India will finance 80% of the estimated $34m required for dredging to maintain navigability on the Sirajganj-Daikhawa stretch of the Jamuna river and the Ashugunj-Karimgunj stretch of the Kushiyara river in Bangladesh.
Both the stretches are part of the India-Bangladesh protocol routes.
Dredging will help improve cargo movement from Kolkata to North-East through Bangladesh.
Quoting Pravir Pandey, vice-chairman of the Inland Waterways Authority of India (IWAI), The Hindu reported that the tender for dredging will be floated by the Bangladesh Inland Waterway Transport Authority (BIWTA) and only Indian and Bangladeshi companies can take part in the bidding.
India signed an MoU with Bangladesh for fairway development across the stretches during the visit of Bangladesh Prime Minister Sheikh Hasina to Delhi last month.
Dhaka allowed transhipment of goods through Ashugunj port, near the Tripura border, last year.
The Hasina administration’s decision to charge transit fees of Tk192 ($2.384) per ton triggered a controversy in Bangladesh, as it was deemed too low.
Poor logistics facilities
However, transporters found that the facility was unviable due to long turnaround times and rudimentary logistics facilities at Ashugunj. Nearly a year since the treaty, only three consignments passed through the port.
Dhaka is now planning to upgrade the Ashugunj port facility using a part of the $2bn second line of credit. (A third line of $5bn was offered last month).
This, coupled with dredging, should improve the viability of river transport through Bangladesh, officials involved in the project hope.
From the Indian perspective, the Sirajganj-Daikhawa stretch is more important as it would help create a nearly 4,000km-long fairway from Varanasi in Uttar Pradesh to Sadiya in upper Assam (bordering Arunachal Pradesh) through Bangladesh.