Why India-Middle East-Europe Corridor Is A Game Changer — Infravisioning With Vinayak Chatterjee

Vinayak Chatterjee: I suspect it is so, because under one umbrella to have an investment of this magnitude is probably right in saying it's the largest infra initiative ever announced by a group of countries together and the exact investment numbers by the way, are still being worked out because these are all estimates right now.

But the routine that is being shared in the public domain is about 8,200 kilometres, which starts from Mumbai port, connects by ship to Dubai. From Dubai Port overland to Israel, Haifa Port in Israel by land, then from Haifa Port to Greece, by ship, from Greece to Hamburg in Germany, by a combination of, I suspect road and rail, because rail and roads already exists in Europe.

Now, this is the alignment proposed to link India to the heart of industrialised Europe and as you know, the acronym given is IMEC, India-Middle East-Europe Corridor. So let me pause here before we move on to other dimensions of this initiative.

Vinayak Chatterjee: Look, I think the trick in the whole thing, if not the quantum of investment which I still have to figure out what it will take for the overland connections, the complete link from Dubai to Haifa Port overland, to Saudi Arabia, etc., and from the port in Greece to Hamburg, that portion I don't think requires great infra because Europe already has great networks of inland waterways, ports and rail—the ports are already in existence.

So, what looks like to be a major investment is what I would look at as the rail link from Dubai to Haifa Port, running across the Arabian Peninsula, right from Dubai, UAE, through Saudi Arabia into Haifa Port. That seems to be the biggest chunk of infra, but the softer aspect is honestly the multi-modalism involved. I think the softer dimensions of being able to transport cargo in a seamless manner with minimum paperwork, minimum customs checks, minimum delays in shifting from one to the other.

To me the softer aspects are more important in terms of each of the countries contributing to getting that process right. The hardware to my mind is easier delivered than the software of traversing almost 15 countries, the link today travels around 15 countries. So, at each point, border checkpoints, trans-shipment, loading, unloading, in fact is to my mind the critical issue but it is being done as best as possible and by the way, there are already critics who are coming out, who are critically examining this whole concept and one of the points that is being mentioned here is that there are too many points of trans-shipment.

For example, a container from Mumbai will get loaded in Mumbai, and unloaded in Dubai from a ship, then loaded onto a rail from Dubai for Haifa Port, will be loaded onto the rail, then from Haifa Port in Israel, to Greece, maybe ship again, then from Greece to Hamburg will be road or rail. So, there are almost five-six points of multi-modalism, of shifting from one mode of transport to the other and the critics are already saying you load a container on a ship in Mumbai and it goes to Hamburg and then it goes to the Suez Canal. So, what's the big deal, we have to address these issues.  

Vinayak Chatterjee: When China announced the Belt and Road Initiative, which I think was earlier called One Belt One Route, then it got changed to BRI-Belt and Road Initiative, it drew gasps from the rest of the world because I think it included the vision of over 100 countries, many of them small, poor, Asian or African continent countries and China wanted to use that to demonstrate two aspects of its increasing global power.

One, its diplomatic power by saying look, we have got excellent contacts. We are dominant in trade, and we are creating a network that the world has not seen in the South-South, the developing world. The second point China was trying to make is that we have the financial capacity to give low-cost debt to many of the countries that do not have the capacity to build these infrastructures, these ports, airports, roads and railways.

So, we are also in some senses a kind of a substitute at a country level for Multilateral Development Banks. So, there's a bundle of very strong messages and a very strong undertone of Chinese domination of the developing world through this initiative. Interestingly enough, while it generated the oohs and aahs, as we see today, it has generated an equal amount of criticism. 

One, that it is a single country initiative as distinct from our initiative IMEC that we are discussing now, it was seen as a single country initiative. It was seen as vastly too ambitious in its scope to be meaningful and three, the large portion of the criticism now is that it was willingly enticing smaller, less developed countries without a strong financial, economic base, an economic base to become beholden to China for funding its infrastructure and in the process getting into debt that they have no great ability to repay. So, you will become indebted nationally to China.

So, all these criticisms have come in and ... the new initiative of IMEC announced at G20 seems to be an very interesting response to that initiative of China's, but we can go on and on and discuss this.

Vinayak Chatterjee: It could be done in three years because honestly, there are no new ports to build. All the ports today are operating ports—Mumbai, Dubai, Haifa and I think the Piraeus port in Greece. They are all operating ports which are trans-shipping cargo or shipping cargo in and out.

So, the real portion is the overland portion, and the bulk of the overland portion is the connectivity by rail or road, and I suspect it is rail from Dubai Port to Haifa Port in Israel. Now, I don't know the exact kilometrage, but if push comes to shove, a track that long can be built in three years.

Vinayak Chatterjee: This is what brings me to a larger issue. You have actually pointed me in a direction which raises some questions that the line as presented in the media, by the G20 secretariat or whoever is presenting this to the media, the line starts from Mumbai and you know, one of the partners and signatories to this arrangement is Japan itself.

So, what I find is that there is a portion of Southeast Asia, South and Southeast Asia that does not seem to be connected with the line as per what has been put out and therefore, I would argue that the line should extend beyond Mumbai, it should connect India's new trans-shipment port Vizhinjam in Kerala. It should certainly join up with Colombo Port. It should tie up with Chittagong Port and take it in its stride a little more eastward push to some of these Southeast Asian countries. As you know, there is also a proposed trans-shipment port that India is proposing in the Andamans and that is expected to be operational by 2028.

So, I would actually start drawing the line from the Andamans, the Indian's proposed trans-shipment port and start drawing the line and encompass Chittagong, Colombo, Vizhinjam in Kerala, Mumbai and make the shipping route a larger play towards South and Southeast Asia. The second point I want to add that this corridor should not only be about movement of physical goods, what we are seeing in the region and is also a movement of energy.

Today, India buys hydropower from Bhutan, and we sell thermal power to Bangladesh. Then, there is a talk of integrating electricity grids and even taking a dedicated line to Sri Lanka. So, while all this talk is happening, I would urge the G20 nations to consider expanding the scope to include electricity transmission also in the region.

But also, very importantly play on renewables because as the sun moves and it is becoming night in places like Thailand, Vietnam, it is burning brightly in Rajasthan. So, there is a play where an entire region can go optimise solar by having an interconnected grid. So, these considerations, since the plan is still being fleshed out, some of these considerations could be considered.

Vinayak Chatterjee: As you know, both the eastern dedicated freight corridor and the western dedicated freight corridor are almost near completion and are ready to start operation by the end of the year or by early next year.

Then, there is a huge move in our national logistics plan to create a huge number of container freight stations and multi-modal logistics parks. So, internally I think our rail networks are pretty good. Internally, we are well geared to, in a sense, link ourselves up domestically with this IMEC initiative.