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Lankan economists call for revival of road, rail bridge across Palk Strait

The bridge will halve the transport cost for traders

31 May 2023 01:46 am - 12     - {{hitsCtrl.values.hits}}

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Two Sri Lankan economists, Gayasha Samarakoon and Muttukrishna Sarvananthan say that a road and rail bridge across the Palk Strait will bring down the transport cost in India-Sri Lanka trade by 50%. 
Making a strong pitch for the revival of a 2002 Indo-Sri Lankan plan to build a road and rail bridge across the Palk Strait, the economists say that it will boost trade, investment and economic development in both countries.
In their paper entitled: “Economic rationale for the proposed bridge between India and Sri Lanka: An analytical perspective” published by Routledge Taylor and Francis, the economists say that a bridge linking Talaimannar in North Sri Lanka with Dhanushkodi in Tamil Nadu will shorten distance and travel time compared to the sea route.
The proposed 23km bridge is an alternative to the Sethusamudram Project (SSP). The latter, which envisages cutting a canal across the Palk Strait, is controversial because it could cause environmental damage. The SSP idea has been rekindled by the Tamil Nadu State Assembly through a resolution in January 2023 which said that the canal will boost economic activity in Southern Tamil Nadu which is currently backward.
But Samarakoon and Sarvananthan argue that a road and rail bridge linking India and Sri Lanka across the Palk Strait will achieve the same goal at less cost and without damaging the environment.    


Cost of Sea Transport
The bulk of the trade between Sri Lanka and India takes place via sea, between the Colombo and Chennai Kolkata, Mumbai, and Tuticorin ports. Tuticorin, in Tamil Nadu, is the closest and the most important port for trade with Sri Lanka. Low-value high volumes of goods such as textiles and foods (the most prominent import items from India) are transported in ‘country crafts’ from Tuticorin to Colombo.
According to traders, if the proposed bridge becomes a reality, the transport cost could be halved. Ocean freight transport is also time-consuming. The sea travel time between Tuticorin and Colombo is between 12–18 hours (from other Indian ports it is even longer). Moreover, there is a waiting time outside Colombo port to unload the cargo. 
Importers/traders estimate that 25–30% of the freight cost could be saved if cargo is transported via road/s. In addition, another 50% could be saved in transaction costs in terms of time saved. Hence, overall, 75% savings could be made in transportation costs if a bridge is built across the Palk Strait.


Freight Cost
The authors quote a shipping company to say that, in 2019, the freight charge plus terminal handling charges (at both ends) for a 20 feet general purpose container was US$625 and for a 40 feet high cube container was US$1,050 from Tuticorin to Colombo. A container would take 18–28 tonnes of goods depending on the type of goods. Thus, to transport a ton of goods from Tuticorin to Colombo by sea would cost between US$27 (general purpose container) and US$46 (high cube container). In addition, demurrage charges may be incurred due to the delay in the verification of the ‘rules of origin’ certificates under the FTA. 
Customs clearance (particularly under the FTA that may require verification of the ‘rules of origin’ clause) may cause further delay resulting in demurrage charges. 
It is pointed out that the total transaction cost involved in ocean freight transport could be more than 5% of the FOB (Free- On-Board)/CIF (Cost, Insurance and Freight) value. 


Time Factor 
The turnaround time at the Colombo port (i.e. time taken between entry and exit) was about 96.4 hours on average for non-container ships and 20.6 hours for container ships in 2019. Moreover, at least 6 hours should be added for loading at the Tuticorin port. Hence, the total time taken to transport goods from Tuticorin to Colombo is between 116 and 122 hours (i.e. around five days) for non-container ships, and between 40 and 46 hours (i.e., nearly two days) for container ships. 
Thus, it takes between two and five days to transport goods from Tuticorin to Colombo. This is “excessive” the economists say. Halving of transport costs would result in an uptick in trade volumes as well as values, they add.


Prices will Come Down  
Lower transport costs would also depress the prices of goods and services, which in turn would lower the cost of living in both countries; a lower cost of living has the potential to lower poverty levels in both countries. An uptick in the two-way trade via the proposed bridge is expected to create thousands of direct and indirect jobs that would result in the reduction of poverty in both territories. 
The 23km bridge could be traversed in less than an hour. And from the arrival point in Talaimannar, it would take another 7–8 hours to reach Colombo by road (roughly 367km). Hence, the total of 9 hours of travel time by road would be a tiny fraction of the 40–122 hours’ time taken by ocean currently, the economists point out. 
They further say that the waiting time for customs clearance and other formalities could also be significantly reduced because the land route will involve only exports/imports to/from India whereas the Colombo Harbour handles trade to and from all over the world. 


Need to Improve Road Network
To reap the maximum benefit of the proposed bridge between India and Sri Lanka, domestic road networks have to be improved, the economists say. 
Here are their observations on this aspect: “At present, the Talaimannar- Colombo stretch is almost 370 km by road, because vehicles have to travel via Anuradhapura. There is a direct route from Talaimannar to Colombo along the coast (through the Wilpattu wildlife sanctuary), which is currently not in use. This direct route is about 80 km shorter than the route via Anuradhapura.” 
“Jaffna would be another major market for the proposed Indo-Lanka Bridge, next only to Colombo. At present, Jaffna is about 250 km from Talaimannar via Vavuniya. However, there is a shorter coastal route to Jaffna from Talaimannar via Uyilankulam (in the Mannar District), Pooneryn (Kilinochchi District), and Sangupitty bridge (A32). This route is about 50 km shorter than via Vavuniya. In other words, it will save at least one hour of travel time to Jaffna from Talaimannar.”
“A highway from Talaimannar to Katunayake along the north-western/western coast could be built to join the Katunayake-Colombo Expressway. This could cut down travel time considerably. Besides, a highway linking Talaimannar and Trincomalee (via Vavuniya and Horowpathana) would provide speedier and easier access to Sri Lanka’s Eastern Province.” 

 


Boost for Backward Regions
The road link with India would also contribute to the economic development of backward provinces like the Northern Province (encompassing the Jaffna, Kilinochchi, Mannar, Mullaitivu, and Vavuniya districts) and the North Central Province (encompassing the Anuradhapura and Polonnaruwa districts).
“They are the lowest contributors to the national economy for a very long period. The poverty and unemployment rates of these provinces are the highest in the country and the human development index of these provinces is the lowest in the country,’’ the economists point out. 
“The business communities in the Northern and North Central Provinces have long complained about their inability to directly engage in international trade. Presently, the businesspersons in the Northern and North Central Provinces can engage in export/ import trade only through exporters/importers in Colombo.”
“The proposed bridge is expected to boost direct international trade between the northern, north-central, and eastern regions of Sri Lanka and India (particularly Southern India), which would considerably reduce the transportation and transaction costs involved in such direct trade.”


Fillip to Tourism 
Currently, only a small fraction of Indian tourists visits the Northern, North Central, and Eastern Provinces of Sri Lanka due to the long distance from Colombo, where the main international airport is located. The proposed bridge would boost tourist traffic to the marginalized Northern, North Central, and Eastern Provinces of Sri Lanka.


  Comments - 12

  • Srilankan Wednesday, 31 May 2023 06:49 PM

    Yes it will be great and a dream project as it we will be connected to large part of the world by road .Its long due .Goods can be transported by road even from china and Europe. Also toursim will flourish on both sides. if we can drive to India and other parts of the world by road it will be awesome.

    NAGA Thursday, 01 June 2023 05:47 AM

    WE MUST NEED TRINGO TO VAVUNIA EXPERES HAY WAY.

    R Abayasekara Thursday, 01 June 2023 10:31 AM

    This is an absolutely vital project, if we want to kick start the Sri Lankan economy. A majority will object to this as they did, when RW proposed this in (2002/3). Yes, we'll have to tolerate Indians everywhere, but Sri Lankans are smart enough to remain on top (As we have done for more than 2000 odd years). Hope RW as the President will start on this bridge and a Road Rail link to Colombo. This is the only project that RW can do, that will justify his presidency.

    Charith The Analyst Friday, 02 June 2023 09:52 AM

    Important article often goes unnoticed by individuals engrossed in their own lives.

    Gamini Friday, 02 June 2023 11:36 AM

    For SL and India this would bring more benefits than the Chinese Belt and Road Initiative

    lester Friday, 02 June 2023 06:52 PM

    what works on power point work on real life. this will only lead to infiltration of cheap Indian goods, drugs, and illegal migration and possible revival of LTTE. you are not launching a train to India, you are launching a train to Tamil Nadu. North India and South India are two countries although they go by one name.

    kamal Friday, 02 June 2023 06:55 PM

    do we export to India than we import? if the answer is no, this only benefits India. pay little extra send the good through proper channels. not shorts cuts. it will preserve a country for your children. keeping India at hands distance worked well since ancient times.

    Amaradasa Wijenayake Saturday, 03 June 2023 04:41 PM

    I hope Sajith, Wimalwansa and Anura Kumara a will do the needful to axe this project.

    Ideas are like painting doors of house when it needs to be demolished Saturday, 03 June 2023 07:21 PM

    The ideas of the economists might would good, but really in the backwardness of the nation, nothing will help in the long run but complete and proper freedoms. All this talk of economic benefit is like talking of oiling the hinges inside a broken down house, or painting doors inside a house different colours to improve appeal when the whole of the Sri Lankan system as house needs to be demolished.

    We do not need more Three-train crash like in Odisha Saturday, 03 June 2023 09:09 PM

    Getting involved with India is like having pet poisonous snake. Takes too much safety precautions. Indians connections are cheap but generally low quality and prone to problems. Look at their medicines that cause illness in eyes here, and cough syrup that killed children in Africa. There credit line is loan shark loan, taking up most our IMF loan, as the conditions on it are wicked towards us. Their train systems frequently have crashed, and many die. Like the three-train crash like in Odisha. Let's try to keep the greatest distance from India, socially, culturally and economically as possible. Being closer to China doesn't have the dangers of military and political interventions that being close to India bring about either.

    Indian who likes Sri Lankans Sunday, 04 June 2023 12:31 PM

    We don’t need three train crashed like in India but ok to have churches and hotels blasted on a religious day. I was on a recent flight from Chennai to Colombo. 8 out of 10 passengers were Sri Lankans. Looking at their luggage, it was obvious the trip was for commercial purposes. Indian Gods are kind to our leaders, let’s build the bridge before the Seth Samudram project. If the Seth Samudram project is completed, we will lose substantial revenue earned by our ports. Think business and leave racism out of it.

    Hanuman Bridge Linking Tamil Nadu and KKS Monday, 05 June 2023 09:45 AM

    No Thanks ! 25 miles of Ocean that separates the two countries is the gift the Gods gave Ceylon/Lanka. Across the straits lies millions mired in poverty , squalor, misery and ignorance.


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