” along the border. The Chinese side, she acknowledged, did not have to build closer to the disputed LAC because their infrastructure, as well as more favourable terrain enabled quicker mobilisation.

“If we don’t have the overall collaboration of the military, policy-makers and decision-makers on both sides,” she said, “it will be difficult to avoid such incidents”.

‘India’s plans will not be limited’

The BDCA, Indian officials said, will not limit India’s plans to upgrade infrastructure. It recognises the principle of equal and mutual security, which allows either side to pursue its security in its own way. At the same time, officials say the BDCA will still help “regulate activity” along the border by opening up new channels of communication, even as the border continues to remain a matter of dispute.

On Thursday, Chinese Defence Ministry spokesperson Yang Yujun told a regular press conference that military personnel would hold “regular meetings” and “make joint efforts” to maintain peace in border areas, following the signing of the BDCA. The agreement, he said according to a Xinhua report, “summarised good practices and experiences on the management of differences in China-India border areas”.


Old roads, new highways

October 25, 2013

(AP Other way round: From the Indian point of view, opening more routes is important as it will help create a stronger political consensus for better ties. At the Integrated Check Post at Attari near Amritsar, a line of Pakistani trucks).


India and Pakistan must use the strong peace sentiment on both sides of the border to develop better trade ties


What war could ravish, commercecould bestowAnd he returned a friend, whocame a foe       -Alexander Pope


The India-Pakistan relationship is a complex one, dominated by excessively polarised discourse. Over the past decade or so, one point has become evident. First, strong constituencies for peace between both countries have emerged along the border regions, be they Rajasthan-Sind or the two Punjabs. The enthusiasm with which people responded to Confidence Building Measures (CBMs), such as the Munabao-Khokhrapar train service and bus services connecting Delhi and Lahore and Amritsar-Lahore, are a reiteration of this point. It is a different matter, of course, that logistics issues have prevented both these initiatives from being a success.While in the case of the Punjab, opening up trade at the Wagah-Attari route and setting up the Integrated Check Post have got businessmen on both sides of the Radcliffe Line interested, some logistics issues persist. There is also a desire to open the Hussainiwala (Ferozepur)-Ganda Singh route, which was active before the 1971 war. This will be relevant especially in the context of the potential for petroleum trade between both countries, since the Bhatinda oil refinery, inaugurated in April 2012 by the Indian Prime Minister, is only 100 km from Hussainiwala. With the politics of Punjab being dominated by the Malwa belt, and the current Deputy Chief Minister, Sukhbir Singh Badal, being an MLA from Ferozepur, support for opening up this route is only likely to increase. The leather industry, which contributes 5.4 per cent of overall export earnings, will also benefit from the same trade route as Kasur city, adjacent to Ganda Singh and 60 km from Lahore, is a hub of tanneries in Punjab.Makes business, political sense

In Rajasthan-Sind, while the train service is chugging along, trade through the Munabao-Khokhrapar route is yet to open, though there is strong support for it. This route too could come in handy for petroleum trade, since gas has been discovered at Barmer.

Opening up these two borders would make sense from the business point of view, and come in handy politically for a number of reasons. North India will benefit more through land trade vis-à-vis Pakistan.

Currently, trade is only allowed through the Wagah-Attari land route; other road links are ignored. Barki road connecting Lahore-Patti, the Kasur-Firozpur roads at the Ganda Singh border, the Sahiwal/Pakpattan road link with Fazlika, Head Sulemanki and Multan borders, have the potential to enhance Punjab-to-Punjab trade manifold.

In the Pakistan context, Ganda Singh strengthens the pro-trade constituency in Punjab. In fact recently a delegation from Indian Punjab met Prime Minister Nawaz Sharif, who was enthusiastic about the idea. Apart from this, opening up the Raj-Sind border would assuage feelings in Sind, especially for those who believe Punjab will benefit from India-Pakistan trade while other States will be left behind.

If one were to look from the Indian side, opening more routes is important since this will help create a stronger political consensus for better ties. While Punjab is already ruled by the Shiromani Akali Dal, an ally of the Bharatiya Janata Party (BJP), Rajasthan too could get a BJP government in the aftermath of the December Assembly elections. In addition to this, by opening up the Rajasthan-Sind border, businessmen from neighbouring States such as Madhya Pradesh and Gujarat which are BJP-dominated would also benefit. Currently, traders from Madhya Pradesh have to go all the way to the Wagah route.

Existing as well as new markets have the potential to achieve the highest targets. The existing market, worth $13 billion, comprises smuggling and personal baggage. Therefore, the legalisation of trade would help the government of Pakistan earn revenue in the form of import duties. The key to the economic success of a country is promoting regional trade. However, Pakistan’s regional trade is less than five per cent of the total. Millions of dollars can be earned if more trade routes are opened.

Land over sea

A study carried out in 2006 estimated that over 80 per cent of firms are forced to trade through the Karachi-Mumbai sea route, even if they are located in the border station of Amritsar. Similarly, the Sind-Rajasthan border can connect Rajasthan and Gujarat with Sind, which has huge potential to enhance trade between both countries by the land route. The Munabao-Khokhrapar rail route can lessen the burden on the Karachi-Mumbai sea route, which is the most common, formal trade route between India and Pakistan. It will also save time and money as the sea route requires cargo ships to touch a third-country port before bringing in goods.

The Pakistan Army, being a strong and influential stakeholder, can be brought into the loop as it has a vested interest in the economic structure. This way, India-Pakistan business and people-to-people contact may be enhanced, and stringent visa policies may get relaxed.

(Tridivesh Singh Maini is a New Delhi-based columnist, and Usman Shahid, a Lahore-based journalist and researcher.  )



MOU signed between India and China on cooperation in roads and road transportation

October 24, 2013

MOU signed between India and China on cooperation in roads and road transportation





Bejing: The Ministry of Road Transport and Highways of the Republic of India and the Ministry of Transport of the People’s Republic of China, herein after referred to as the ‘Participants’,


Recognizing the significant mutual benefit that can be derived by the Participants from cooperation on roads and road transportation matters;


Recognizing the common objective of developing and promoting safe, efficient, cost effective and sustainable road transportation systems;


Recognizing the importance of roads and road transportation in the economic development process of each Participant country, within their respective national policy framework;


Have reached the following understanding:
Article 1
Principles and Objectives of Cooperation
1. Under the framework of this Memorandum of Understanding (‘Memorandum’), the Participants will undertake cooperation on the basis of equality, reciprocity and mutual benefit.
2. The purpose of this Memorandum is to establish a long-term and effective relationship of communication and cooperation in Roads and Road Transportation.


Article 2
For the purpose of this Memorandum,
a. ‘Road ‘ means the National Highways of the respective countries.
b. ‘Road Transportation’ means transportation of both passengers and goods by road but excludes urban transport.


Article 3
Areas of Cooperation
The Participants will cooperate in the fields of roads and road transportation in the following areas:
a. Exchange and sharing of knowledge and cooperation in the areas of transportation technology, transport policy, for passenger and freight movement by roads;
b. Planning, administration and management of road infrastructure, technology and standards for roads/highways construction and maintenance;
c. Sharing of information and best practices for developing road safety plans and road safety intervention strategies, and outreach activities aimed at reducing deaths and injuries resulting from road accidents, through:
(i) Exchange and sharing of knowledge in Intelligent Transport System;
(ii) Sharing of information and best practices on increasing vehicle safety oversight, and safety fitness framework for the vehicle testing and certification system;
d. Sharing of knowledge and best practices in user fee (toll) related issues; including the modern system, technologies and methods of levying of user fee and collection including Electronic Toll Collection System;
e. Sharing of information in areas of improved technologies and materials in road and bridge construction, including joint research;
f. Sharing the experience on contractual frameworks, financing and procurement issues, particularly related to Public Private Partnerships (PPP) mode;
g. Any other area of bi-lateral cooperation, mutually agreed by the Participants.


Article 4
Ways of cooperation
1. The cooperation under this Memorandum will be carried out through the following ways:
a. Consultations at expert level about specific cooperation issues upon the requests of the Participants;
b. Organizing exchange visits for technical experts;
c. Organizing technical exchanges by way of joint organization of workshops/ seminars/conferences, etc;
d. Exchange of relevant technical materials in accordance with the provisions of the respective laws and regulations and information of policies, laws and regulations;
e. Mutual provision of information relating to transport infrastructure construction projects in their own country;
f. To undertake relevant scientific and technical research in the institutes from both countries including joint research in the identified areas of cooperation.
g. Any other method of cooperation as mutually agreed upon.
2. Whenever necessary, the Participants will discuss and jointly determine the detailed arrangement of the cooperation activities specified in Paragraph 1 of this Article.


Article 5
1. Coordination Organizations:
International Cooperation Wing of the Ministry of Road Transport and Highways of the Republic of India and Department of International Cooperation of the Ministry of Transport of the People’s Republic of China will carry out the coordination of activities under this Memorandum;
2. Implementation Mechanism:
a. The Participants agree to constitute a Joint Working Group (JWG) to oversee the implementation of this Memorandum and to identify specific cooperation activities and services under this Memorandum.
b. The JWG will deal with all questions related to the implementation of this Memorandum and resolve the difficulties that might arise in the course of implementation of this Memorandum.
c. The members of this JWG will be nominated by the Participants. The JWG will meet, as per mutual agreement, alternately in China and in India.
d. Where possible and appropriate, the Participants will facilitate the involvement of other institutions and organizations in the cooperation activities under this Memorandum, both in the government and private sectors.


Article 6
The Participants agreed that each government shall bear its own administrative costs for the implementation of this Memorandum. Specific financial procedures will be negotiated for certain cooperation activities as needed. Any contract or separate detailed arrangements for such activities will be jointly determined by the Participants.


Article 7
1. The Participants agreed that prior approval shall be sought of the other participant before the use of any publicity or presentational material by any of the Participants and executive agencies as are allowed to participate under Article 4 of this Memorandum.
2. Scientific and Technical information of a non-proprietary nature derived from the cooperative activities conducted under this Memorandum may be made available to the public through customary channels and, in accordance with, the normal procedures of the Participants, and other governmental entities involved in the cooperative activities.


Article 8
Information and documentation received by either of the Participants as a result of cooperation under this Memorandum within their respective regulatory and legislative framework will not be given to a third party without the prior written consent of the originator. The Participants accept that either Participant may be subject to legal obligations concerning the disclosure of information relating to this Memorandum within their respective regulatory and legislative framework but will nonetheless ensure the other Participant is informed prior to any disclosure subject to the provisions for ‘Confidentiality’ under this Memorandum, wherever applicable.


Article 9
Any dispute about the interpretation or application of this Memorandum will be resolved by consultations between the Participants, and will not be referred to any national or international tribunal or third party for settlement. If the Participants are unable to resolve the dispute, either Participant may terminate this Memorandum in accordance with Article 11 or such shorter period as may be decided between the Participants.


Article 10
Nature of the Memorandum
1. This Memorandum is not legally binding on either of the Participants.
2. This Memorandum will not generate any public/international law obligations for the Participants.
3. All activities developed under this Memorandum are subject to existing laws and regulations of the respective country of the Participants, and to the availability of necessary funds and resources.


Article 11
Entry into Force, Validity, Termination, Interpretation and Amendment
The Participants agree to the following provisions:


1. Entry into Force : 
This Memorandum shall enter into force on the date of its signature and will remain valid for a period of five years and shall be extended by another five years, upon their mutual written consent, at least six(6) months before expiry of the validity of this Memorandum.


2. Amendment to the Memorandum: 
This Memorandum may be amended by mutual written consent of the Participants. Any amendments thereto shall enter into force on the date of signing of such consent.


3. Termination Provision: 
a. The Memorandum may be terminated by either of the Participants at any time by giving sixty (60) days advance written notice to the other Participant.
b. Unless otherwise agreed in written form, the termination of this MOU shall not affect the validity of any ongoing project or activity implemented in accordance with this Memorandum.
c. The Participants will determine how the outstanding matters should be dealt with on the basis of mutual consultation.



‘Southern silk road’ linking China and India seen as key to boosting ties

October 23, 2013

Ancient trade route between India and China seen offering huge economic potential but New Delhi worries over security implications

Debasish Roy Chowdhury in New Delhi 
Illustration: Adolfo Arranz

An ancient trade route where old suspicions intersect opportunities for trade and exchange between Asia’s two giants will be in focus during Indian Prime Minister Manmohan Singh’s Beijing trip, with China wanting India to fast-track an ambitious regional project.

Beijing is keen to develop a Bangladesh-China-India-Myanmar (BCIM) economic corridor along the “southern silk route” that extends from Yunnan to India. The route, dating back to second century BC, would shorten travel time, cut transport costs, provide landlocked Yunnan province with access to the Bay of Bengal, open up markets and create production bases along the way.

The plan for the BCIM corridor is also at the centre of Premier Li Keqiang’s offer of a “handshake across the Himalayas”. It was during Li’s visit to India this year that the corridor first found mention in official statements, even though it was mooted more than a decade ago.

India, on the other hand, is fearful of the security implications of allowing China direct access to its border states and being overrun by China’s more developed economy. But several Indian experts see in the BCIM plan the promise of economic salvation for the country’s impoverished northeastern states and are urging the government to seize the opportunity.

“As Yunnan is the most advanced in the cluster, India fears that it will become BCIM’s economic centre, with the rest of the region reduced to its periphery,” says Binoda Kumar Mishra, the director of India’s Centre for Studies in International Relations and Development.

Mishra is also the secretary-general of the Kolkata to Kunming (K2K) Forum, one of the organisations behind the first K2K car rally, which crossed the route that makes up the heart of the proposed BCIM corridor.

Land connections – through the central Asian silk route and the Yunnan-India southern silk route – were what drove trade between ancient India and China. In second century BC, Zhang Qian, a Han-dynasty envoy to central Asia, reported that goods from Sichuan and other southwestern regions of the empire were reaching Bactria (present-day Afghanistan) through India. By the seventh century, the route had become a bustling channel for trade and migration.

According to Tansen Sen, the author of Buddhism, Diplomacy, and Trade: The Realignment of Sino-Indian Relations, there was robust activity along the route during the first half of the 20th century. “Chinese merchants dealing in tea and horses connected southwestern China, Tibet, east and northeast India,” Sen says.

During the second world war, the land route was re-established from Kunming to Ledo in India’s Assam state through the Stilwell Road to support Chinese and allied soldiers fighting the Japanese. It is the shortest land route between northeast India and southwest China.

China was keen to reopen that road, but as the Indian Army was wary it might give China a tactical advantage in case of conflict, China has turned its attention to an alternative – a longer route that runs from Kunming to Imphal in northeast India through Ruili in Yunnan and Mandalay in Myanmar. But even that has failed to allay the fears of Indian strategic analysts, who point to China’s involvement with rebel groups in India’s northeast in the past.

“A BCIM road would give China an opportunity to influence insurgencies in the region. China did this until 1986,” says R. Hariharan, a retired colonel at the Chennai Centre for China Studies, even as he acknowledges the corridor’s economic potential.

Merchants dealing in tea and horses linked China and India

The idea of BCIM is to first put in place a highway system along the land route and then turn it into an economic corridor with trading entrepots, tourism infrastructure and manufacturing hubs, possibly hosting production lines displaced from China and creating jobs along the corridor. But the sheer logistics of the 1.65 million square kilometre corridor, encompassing an estimated 440 million people, worry Ravi Bhoothalingam, who is on the Indian government’s panel on BCIM.

“The area is huge, ecologically complex, ethnically diverse and needs the co-operation of multiple administrations,” he says. “All these issues need to be studied.”

To some, like Subir Bhaumik, the author of Troubled Periphery: Crisis of India’s Northeast, that sounds like foot-dragging and “classic Indian insecurity”. Bhaumik, who says a strong defence and commerce ministry lobby in India is blocking BCIM, turns the logic of security concerns on its head.

“The corridor would give China a stake in the Indian economy and hence give it more incentive to maintain peace on the border,” he argues.

India must move on and open up these trade routes, says Sen, who sees in BCIM a chance to revive the commercial bustle of yore.

This article appeared in the South China Morning Post print edition as Bumps on the Silk Road

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