Challenges Await New Contractor as India Rejigs Plan for Completion of Kaladan Project in Myanmar

By Rajeev Bhattacharyya 13 October 2022

The Indian government has fine-tuned plans to complete the delayed Kaladan Multi Modal Transit Transport Project in Myanmar, considered crucial for New Delhi’s ambitious Act East Policy.

A corpus of 17.8 billion rupees (US$216.32 million) has been earmarked for completion of the stalled project in Myanmar’s troubled Chin State contiguous to the Indian border state of Mizoram. The estimated cost will be adjusted owing to fluctuations or change in the availability of essential commodities required for the project.

The part that has remained incomplete in the project is a two-lane highway measuring 109 km from Paletwa in Chin State to Zorinpui at the border of the two countries, which passes through rugged terrain and a conflict zone.

The other components of the project have 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.

The details of the plan to construct the highway have been mentioned in the new agreement inked by the Indian Ministry of External Affairs with IRCON International Limited as the project implementing agency (PIA). IRCON is a government firm under the Indian Ministry of Railways with experience of implementing projects in foreign countries.

According to the 32-page agreement, which was made available to The Irrawaddy, the highway will be constructed by local sub-contractors to be decided by IRCON and completed within 40 months.  Another clause allows relaxation of the deadline due to reasons beyond the control of the implementing agency such as “war, riots, civil disorder, earthquake, fire, explosion, storm, flood, pandemic or other adverse weather conditions, strikes, lockouts or other industrial action…”

Early this year, the Indian government terminated the contract with a joint venture of Engineers Projects India Limited (EPIL) and C & C Construction Co. Ltd, which was tasked to construct the highway in Myanmar.

The new agreement stipulates that the PIA “shall acquire a basic knowhow of the relevant local customs of the country in which the project is to be implemented and whenever required, the client (ministry of external affairs) shall advise the PIA in writing of relevant local customs and the PIA shall, after such notifications, respect such customs.”

Further, the agreement says that IRCON will “liaise” with local bodies and obtain their approvals for the work and for relocating existing utilities as deemed necessary. The firm will deploy “adequately experienced and suitably qualified personnel” at the site for execution of the project.

The Indian government’s cautious approach can be understood against the backdrop of the harrowing experiences of the Indian employees who were earlier engaged with the project in Myanmar.  In 2019, 10 people including four Indians and a Myanmar lawmaker were abducted by the Arakan Army from two boats between Paletwa and Kyauktaw. Two among the Indian abductees were employees of EPIL.

A government official said that there was a “better chance” of the project being expedited with the engagement of local sub-contractors. “There were reports that a section of the local populace was unhappy with the proposed highway in Myanmar.  The chances of interference by armed groups could be reduced if local groups and businessmen are associated,” he said.

The two-lane highway has two sections—a stretch of 67 km from Paletwa to Kaletwa and another of 41.5 km from Kaletwa to Zorinpui. Whatever work was done earlier by the previous firms will be “reassessed” and the highway reconstructed at all the stretches where it was completed. The agreement points out that repairs are needed owing to the damaged condition of the highway due to rains and lack of drainage.

Environmental clearance is not applicable in the project as the agreement states. IRCON will plant 17,000 trees as “compensatory afforestation”, similar to the number of trees that would be chopped down for the project. “Around 9,000 trees having varieties of mango, jack fruit and teak are falling in the alignment. Any variation in numbers of existing trees shall not be considered as a change in scope,” it states

The Indian government’s plan to expedite the Kaladan project coincides with the eruption of conflict in Chin and Rakhine states between the junta and the Arakan Army. Some places like Paletwa have been adversely impacted and around 600 residents from these areas have fled their villages and relocated to Mizoram.

It is not known if IRCON has been successful in identifying local sub-contractors for the highway. The firm was unable to disclose information on sub-contractors after an application under the Right to Information Act was submitted by this correspondent.

Several deadlines have been missed since the execution of the project commenced 12 years ago. The next deadline is 2023 but completing the highway in the existing circumstances could be extremely challenging for the implementing agency.

Rajeev Bhattacharyya is a senior journalist in Assam, India.