Multi Modal Connectivity in the BBIN Region: Key Challenges and Way Forward

Arnab Ganguly

Post On > Aug 30 2021

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Multimodal Transport is the combination of different means of transport, in order to facilitate faster and more efficient cargo movement.

A multimodal transport system becomes especially relevant for the countries in the BBIN subregion comprising of Bangladesh, Bhutan, India, and Nepal. These countries present a combination of geographical diversity wherein Nepal and Bhutan are land locked and depend on India and Bangladesh for access to riverine and sea ports.

With overdependence on roadways, countries in the BBIN are faced with issues like congestion, and lack of availability of good quality roads.

While the countries in the BBIN region are undertaking initiatives to strengthen multi-modal connectivity, it is important to understand two most critical challenges that have huge significancet and how multi-modal connectivity could provide a viable solution.

One of the biggest bottlenecks is the non-recognition of transit rights leading to transhipment delays at border crossings.

While India and Bangladesh have agreed on the Protocol on Inland Water Transit and Trade (PIWTT), other Ccountries in the BBIN region are still negotiating the Standard ofOperating Procedures (SoP) for implementation of the Motor Vehicles Agreement., while India and Bangladesh have agreed on the Protocol on Inland Waterway Transit and Trade (PIWTT).Trade between India and Bangladesh is already happening through the mutually agreed routesd. Significant time and cost of doing cross border trade could be reduced, if exporters / importers starts trading through the designated inland waterway routes instead of adhering to the existing roadways route via Petrapole-Benapole and/or Changrabandha-Burimari.

One can argue that multi-modal routes would lead to more number of transhipments and hence would add to trade costs. In this regard, one needs to compare the detention costs, and inventory costs associated with cargo transportation via roadways vis-à-vis multi-modal route. A recent study by CUTS International have found that the cost of cargo transportation via the multi-modal route is less compared to that of roadways, when one considers the total overall detention and inventory costs.

Predominance of At-the-Border clearance

Trade in the BBIN region is paper heavy and much of the customs and other related clearances take place at-the-borders. This is one of the reasons for congestion at border crossings. For example, at the Petrapole-Benapole border, roughly 2,000 trucks arrive each day, while not more than 300-400 trucks could cross over to Bangladesh. To overcome this challenge, there is a need to promote off-border clearances by use of Inland Container Depots (ICD).

However, this is easier said than done because of thefollowing challenges -

The ICDs are relevant for containerised traffic only, and at an aggregate level the volume of containerised traffic is significantly low.
Additionally, there are vested interest groups at local level that discourage movement of containers. For example, at Petrapole (or so to say any busy land ports), a parallel economy exists, that thrives on detention of trucks at the border crossings. In the post-Covid scenario, containers were made to stand in the same que with trucks. The result has been a complete apathy among exporters/importers towards sending containerised cargo via the Petrapole-Benapole border.
The trucking sector in the BBIN region is dominated by small truck owners having open body trucks making off border clearance completely redundant for them. On top of it, these small players often lack the required financial resources to switch to closed body trucks, let alone adopting trailers. In recent years, some of the transporters have converted the open body trucks to closed body trucks, but ICDs typically do not cater to even the closed body trucks.

Therefore, putting in place a fully operational multi-modal transportation regime would require the following interventions:

Regional multi-modal transport plan

Countries in the BBIN region are working on putting in place a mechanism to facilitate multi-modal connectivity. For example, the multi-modal logistics policy for India is currently awaiting its approval by the Parliament, Bangladesh hasve a policy that was enacted in 2013, while Bhutan and Nepal also have similar policies. However, these policies should be in sync with one another so as to help create a facilitating eco-system where a multi-modal transport system could encourage trade and connectivity to thrive in a sustainable manner.

Adoption of customs conventions

Effectiveness of a multi-modal connectivity for reducing time and cost of doing trade is often questioned on the grounds of multiple handling of cargo, and involvement of increased paper works at each cargo handling point. Use of customs conventions like TIR and/or ATA could be useful in this regard, where all paper works are done at one point and rest of the processes only requires use of carnets.

Predictability in cargo transportation

Predictability in cargo transportation is of utmost importance to exporters/importers when it comes to choosing transport modes. According to exporters/importers roadways provide the most predictable mode compared to railways/inland waterways. In this regard, it is imperative to instil a sense of confidence among the exporters/importers that multi-modal systems are also (if not more) dependable that roadways. This in turn could be facilitated by increasing the number of pilot voyages followed putting in place scheduled services. Use of customs conventions also takes care of cargo insurance, which adds an additional advantage.

Creating stakeholder buy-in

The biggest challenge in the BBIN region is Trust deficit among various category of stakeholders.

For example, one of the reason why the BBIN – MVA is hitting a roadblock is because the transport operators in Bangladesh, and Nepal believe that once the BBIN-MVA comes in force, then their business will be adversely affected and India will get major share of the pie.

These narratives are very ingrained and have strong influence at the policy making forums. In this regard, there is a need for generating awareness among various stakeholders on how they will be benefitted by increased trade and connectivity at the regional level by facilitating multi-modal connectivity.

**Arnab Ganguly is Policy Analyst at CUTS International**

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