Improving South Asia's Transport Network to Promote Economic Cooperation

News Release | 21 January 2008

MANILA, PHILIPPINES - Japan and the Asian Development Bank (ADB) are helping prepare an investment project that will ease the flow of goods, services and people across Bangladesh, Bhutan, India and Nepal to promote economic cooperation and integration among the four member-countries of the South Asia Subregional Economic Cooperation (SASEC).

The Japan Special Fund is extending a $1 million grant to draw up the design for the SASEC Transport Logistics and Trade Facilitation Project. ADB will manage the grant.

The technical assistance consists of three components - a road corridor that passes from Kakarvitta in Nepal, through Panitanki-Fulbari in India to Banglabandha in Bangladesh; a rail link from Akhaura in Bangladesh to Agartala in India; and a modernized cross-border regime at key cross-border points.

"The project will work toward improving cross-border transport infrastructure and the introduction of modern cross-border management to facilitate trade and the movement of people across SASEC countries," said Dong-Soo Pyo, Principal Financial Analysis Specialist of ADB's Southeast Asia Department.

The project was borne out of the fifth SASEC transport working group meeting in 2006, and the fourth SASEC country advisors' meeting in 2007, where SASEC members agreed to develop a regional transport and trade facilitation project to improve intraregional transport.

Across the mainland of South Asia, the original transport infrastructure is already in place but has fallen into disuse and needs upgrading in many areas. Apart from the inconvenience to travelers, these barriers have raised the cost of travel and trade.

The SASEC initiative was launched in 2001 with ADB assistance to support and facilitate regional cooperation initiatives in six priority sectors: energy and power; environment; information and communication technology; tourism; trade, investment and private sector cooperation; and transport. It provides a venue for policy dialogue, information sharing and confidence building among participating countries to enable better economic cooperation.