Infravisioning: India-Middle East-Europe Economic Corridor

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00:00 [MUSIC]

00:15 >> Hi, thanks so much for joining in.

00:16 You're watching Infravisioning on BQ Prime.

00:18 My name is Alex Mathew.

00:19 This conversation is all about infrastructure.

00:22 The latest headline, I think,

00:24 is the most topical to talk about this year.

00:27 That comes from the G20 summit

00:30 that was recently concluded in New Delhi.

00:32 It was the announcement of

00:34 the India-Middle East-Europe corridor.

00:38 What are the implications for India?

00:40 How will this be constructed?

00:41 How long will it take?

00:42 All of that and more on this chat.

00:45 Joining me is Vinay Chatterjee,

00:47 the founder and managing trustee of the Infravision Foundation.

00:52 Thank you so much, Vinay, for taking the time.

00:54 Let's start with that big announcement.

00:56 Would you agree that this is

00:58 the largest such announcement in recent times?

01:01 >> I suspect it is so.

01:04 Because under one umbrella,

01:08 to have an investment of this magnitude is probably right in

01:15 saying it's the largest Infra initiative

01:17 ever announced by a group of countries together.

01:20 The exact investment numbers, by the way,

01:23 are still being worked out because

01:25 these are all estimates right now.

01:26 But the routing that has been shared in

01:29 the public domain is about 8,200 kilometers.

01:35 The line as presented in the media starts from Mumbai port,

01:43 connects by ship to Dubai port.

01:47 From Dubai port overland to Israel,

01:51 Haifa port in Israel by land.

01:54 Then from Haifa port to Greece by ship.

01:58 Then from Greece to Hamburg in Germany,

02:04 by combination of, I suspect,

02:06 road and rail because rail already exists and roads exist in Europe.

02:09 Now, this is the alignment proposed to link

02:13 India to the heart of industrialized Europe.

02:18 As you know, the acronym given is IEEC,

02:22 I M E E C, India, Middle East, Europe corridor.

02:27 Let me pause here before we move on

02:29 to the other dimensions of this initiative.

02:32 My understanding of this is, Vinayak,

02:35 that a certain amount of infrastructure already exists.

02:38 This will have to be augmented in years to come.

02:41 An MOU has been signed as of now between several countries,

02:45 including India, European Union,

02:47 Saudi Arabia, France, and also US.

02:51 But it will require significant augmentation.

02:54 What direction do you think that will take?

02:58 And how much will India have to work on?

03:02 Look, I think the trick in the whole thing

03:04 is not the quantum of investment,

03:05 which I still have to figure out what it will take for the overland connections.

03:11 You know, the complete link from Dubai to Haifa port overland to Saudi Arabia,

03:18 et cetera, et cetera, and from the Greek port,

03:22 the port in Greece to Hamburg,

03:27 that portion I don't think requires great infrastructure,

03:29 because Europe already has a great network of inland waterways, roads, and rail.

03:34 The ports are already in existence.

03:37 So what looks like to be a major investment

03:41 is what I would look at as the rail link

03:44 from Dubai to Haifa port running across the Arabian Peninsula,

03:49 right from Dubai, UAE, through Saudi Arabia into Haifa port.

03:55 That seems to me the biggest chunk of infra,

03:58 but the softer aspect is honestly the multimodalism involved.

04:03 I think the softer dimensions of being able to transport cargo

04:10 in a seamless manner with minimum paperwork, minimum customs checks,

04:14 minimum delays in shifting from one mode to the other.

04:19 To me, the softer aspects are more important in terms of each of the countries

04:25 contributing to getting that process right.

04:29 The hardware, to my mind, is easier delivered

04:33 than the software of traversing almost 15 countries.

04:37 The link today traverses 15 countries.

04:39 So at each point, border checkports, transshipment, loading, unloading,

04:45 in fact, is to my mind the critical issue,

04:48 that it is being done as seamlessly as possible.

04:51 And by the way, there are already critics who are coming out,

04:54 who are critically examining this whole concept.

04:57 And one of the points that is being mentioned

04:59 is that there are too many points of transshipment.

05:02 For example, a container from Bombay will get loaded in Bombay,

05:06 unloaded in Dubai from a ship,

05:08 then loaded onto a rail from Dubai to Haifa port,

05:15 will be loaded onto a rail,

05:18 then from Haifa port in Israel to Greece will be ship again,

05:23 then from Greece to Hamburg will be road or rail.

05:27 So there are almost five, six points of multimodalism,

05:31 of shifting from one mode of transport to the other.

05:34 And critics are already saying,

05:36 you load a container on a ship in Mumbai and it goes to Hamburg.

05:40 So, I mean, the Suez Canal.

05:43 So what's the big deal? We have to address these issues.

05:46 So, but then perhaps one could argue on the other side is that

05:50 you're not necessarily sending all of the goods straight to Hamburg.

05:54 You are also sending goods to several locations within that route,

05:59 which is not possible for you to do on ship that takes you straight to Hamburg.

06:03 But the other aspect that I want to ask you about is that

06:07 we've heard announcements of this so-called New Silk Route of China.

06:13 And I'm talking about the Belt and Road Initiative

06:16 that has been spoken about for some time.

06:19 Is this the answer to that New Silk Route?

06:23 You are asking a question loaded with geopolitics.

06:29 So let's... That's my job, Vinayak.

06:33 It's my job to reply to that. So let's do that.

06:37 You see, when China announced the Belt and Road Initiative,

06:42 which I think was earlier called One Belt, One Road,

06:44 or then got changed to BRI, Belt and Road Initiative,

06:49 it drew gasps from the rest of the world because

06:52 I think it included, the vision included over 100 countries,

06:57 many of them small, poor, Asian or African continent countries.

07:02 And China wanted to use that to demonstrate two aspects of its increasing global power.

07:11 One, its diplomatic power by saying, look, we've got excellent contacts,

07:16 we are dominant in trade,

07:18 and we are creating a network that the world has not seen in the South-South,

07:22 in the developing world.

07:23 The second point China was trying to make is that

07:27 we have the financial capacity to give low-cost debt to many of the countries

07:33 that do not have the capacity to build these infrastructures,

07:36 these ports, airports, roads and rail links.

07:39 So we are also in some senses a kind of a substitute at a country level

07:44 for multilateral development banks.

07:47 So there was a bundle of very strong messages and a very strong

07:51 undertone of Chinese domination of the developing world through this initiative.

07:56 Interestingly enough, while it generated the oohs and ahhs,

08:02 as we see today, it has generated an equal amount of criticism.

08:06 One, that it is a single country initiative as distinct from our

08:12 I-means initiative that we are discussing now.

08:15 It was seen as a single country initiative.

08:18 It was seen as vastly too ambitious in its scope to be meaningful.

08:24 And three, the large portion of the criticism now is that it was

08:29 willy-nilly enticing smaller, less developed countries

08:34 without strong financial economic base,

08:37 an economic base, to become beholden to China for funding its infrastructure

08:43 and in the process, getting into debt that they had no great

08:48 ability to repay.

08:49 So you become indebted nationally to China.

08:54 So all these criticisms have come in and this seems to be the new initiative

08:59 of I-means announced at G20 seems to be a very interesting

09:05 response to that initiative of China's.

09:07 But we can go on and on and discuss this, but over to you.

09:10 No, certainly. So that is effectively what I wanted to get from you,

09:15 that perspective on how this will compare to that.

09:19 You mentioned that the hardware is not going to be too complicated,

09:23 but all the same, assuming that there is a need to develop a certain portion

09:29 of this, how long do you anticipate?

09:32 And as somebody who has viewed infrastructure over the years,

09:36 how soon is it possible for something like this to actually see the light of day?

09:42 You know, it could be done in three years, because honestly,

09:45 there are no new ports to build.

09:47 All the ports are today operating ports.

09:50 Mumbai, Dubai, Haifa, and I think the Prius port in Greece.

09:55 They are all operating ports, which are anyway transshipping cargo

09:59 or are shipping cargo in and out.

10:01 So the real portion is the overland portion and the bulk of the overland

10:05 portion is the connectivity by rail or road, and I suspect it is rail,

10:12 from Dubai port to Haifa port in Israel.

10:15 Now, I don't know the exact kilometers, but if push comes to shove,

10:20 a track that long can be built in three years.

10:23 So would there be need to augment the capacity of the port in Mumbai,

10:29 for example, deepening of the port, would it be required at all?

10:33 Or would you also need to have more operational ports on the western side?

10:41 So now this is what brings me to a larger issue.

10:43 You're actually pointing me in a direction which raises some questions,

10:47 that the line as presented on the media by the G20 Secretariat

10:52 or whoever is presenting this to the media, the line starts from Mumbai.

10:56 And, you know, one of the partners and signatories to this whole

11:01 arrangement is Japan itself.

11:02 So what I find is that there is a portion of Southeast Asia,

11:06 South and Southeast Asia, that does not seem to be connected

11:11 with the line as per what has been put out.

11:14 And therefore, I would argue that the line should extend beyond Mumbai.

11:19 It should connect India's new transshipment port in Kerala for a very long time.

11:24 It should certainly join up with Colombo port.

11:27 It should tie up with Chittagong port.

11:31 And, you know, taking its stride, a little more eastward push

11:38 to some of these Southeast Asian countries.

11:41 It should also, as you know, there is also a proposed transshipment port

11:44 that India is proposing in the Andaman.

11:47 And that is expected to be operational by 2028.

11:51 So I would actually start drawing the line from Andaman,

11:55 India's new proposed transshipment port.

11:59 Start drawing the line and come past Chittagong, Colombo,

12:04 Biringam in Kerala, Mumbai, and make the shipping route a larger

12:08 play towards South and Southeast Asia.

12:10 The second point I want to add, that this corridor should not only be about

12:14 movement of physical goods.

12:16 What we are seeing in the region is also a movement of energy.

12:20 Today, India buys hydropower from Bhutan and we sell cold thermal power

12:24 from Bangladesh.

12:26 And there is a talk of integrating electricity grids and even taking

12:30 a dedicated line to Sri Lanka.

12:32 So while all this talk is happening, I would urge the G20 nations to consider

12:38 expanding the scope to include electricity transmission also in the region.

12:42 But also a very important play on renewables because, you know,

12:46 as the sun moves and it is becoming nightfall in places like Thailand,

12:51 Vietnam, it is burning brightly in Rajasthan.

12:55 Right.

12:56 Right.

12:57 So there is a play where an entire region can more optimize solar

13:03 by having an interconnected grid.

13:06 So these considerations, since the plan is still being fleshed out,

13:10 some of these considerations could be considered.

13:12 Interesting.

13:13 Okay.

13:14 Now, my final question here would be not necessarily as part of this,

13:19 but as an incidental development to this is that obviously India is developing

13:25 its own infrastructure and its rail to ship infrastructure is developing

13:30 even as we speak, its roads are developing.

13:33 If it turns out that this becomes a major corridor for trade and you have finished goods

13:39 that move from India out, you would have to bolster the internal

13:43 connectivity as well.

13:45 What are the implications for infrastructure and major infrastructure

13:49 projects at that in terms of the freight corridors within India?

13:53 Well, it's an interesting question, but I think we are on top of the game there.

13:57 As you know, both the eastern dedicated freight corridor and the western dedicated

14:02 freight corridor are almost near completion and ready to start operation

14:06 by the end of the year or early towards next year.

14:08 Right.

14:09 Then there is a huge move in our national logistics plan to create a huge number

14:13 of container freight stations and multimodal logistics parts.

14:17 So I think internally we are and our road networks are pretty good.

14:21 So internally, I think we are well geared to, in a sense, link ourselves up

14:28 domestically with this IMEEC initiative.

14:32 Fantastic.

14:33 So I think we've covered quite a few bases.

14:35 We will, of course, touch base once we get more clarity on the exact route that this

14:40 will take and the investments therein.

14:42 But Vinayak, as always, thank you so much for taking the time.

14:45 Thank you.

14:46 It's very topical.

14:47 It's a very topical discussion right now.

14:50 Certainly.

14:51 Viewers, there you have it.

14:52 That's the conversation on the IMEEC, as it is called.

14:56 Do let us know what you think in the comments.

14:58 And meanwhile, stay tuned.

14:59 Lots more coming up on BQ Prime.

15:02 [MUSIC PLAYING]

15:09 [END]

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