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The Kaladan Transport Project Amidst the Civil War in Myanmar

Om Prakash Das
Mr Om Prakash Das is Research Fellow at the Manohar Parrikar Institute for Defence Studies and Analyses, New Delhi. Click here for detailed profile.

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    Om Prakash Das
    July 22, 2024

    On 2 April 2008, India and Myanmar signed a Framework Agreement to construct and operate a Multi-Modal Transit Transport facility on the Kaladan River, connecting Sittwe Port in Myanmar with Mizoram in India. The project's primary objective was to enhance bilateral relations and economic cooperation through improved transportation infrastructure.1 In October 2015, the Indian government approved a Revised Cost Estimate (RCE) of Rs 2904.04 crores for the project.2

    The Kaladan project integrates multiple transportation modes, including a 539 km shipping route from Kolkata to Sittwe Port in Myanmar, facilitating maritime transport; a 158 km inland water transport (IWT) route from Sittwe to Paletwa along the Kaladan River; a 110 km road connecting Paletwa to the Indo-Myanmar border; and finally, a 100 km road link from the border to NH-54 at Lawngtlai in India.3

    Figure 1. Kaladan project transportation modes

    Source: “Shri Sarbananda Sonowal to receive the First Indian Cargo Ship docking at the Sittwe Port on May 9, 2023”, Press Information Bureau, Ministry of Ports, Shipping and Waterways, Government of India, 5 May 2023.

    Before the formal Framework Agreement between the two countries, Detailed Project Reports (DPRs) were prepared for the waterways component, including the Port and Inland Waterways Terminal (IWT) in April 2003 and for the road component in March 2005.4 M/s RITES Limited, a Public Sector Undertaking under the Ministry of Railways, suggested a waterway route from Sittwe Port to Kaletwa (225 km) along the Kaladan River, followed by a roadway from Kaletwa to the India–Myanmar border (62 km).5

    By 2016, the Sittwe Port and Paletwa Inland Water Transport Terminal were completed.6 A DPR for a new container terminal was prepared, and a MoU for the operation and maintenance of the facilities was signed in October 2018, appointing A to Z Exim Limited as the private operator from January 2020. The Indian government allocated Rs 1921.05 crores for the road component, with IRCON International appointed as the Project Implementing Agency in March 2022.7 Construction commenced from both Paletwa and Zorinpui ends to facilitate the project's implementation.

    On 9 May 2023, the first Indian cargo ship arrived at the newly inaugurated Sittwe Port in Myanmar's Rakhine State. The ship departed from Kolkata's Syama Prasad Mookerjee Port and was received by Sarbananda Sonowal, Minister for Ports, Shipping, and Waterways. Myanmar's Deputy Prime Minister and Union Minister for Transport and Communications, Tin Aung San, also attended the occasion. This project is expected to reduce the cost and time of transporting goods between Kolkata and cities like Agartala and Aizawl by more than 50 per cent, leveraging a route from Kolkata to Sittwe, then onward to Paletwa and further by road to Northeast India.8

    India attributed the success of the KMTTP to the visionary 'Act East' policy, emphasising that this initiative has unlocked significant commercial opportunities not just for Northeast India but also for Bangladesh, Bhutan, Nepal, Myanmar and the broader Southeast Asia region. The project was poised to transform Sittwe Port in Myanmar into a major hub for regional trade. Key exports from Myanmar through Sittwe Port will include rice, timber, fish, seafood, petroleum products and textiles, while major imports will consist of construction material such as cement, steel and bricks.9

    Strategically, Sittwe Port will provide Northeast India with an alternative, more efficient trade and transit route, reducing dependency on traditional pathways and fostering economic development in the region.10 For Myanmar, especially the Rakhine State, the port is expected to enhance trade and commerce, facilitating closer economic integration with India. The project thus represents a crucial step in bridging South Asia with Southeast Asia, promoting regional prosperity and cooperation.11

    The KMTTP is expected to provide a strategic link to the North-East, thereby reducing pressure on the Siliguri Corridor.12 The Siliguri Corridor, colloquially termed the ‘chicken neck’, is a constricted expanse of territory linking India's northeastern states to the broader Indian mainland. The ‘Chicken’s Neck’ corridor has an approximate width of 33 km on the eastern end and 21 km on the western end.13

    Challenges

    The Kaladan project faced a significant setback, following the capture of Paletwa township near the Mizoram border, by Arakan Army (AA) in January 2024. In February 2024, while a United League of Arakan (ULA) spokesperson affirmed the safety of the KMTTP and expressed readiness to cooperate with India for mutual benefit, reports noted that the KMTTP has ‘almost died’ after the AA seized control of Paletwa.14 The AA now controls most major towns and supply routes in the region. Consequently, the Kaladan project has reached a near-standstill, as Paletwa is critical to the project's progress and is no longer under the control of the military junta.

    The project road extends in a south-north direction within the Chin State of Myanmar, running parallel to the Kaladan River. It originates from the eastern bank of the Kaladan River,

    Where a jetty for a waterway terminal has been proposed as part of the ‘Waterway Project’ linking Sittwe port and Paletwa. The road concludes at the India-Myanmar border. The total projected length of the road alignment is approximately 109.200 kilometers, with Package I (Paletwa to Kaletwa) covering 60.700 kilometers and Package II (Kaletwa to Zorinpui/India-Myanmar border) spanning 48.500 kilometers.15

    Currently, the highway from Paletwa to Zorinpui is not yet built.16

    This route goes through one of the areas hardest hit by the ongoing conflict between the Myanmar military and resistance forces. Against this backdrop, the Adani Group divested its investment in Myanmar's Sittwe port earlier this year, amidst escalating conflict between the military junta and the AA insurgents.17 The KMTTP traverses through two states in Myanmar—Rakhine and Chin. Following the military coup in Myanmar in February 2021, an armed civil war erupted, leading ethnic rebel and pro-democratic armed forces to take control of substantial parts of the country, including significant areas in Rakhine.

    Prior to the military coup, the Kaladan project had also faced delays for various reasons, including the Rohingya crisis that emerged in 2017. The recent developments have also raised concerns about a potential tripartite conflict involving the junta's forces, the AA, and rebels from Chin State, given that Paletwa has traditionally been a Chin-majority township. The Chin State, located on the border with Mizoram, represents a particularly intense battleground. This region has witnessed close coordination between the Chinland Defense Force, the People’s Defense Force (PDF), and the Chin National Army in their struggle against the military junta.18

    By early July 2024, the civil conflict in Rakhine State has significantly intensified. Since late 2023, the AA has made substantial territorial gains, including key townships near the Bangladesh border. The State Administration Council (SAC), primarily military-controlled, has responded with severe tactics, causing significant civilian casualties and widespread destruction. Rising tensions between the ethnic Rakhine population and Rohingya Muslims further complicate the situation.19 Estimates indicate that the AA now controls 50 per cent to 75 per cent of Rakhine State, with their hybrid governance system playing a pivotal role in this power shift.20

    Apart from Rakhine, the Junta generals are fighting similar EAOs in Chin, Sagaing, Shan, Kachin and Kayah State near the Thailand border. Moreover, western Myanmar is currently controlled by two powerful armed groups—the Arakan Army representing the Arakanese and the Chin National Front/Army (CNF/A) representing the Chin. This conflict is significant for India’s strategic interests in the region, necessitating balanced engagement with both the AA and CNF/A, as well as other political actors within the Chinland Council. During recent months, resistance forces have made unprecedented advances against the military SAC. A key front is Rakhine State where the AA now controls a majority of townships. By May 2024, the AA captured 10 township centres in northern and central Rakhine State and southern Chin State, including Pauktaw, Kyauktaw, Mrauk-U, Minbya, Myebon, Ponnagyun, Rathedaung, Buthidaung, Ramree and Paletwa.21

    The AA forces territorial advancements have hindered road construction efforts from Paletwa in Chin state to Zorinpui on the Mizoram border.22 Prior to the latest escalation of the civil conflict, the AA had formulated plans to impose taxes on infrastructural initiatives and commercial enterprises within the Rakhine and Chin states, notably targeting the Kaladan project.23 This maneuver sought to bolster their fiscal resources and consolidate authority, thereby potentially influencing developmental initiatives. The AA also abducted five Indian workers from a project site in November 2019.

    Conclusion

    The Kaladan Multi-Modal Transit Transport Project has encountered numerous obstacles, primarily due to Myanmar's political instability, ethnic armed groups, and law and order issues. The situation worsened after the February 2021 militay coup, which escalated into a severe civil war in October 2023, initiated by various ethnic armed groups against the military. Rakhine State, where the project is located, remains partially under military control, with the Arakan Army consolidating its influence near the borders of Bangladesh and India. Significant portions of the project are still under construction. Security concerns can be expected to persist until Myanmar achieves political stability and the civil war ends.

    Views expressed are of the author and do not necessarily reflect the views of the Manohar Parrikar IDSA or of the Government of India.

    Keywords: 
    India-Myanmar Relations
    Act East Policy
    Myanmar
    India

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