Bangladesh, India, Nepal move ahead on motor vehicle agreement project

Bhutanese parliament has decided not to endorse the plan over sustainability and environmental concerns

March 09, 2022 04:17 am | Updated 04:17 am IST - NEW DELHI

An aerial view of the Thimphu Dzong, which houses the Parliament of the Royal Government of Bhutan. File

An aerial view of the Thimphu Dzong, which houses the Parliament of the Royal Government of Bhutan. File | Photo Credit: SUSHANTA PATRONOBISH

With Bhutan continuing to sit out the Motor Vehicles Agreement (MVA) of the sub-regional Bangladesh-Bhutan-India-Nepal (BBIN) grouping, a meeting of the other three countries was held to discuss the next steps in operationalising the agreement for the free flow of good and people between them.

Meanwhile, Prime Minister Narendra Modi is expected to travel to Colombo at the end of March to attend the summit of another sub-regional grouping, BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation), which includes Bangladesh, Nepal and Bhutan as well.

The BBIN meeting was the first such in-person meeting since February 2020 to discuss the MVA since the COVID-19 pandemic outbreak, and officials finalised the wording of two separate protocols on passenger and cargo movement with an “enabling” agreement. 

“During the meeting, an enabling MOU to be signed by India, Bangladesh and Nepal for implementation of the BBIN MVA by the three countries, pending ratification of the MVA by Bhutan, was finalised,” the Ministry of External Affairs statement said. 

“Operationalising the MVA by concluding the Passenger and the Cargo Protocol will help realise the full potential of trade and people to people connectivity between the BBIN countries by fostering greater sub-regional cooperation,” it added.

Bhutan’s position

According to the MEA statement, Bhutan sent an “observer team” led by an Embassy official to the two-day meeting held on March 7-8 in Delhi, while delegations of Bangladesh, India and Nepal were led by Director General or Joint Secretary level officers. 

The original BBIN MVA was signed by all four countries in June 2015, but after objections in Bhutan over sustainability and environmental concerns, the Bhutanese parliament decided not to endorse the plan, and former Prime Minister Tobgay Tshering’s government agreed to allow the other three countries to go ahead with the project for vehicular movement (BIN-MVA) in 2017. In 2020, Prime Minister Lotay Tshering told The Hindu in an interview that given Bhutan’s “current infrastructure” and top priority to remaining a “carbon-negative” country, it would not be possible to consider joining the MVA. 

India hopeful

Officials said that while India remained “hopeful” that Bhutan could change its position on the project, it was decided at a meeting in November 2021 to go ahead for now, given that there are no new signals from Thimphu on the project.

Progress on the seven-year-old project has been slow, nonetheless, despite several trial runs being held along the Bangladesh-India-Nepal road route for passenger buses and cargo trucks. According to the officials, there are still some agreements holding up the final protocols, including issues like insurance and bank guarantees, and the size and frequency of freight carriers into each country, which they hope to finalise this year before operationalising bus and truck movements between them.

With work on the BIN-MVA now picking up momentum, development banks have also begun to look at the project more closely.

While the Asian Development Bank has supported the project as part of its South Asian Subregional Economic Cooperation programme, and has been requested to prioritise about 30 road projects worth billions of dollars, the World Bank that has estimated that the implementation of the MVA will potentially see increase in traffic-regional trade within South Asia by nearly 60%, has also announced its interest in supporting infrastructure.

In February 2022, the World Bank South Asia programme for BBIN listed projects worth $750 million, for which loans were in “the pipeline”. They included upgrading border checkposts and land ports in Bangladesh with a view to upgrading both physical and commercial infrastructure.

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