New Delhi, April 3: In the first concrete manifestation of India’s Look East policy, the government has cleared the way for the country’s land-locked Northeast to the Bay of Bengal.

External affairs minister Pranab Mukherjee and Myanmar’s minister for foreign affairs, U Nyan Win signed an agreement on Wednesday night finalising the Rs 536-crore Kaladan multi-modal transit transport project.

The agreement was signed in the presence of Myanmar vice-senior general Maung Aye and vice-president Hamid Ansari.

As Bangladesh wavers on granting trade transit through Chittagong port, the Myanmar project will bypass that country to make the Kaladan river in Mizoram navigable till the Sittwe port on the western coast of Myanmar.

“The objective is to provide an access route from any part in India to the Northeast (and which) also gives another alternative route to counter Bangladesh’s continued intransigence in providing us transit rights through its territory to the Northeast,” an external affairs ministry note observed.

Kaladan will give India the much-needed access to give impetus to growth in the Northeast. It will also connect the Northeast to Southeast Asia. The project’s first component is upgrading the existing Sittwe port.

Kaladan is navigable from its confluence point with the Bay of Bengal near Sittwe up to Setpyitpyin (Kaletwa) up north. Therefore, the second component is to dredge 225km between the two points.

In the third phase of the $130 million project, India will construct a road on the 52-km stretch between Kaletwa and the Mizoram border. The Centre will also link a road to National Highway 54 that will be the region’s artery to and from the sea.

Myanmar will facilitate the use of the Sittwe port terminal facilities for berthing, provision of fuel, boats and barges for transportation of personnel and equipment for construction along the project corridor, including Kaladan.

First proposed by the Mizoram government in 1994, the project was kept pending because of India’s insistence for a build-operate-transfer mode of implementation.

Precious time was lost in the last five years as China, in due course, made massive investments in Myanmar for obvious strategic and geopolitical reasons.

However, since last year, the Centre had softened and got ready to experiment with the build-transfer-use method.

Myanmar promptly agreed to this in which, at the end of the 60 months of execution, the project will be fully owned by Myanmar under mutually agreed conditions.

“Although we are committed to complete it in five years, we can try and complete it in four,” said minister of state for commerce Jairam Ramesh.

The Kaladan project is likely to open vistas for investment cooperation in power, oil and gas and railways between the two countries.

Ramesh will visit Yangon in June to finalise free trade at Moreh on the Indo-Myanmar border in Manipur. He will also discuss developing Zowkhathar land customs station in Mizoram.