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India digs
deep for trade and commerce
By Sudha Ramachandran
BANGALORE - A century and a
half after the idea was first conceived, the decks
have finally been cleared for the execution of the
Sethusamudram shipping canal project. This
envisages increasing the navigability of the
waters between India and Sri Lanka, and will
involve dredging a channel in the seabed between
the 
two countries. The canal will run through
Indian territorial waters.
India's cabinet committee on
Economic Affairs has given the green light for the
US$550 million project, and work is scheduled to
begin next month. The canal is expected to be
ready by 2008 for medium-sized vessels to
navigate.
Currently, the movement of
vessels through the Palk Strait is impeded by its
shallow waters. Between Pamban island near
Rameshwaram in the southern Indian state of Tamil
Nadu and Talaimannar in Sri Lanka's Mannar
district lies a reef called Adams Bridge, where
the depth of the sea is a mere two to three
meters. Consequently, ships from the Arabian Sea
heading to the eastern ports of India (or vice
versa) have to take a circuitous route around Sri
Lanka at present.
The Sethusamudram
project will change that. It involves dredging a
167 kilometer, 300 meter wide, 14.5 meter deep
canal, which will stretch from Tuticorin port on
India's southern coast to Adam's Bridge in the
Gulf of Mannar, and extend northward to the Bay of
Bengal.
Once the canal is ready, ships
will be able to avoid sailing the circuitous route
around Sri Lanka, reducing travel distance by
about 400 nautical miles and travel time by at
least 36 hours. The reduction in travel time and
distance, fuel costs and docking fees at Colombo
will cut maritime transportation costs
significantly. This cut in costs will obviously
make Indian goods more competitive globally, and
domestic consumers, too, would benefit. India
would also gain from toll collections from vessels
using the channel.
The project is to be
funded by government-guaranteed debt and equity
from the public that that will be listed on stock
exchanges.
Winners and
losers
Tuticorin harbor is the biggest
beneficiary of the project. The Sethusamudram
canal is expected to transform Tuticorin into a
transshipment hub that will act as a catalyst for
the development of other ports - in Nagapattinam
and Rameshwaram for instance - as well as economic
activity in the hinterland.
However, while the project
might hold out the promise of profits and seem
like a South Asian version of the Suez Canal, to
some it spells economic ruin and environmental
disaster.
Notably, there are worrying
economic implications for Sri Lanka. Colombo port
currently relies on India for about 60% of its
transshipment business. This could fall
drastically once the canal is operational.
However, Indian officials are saying that
Tuticorin cannot displace Colombo in importance as
a port, as bigger Indian vessels would still need
to sail around Sri Lanka and dock at Colombo port.
Besides, international shipping would continue to
take the route around Sri Lanka.
Environmentalists in India
have pointed out that the project threatens the
rich marine ecology of the area and that the
dredging and marine traffic could destroy the Gulf
of Mannar Marine Reserve - one of India's most
biologically diverse coastal regions.
Environmentalists in Sri Lanka have warned that
heavy dredging could disturb the water system of
the Jaffna peninsula. It is also feared that the
dredging and increased maritime traffic would
disrupt sea currents, step up sea erosion and
threaten the fragile coastline of the Gulf of
Mannar.
The livelihood of
about 500,000 fisherfolk spread across 138 fishing
villages along five coastal districts of Tamil
Nadu will be severely hit, as there will be
restrictions on the waters they can enter and the
number of hours they can fish. Entire fishing
villages could be displaced to make way for repair
yards and other onshore services.
But not
just the environment lobby is opposed to the
project. "Comparing the Sethusamudram canal with
the Suez or Panama canals is absurd," admits an
Indian official in the Ministry of Shipping. "The
Suez Canal transports 14% of world trade and
reduces navigation time by 24 days. The
Sethusamudram Canal cuts navigation time by 36
hours only. The investment might not justify the
boost in trade that is expected to accrue," he
points out.
So why is the Indian
government steaming ahead with the project?
"Reports in the media seem to have exaggerated
India's expectations from the project," says the
Shipping Ministry official. India does not expect
the Sethusamudram project to emerge as an
important waterway for international shipping. "We
see it as a means to boost coast-to-coast shipping
within the country," he says.
All
political parties in Tamil Nadu have been
demanding the implementation of the project. It
appears that pressure from the Tamil parties in
the ruling United Progressive Alliance coalition
has speeded up the cabinet committee's green light
for the project.
But there are also
defense and security compulsions behind the
project. India's Minister of Finance P Chidambaram
has drawn attention to the "tremendous
externalities" in defense, security and
anti-smuggling that the project has. Security
analysts have pointed out that the canal would
enable the Indian navy and coast guard to deploy
larger vessels than they do at present and allow
them to deploy faster as well.
The
significance of the project to India's security
stems from its proximity to Sri Lanka's Northern
province, the bastion of the Liberation Tigers of
Tamil Eelam (LTTE). The increasing reach and
effectiveness of India's navy and coast guard in
the Palk Strait and the Gulf of Mannar as a result
of the project is expected to improve India's
capacity to check smuggling and movement of LTTE
cadres across these waters.
Analysts such
as Professor V Suryanarayan, former director of
the Center for South and Southeast Asian Studies
at the University of Madras, have been warning
that the emergence of the LTTE's naval wing - the
Sea Tigers - "as a credible fighting force in
India's immediate neighborhood has serious
implications for India's security".
"New
Delhi should take up the Sethusamudram project on
a top priority basis, so that the navy and the
coast guards can freely move around the Palk Bay
and the Gulf of Mannar and keep constant vigil on
India's maritime borders," he wrote in 2003 in an
opinion piece in The Hindu.
The LTTE has
been strangely silent on the project. Sri Lankan
sources tell Asia Times Online that this could be
because Tamil political parties in India are in
favor of the project. And the Tamil LTTE might not
want to be seen to be opposing their "dream
project". It is possible that the LTTE is content
to stand back for now while the environmental
lobby and other opponents of the project press
their protests. Pro-Tiger websites have been
carrying analyses by environmentalists critical of
the project and articles that portray India's
maritime and geostrategic ambitions.
When
Prime Minister Manmohan Singh lays the foundation
for the Sethusamudram canal project next month,
India will be taking its first concrete step
toward making a 150-year dream a reality. This
reality, though, might not turn out to be as rosy
as hoped.
Sudha Ramachandran is
an independent journalist/researcher based in
Bangalore.
(Copyright 2005 Asia Times
Online Ltd. All rights reserved. Please contact us
for information on sales, syndication and republishing.) |
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