The project cost, however, is expected to be 29 percent higher at 4.5 billion rupees [US$72.8 million] than the initial estimate of 3.5 billion rupees, mainly due to unexpected volatility in exchange rate, according to sources.
The rupee-denominated project signed at a time when the US dollar was fetching 44 rupees and the Myanmar kyat at 900. Since then, both currencies have slipped.
A government official told the newspaper that the port and the river transport facilities will be ready for operations within the extended timeline of May 2015.
The Kaladan Multi-modal Transit Transport Project – part of India’s Myanmar outreach under the country’s Look East Policy - has been slow to make headway, according to analysts. But since Indian Prime Minister Narendra Modi came to power, he has changed the name to “Act East Policy” and spoken of active engagement with his eastern neighbour.
India’s increasing interest in Myanmar comes as China continues to expand its long-standing relationship with the turning on of the tap to a crude oil pipeline from Madae Island to Yunnan province, as well as a proposal for the building of a large oil refinery in the Dawei Special Economic Zone on Myanmar’s east coast, according to a media report.
India is coming relatively late to the game, with China remaining Myanmar’s biggest investment partner.
Any dreams India may have of rapid change, however, will be slow in coming. While the port and the river transport facilities will be ready for operation within the extended timeline of May 2015, India has to wait for years to start transshipment of goods to Mizoram in the North-East, as India’s Ministry of External Affairs is yet to kick off the road transport part of the Kaladan project, according to the newspaper.
Once one of the two most important river ports in Myanmar, Sittwe was used to ferry supplies to the northeast of India during the British Raj. From Sittwe, the cargo was taken by waterway 170 kilometres upstream at Paletwa – where the river encounters rapids – for further travel by head-loads to neighbouring Mizoram. According to a 2008 agreement between the two nations, India’s Ministry of External Affairs proposed to revive this route to establish easy access to northeast India.
Apart from trade and commerce, the project has immense importance in ensuring India’s political and military interests in the region as a counterpoint to China, says the newspaper.