Building better connections

On Sunday, two newspapers ran reports that have a vital bearing on the geopolitical future of the country. Writing in the Indian Express, Praveen Swami lamented that a game-changer plan to link India with Afghanistan and Central Asia through the eastern Iranian port of Chah Bahar was in danger of being derailed because of New Delhi’s parsimonious attitude in putting up money at the scale that the ambitious schemes require. In the Times of India, Indrani Bagchi reported that India’s “Act East” slogan was being jeopardised by poor project management of its connectivity projects relating to Myanmar. India, she noted, had unilaterally shifted the deadline of completion of its projects from 2016 to 2019.

Railways between Iran and Afghanistan need to be built or upgraded along with better roads so that  the region can play the role as a kind of an Indian Silk Route to Afghanistan and Central Asia via Iran. Representation Pic/Thinkstock
Railways between Iran and Afghanistan need to be built or upgraded along with better roads so that  the region can play the role as a kind of an Indian Silk Route to Afghanistan and Central Asia via Iran. Representation Pic/Thinkstock

For Indian officials, these are really teething problems and New Delhi remains determined to pursue these schemes, if only for the fact that they are vital for India’s emerging geopolitical posture. New Delhi is also aware that should it falter, others, primarily China, are ready to take its place. The idea of developing Chah Bahar has been around ever since India and Iran collaborated in helping the Northern Alliance to take on the Taliban in the late 1990s.

However, the issue has also become entangled with the regional geopolitics as New Delhi has had to move carefully so as not to upset Uncle Sam. The Iranians, too, adept at hardball have sought to tap external investments for their infrastructure and development schemes. Many Indian players had, on the other hand, hoped to tap the Iranian oil riches which were being used by Teheran to subsidise fuel and food for its populace. In 2013, India came up with an offer of $ 100 million for the project, and the Chinese countered with a $75 million credit line to develop the port. This was somewhat strange since China runs the Gwadar port which is 76 kms down the coast, but across the border in Pakistan. Many observers believe that the effort was aimed at undercutting New Delhi.

It was only in October 2014 that New Delhi firmed up its offer and said that it would create a special purpose vehicle to invest $85.2 million to convert the existing berths at the port into a container and a multipurpose terminal. However, the Iranians say that the investments required to exploit the opportunity are much greater, perhaps something up to the tune of $ 500 million and more. This is because there are many vital missing links in the Iranian infrastructure in his region. For example, there is need to link Chah Bahar with Zahedan by a railway line which will then link up to the Iranian national railway system and the northern city of Mehshed. Railways between Iran and Afghanistan need to be built or upgraded along with better roads so that the region can play the role as a kind of an Indian Silk Route to Afghanistan and Central Asia
via Iran.

A major problem in developing connectivity projects has been the lack of higher direction. By virtue of being strategic, these tasks ought to be done in special quick time. But, more often than not, they end up mired in all kinds of problems. At the best of times inter-ministerial and centre-state coordination is poor. The Myanmar projects are led by the Ministry of External Affairs, but there are problems with this model since the Ministry is itself terribly under-manned and its diplomats are not really geared to be project managers.

This is compounded by the lack of specialised construction companies which can be used to run the projects. One would be tempted to call for revitalising companies like the Engineering Projects of India Ltd or the Engineers India Ltd for the job. But if the past is any guide, they end up functioning like typical public sector companies with low levels of efficiency and despatch. However, India does have good private sector engineering companies and the government can create special purpose vehicles by getting into joint ventures with them. As for running the directing the effort, there is no reason why a specialised ministry cannot be created, perhaps as part of the completely restructured MEA. Such imperatives have resulted in Canada’s foreign ministry being called the “Ministry of Foreign Affairs Trade and Development” and the Australian foreign ministry the “Department of Foreign Affairs and Trade.”

To emerge as a powerhouse in its region, India will have to shape its politics as well as its infrastructure. A cursory look at a transportation or communications map will show the advantage that developed countries have in their first mover advantage in creating the world’s infrastructure undersea telegraph and fibre optic cables, pipelines, railroads, airline routes, maritime links all favour them. As a late comer, India needs to put in that extra effort to shape the connectivity paradigm in its neighbourhood. This requires both money and managerial skills. But more important, since the amounts are not significant considering India’s scale, it requires a vision, as well as higher direction.

This is what the Chinese are demonstrating with their Silk Road strategy. Last November, Xi Jinping put down $40 billion for furthering his goals in shaping the future communications and trading links of China with resource rich countries of Africa, as well as the markets of Europe. This is not a challenge where India can afford to fumble and falter.

The writer is a Distinguished Fellow, Observer Research Foundation, New Delhi

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