India’s Kaladan Project in Myanmar Faces Fresh Hurdles 

By Rajeev Bhattacharyya 15 June 2022

New Delhi’s ambitious Kaladan project in Myanmar, aimed at providing an alternate outlet to India’s landlocked northeastern region, continues to suffer from glitches.  

The latest development that could further delay the project is the Indian government’s termination of its contract with a joint venture of Engineers Projects India Limited (EPIL) and C & C Construction Co. Ltd., which was tasked to execute the road component in Myanmar.     

The Indian Ministry of External Affairs has confirmed the development in response to an application filed under the Right to Information Act (RTI), but did not mention the reason that prompted the government to arrive at the decision.   

While EPIL is a firm under the Indian government, C & C Construction operates out of its office at Gurgaon near New Delhi. An official pinned the blame on the “uncertain situation in Myanmar” that might have created a situation prompting the government to terminate the contract with the twin firms.  

In 2019, 10 people including four Indians and a Myanmar lawmaker were abducted by the Arakan Army from two boats while traveling from Paletwa to Kyauktaw. Two among the Indian abductees were employees of EPIL.  

It is not known if the government plans to ink an agreement with a new firm or firms for completion of the 109-km road component of the project connecting the river terminal in Chin State’s Paletwa to Zorinpui in India’s Mizoram on the border with Myanmar. According to media reports, the consultant for the road component—Ircon Infrastructure & Services Limited (IRCONISL)—has been permitted to engage local contractors for completion of the project.  

The other components of the project have already been completed in Myanmar, including the construction of the Sittwe Port on the Kaladan River mouth in Rakhine State, a river terminal at Paletwa and dredging of the Kaladan River.

India and Myanmar entered into a framework agreement in 2008 for the project aimed at creating a multi-modal transport route for shipment of cargo from the eastern ports of India to Myanmar as well as to the northeastern region of India through Mizoram. It will link Kolkata with Sittwe port in Myanmar’s Rakhine State over the Bay of Bengal spanning over 500 km.

Since the project is of political and strategic significance, it was decided to execute it through India’s grant assistance to Myanmar. In 2015 the Indian government gave its approval for the revised cost estimate of approximately 29 billion rupees (US$371.5 million or about 688 billion kyats) for the project.  

Several deadlines have been missed since the execution of the project commenced in 2010. The next deadline is 2023 but completing the project in the existing circumstances appears to be difficult.  

In Mizoram, the delay has been caused by a demand for compensation by landlords who claim the highway passes over their lands.  Many among them have been paid by the government but there are more awaiting compensation. The controversy is over a plot of 40 acres (about 16 hectares) in the village of Zochachhuah near the border in Lawngtlai. 

“The process of paying compensation to the landlords is still on and we hope to complete everything within two months,” said Lawngtlai deputy commissioner Amol Srivastava.  

Once completed, the 87-km highway between Zorinpui on the border and the district headquarters of Lawngtlai would certainly be one of the best in India’s northeast. However, the highway beyond Lawngtlai (National Highway 54) is narrow and would be unable to handle a large volume of traffic if trade picks up with Myanmar.  

It might take a long time to implement the plan to widen the highway as far as Silchar in Assam, which is the starting point of the East-West Corridor.   

At a recent conclave in Guwahati, Indian External Affairs Minister S. Jaishankar announced that New Delhi was determined to complete the Kaladan project. It is learnt that a slew of meetings have been convened between the Indian Embassy in Myanmar and the junta since the coup last year.    Subsequently, it was decided to engage local contractors for the construction of the road from Paletwa to Zorinpui on the border.  

Rajeev Bhattacharyya is a senior journalist in Assam, India.