India’s offer to finance Teesta barrage puts Prime Minister Hasina in a diplomatic fix 

Since Bangladesh had asked China to help with the project, Hasina must now decide between India and China, balancing benefits and potential backlash.

Published : May 17, 2024 14:23 IST - 7 MINS READ

Prime Minister of Bangladesh Sheikh Hasina at UN headquarters on September 23, 2022.

Prime Minister of Bangladesh Sheikh Hasina at UN headquarters on September 23, 2022. | Photo Credit: Jason DeCrow/AP

A recent Indian offer to finance the Teesta barrage, considered to be the biggest irrigation project in Bangladesh, has put the country’s Prime Minister Sheikh Hasina in a spot. By participating in the project India can hope to resolve a long-standing domestic as well as diplomatic issue peacefully. But before the Indian offer was made Bangladesh had approached China to construct the project and the Chinese showed keenness in developing it. India’s offer, therefore, puts Hasina in a tight spot.

India’s failure to resolve the Teesta River waters issue for years was frequently used by the opposition in Bangladesh against Hasina. If she decides to bring in India in place of China, she could find it difficult to convince her detractors that choosing India rather than China would benefit Bangladesh more.

India and China agreeing to develop the project jointly is a non-starter given the fact that both countries are engaged in a tussle over expanding their influence in Bangladesh, which India sees as its zone of influence. India also has serious security concerns over China’s involvement in a project that is close to the Siliguri corridor, an area of high strategic importance because it connects the north-eastern States with the rest of India. Besides, in recent years, India-China relations have come under strain over India’s growing ties with the US and Japan.

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India’s offer to finance the Teesta barrage project, estimated to cost over $1.1. billion, was made during a recent visit by Foreign Secretary Vinay Kwatra to Dhaka. He met senior Bangladeshi officials and expressed India’s desire to develop the project.

“This poses a tough choice for Prime Minister Hasina,” says Touhid Hossain, a retired diplomat and former Foreign Secretary of Bangladesh.

Some years back, Bangladesh had cancelled the Sonadia deep sea port project in the Bay of Bengal near Cox’s Bazar that China was keen to construct. Hasina had cancelled the deal a few days before the final agreement was to be signed when India, along with the US and Japan, raised serious security concerns about allowing China to construct the port in such a strategically important area of the Indo-Pacific. Instead, Hasina, encouraged by the three countries, got the Japanese to build the Matarbari port about 25 km away from the proposed Sonadia project.

“If she repeats the same thing with China on the Teesta project, for which she had approached the Chinese, it is likely to strain her ties severely with Beijing,” said Hossain.

China is the largest trading and defence partner of Bangladesh and a key investor in the country, where it has built a number of infrastructure projects under its Belt and Road Initiative (BRI).

Some Bangladeshi commentators see the Indian offer as opening another door for Hasina to resolve amicably a long-pending issue that has plagued bilateral relations.

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Imtiaz Ahmed, a political commentator who teaches international relations at Dhaka University said, “It’s a welcome development and to my mind the only way to resolve this contentious issue that has been going on for years.” He pointed out that China agreed to get involved in the project only because Bangladesh approached it.

In Ahmed’s view both India and China could participate in the project. But if it is a question of having to choose one or the other, Hasina will have to assess whose is the best offer for Bangladesh.

The sharing of Teesta waters has plagued India-Bangladesh relations for years even though the two countries have been able to develop an extremely warm and close relationship in the past 10 years. Although Prime Minister Narendra Modi managed to build a strong rapport with Hasina, who has been Prime Minister since 2010, as part of a successful neighbourhood policy, the Teesta waters remained a vexed issue. One reason for this was that West Bengal Chief Minister Mamata Banerjee, despite her fondness for Hasina, was not willing to give the amount of water the two countries had agreed upon because that would mean depriving farmers in her own State.

10 million livelihoods

Teesta is among the 54 transboundary rivers between India and Bangladesh. It flows southwards from the hills of Sikkim in India and northern part of West Bengal before it enters Bangladesh in the Rangpur Division. It is the fourth largest river of Bangladesh and acts as the main river for the country’s northern areas. It is important for the area’s agriculture and accounts for about 14 per cent of the country’s crop production and supports the livelihood of around 10 million people.

But dams constructed by India have constrained the flow of water upstream and affected its discharge into Bangladesh. This has impaired irrigation on over 1,00,000 hectares of land, according to Bangladesh experts.

The country used to get 6,710 cusecs (cubic feet per second) of water before the dams were constructed by India. Now it gets only 1,200 to 1,500 cusecs of water during the dry summer season, which even drops to 200 to 300 cusecs, creating acute misery for farmers in Bangladesh.

According to a report by Observer Research Foundation (ORF), a New Delhi-based think tank, in March 2023, India decided to build two more canals to divert the water of the Teesta. This was in violation of the agreement between the two countries, which prevented any major construction for water diversion, and forced Bangladesh to write to New Delhi protesting the Indian decision.

The Teesta river in Sevok, some 20 kms from Siliguri.

The Teesta river in Sevok, some 20 kms from Siliguri. | Photo Credit: DIPTENDU DUTTA

The aim of the proposed Teesta irrigation project is to build a multi-purpose barrage that would dredge and embank portions of the Teesta to form a single manageable channel where the water level would be much higher, says the ORF report. It said Bangladesh had begun work with the Chinese, but construction activities came to a halt in 2022 after India raised security concerns about China’s presence less than 100 km from its borders and so close to the Siliguri Corridor.

Shahab Enam Khan, a Dhaka-based political commentator said that though India’s offer gives another option to Bangladesh, questions remain both on financing and on completion of the project in a time-bound manner. Many projects that India has undertaken in Bangladesh have suffered from financial issues and delay. “These problems will be in Hasina’s mind when she decides on finalising the project,” says Khan.

According to reports in the Bangladesh media, the country had dropped a number of projects that were covered under the Indian Line of Credit (LOC). The country’s leading Bengali daily, Prothom Alo, reported in August 2023 that Dhaka had dropped a number of projects from the Indian LOC for factors ranging from strict loan terms, high demands of contractors and hassle of taking approval at every point by quoting the Economic Relations Division.

Limited room for negotiation

In the past decade, Bangladesh signed loan agreements worth $7.5 billion under three Indian LOCs. The funds were meant for 40 projects, but only $1.5 billion has so far been disbursed.

The daily quoted former lead economist of the World Bank office in Dhaka, Zahid Hussain, as saying that the pace of fund disbursements and project execution under the Indian loan has been notably sluggish throughout the past 12 years.

He added that the issue of inflated bids by Indian contractors and limited room for negotiation was a major problem. “We are bound to agree to a high-price bid as it is mandatory to assign the projects to Indian contractors. Here, we are hostage in a sense,” the former chief economist of the World Bank complained.

Touhid Hossain points out that ensuring that contracts for executing projects under loans given by countries go only to companies and contractors of those countries is a well-accepted practice. Even China brings in its own companies and workers for projects it funds. “But the Chinese projects are all completed within the deadline that they set. The same cannot be said about Indian companies as more often than not there are inordinate delays in completing projects,” says Hossain.

Hasina is likely to visit India after the results of the ongoing Lok Sabha election are declared, and she is also expected to make a trip to China later. She will require all her political and diplomatic skills to ensure that neither India nor China feels slighted when she takes a final decision on the Teesta barrage project.

Pranay Sharma is a commentator on political and foreign affairs-related developments. He has worked in senior editorial positions in leading media organisations.

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