Dhaka may downgrade Delhi in 3-nation project

To revive the stalled project, Bangladesh may soon issue a letter of no-objection for the project to be executed by an international consortium, as advised by Mohana Holdings Ltd of Bangladesh, the company which had proposed and conducted the feasibility study for the project. This is in contrast with the plan of executing the project by state-owned companies of the three countries.

The Research & Analysis Wing (RAW) of the Indian government has alerted the Prime Minister’s Office (PMO) and the petroleum ministry that Mohana Holdings, in its latest strategic analysis of the project, has recommended that India be barred from owning any part of the pipeline and be kept out of project management.

“Mohana Holdings has held the view that the role of India in this project had been exaggerated as a partner whereas India will only buy gas from Myanmar’s gas fields against payment in US dollars,” said RAW in its note. Further, the company feels the decision of the Bangladesh cabinet to negotiate bilaterally with India had wrongly bestowed the role of partner to India in the project.

According to RAW, Mohana Holdings has recommended that Bangladesh not give any guarantee for gas purchase from Myanmar or supply to India. Instead, the international consortium be involved in negotiating relevant agreements for access to right of way, transit fees and issuing any guarantee to the buyer and the seller.

Emboldened by India’s soft approach towards the project, the company has said Dhaka should favour Myanmar since it could offer Bangladesh a corridor to Chinese markets. Bangladesh holds significant hydrocarbon resources in the Bay of Bengal that it can export to China via Myanmar.

Myanmar has already agreed to supply gas to China through a proposed pipeline from Sittwe to Kunming (in China) via Mandalay.

RAW has said Bangladesh has been cautioned that its inaction would frustrate Myanmar’s plans to earn $3-6 billion a year from gas sales to India and would create problems in Bangladesh-Myanmar relations to the advantage of India.

The multi-billion dollar, tri-nation project was conceived to transport gas from Myanmar via Bangladesh to India. It, however, was stalled after Dhaka proposed preconditions, including reduction in the trade imbalance with Bangladesh, besides allowing the latter to import electricity from Nepal and Bhutan through India.