![]() Financial Daily from THE HINDU group of publications Sunday, May 15, 2005 |
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Industry & Economy
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Foreign Trade Afghanistan offers biz opportunities in mining, construction Rasheeda Bhagat
A carpet shop in Kabul. Rasheeda Bhagat
Recently in Kabul ALONG with horror stories, quite a few jokes are in circulation in Afghanistan. A combination of both pertains to the Ariana airline of Afghanistan, which most diplomats, including those from India, are not allowed to fly. Till the Indian Airlines began its Delhi-Kabul flights last month, the 90-minute flight from Delhi to Kabul used to be via Dubai. While people tell you weird stories about their experiences on Ariana, the joke in Kabul is that India has palmed off its old aircraft to the Afghan airline. When this question was posed to Mr Rakesh Sood, the Indian Ambassador in Kabul, he said: "Well they are old aircraft from Air India but operational. All aircraft require period maintenance and the problem is these aircraft have not been serviced regularly perhaps for lack of resources." He added that during the Afghan President Mr Hamid Karzai's recent visit to Delhi this issue was discussed and a memorandum of understanding in Civil Aviation signed. "We're in the process of providing half a dozen experts in air traffic control, fleet management, airport security, etc. We might also sign a contract to take on the maintenance of these aircraft. Once regular maintenance is ensured, then the airworthiness of these aircraft will be assured." India has been active in Afghanistan in humanitarian services such as health and education, provision of safe drinking water and sanitation, as well as in the infrastructure sector and has a number of ongoing projects for building roads, establishing telecom services, putting up power transmission lines and digging wells for agriculture, particularly in the Herat region. About 400 Tata and Ashok Leyland buses have also been given to the Transport Department apart from a number of trucks to the Kabul Municipality. Till now $600 million has been set apart from the Indian Government's aid budget for projects in Afghanistan. India is a country Afghans admire and respect; they're grateful that a country with limited resources and its own plethora of problems is engaged in helping the troubled Central Asian nation. There is quite a rush for visas at the embassy in Kabul, and along with the four consulates in Kandahar, Mazare Sharif, Herat and Jalalabad, it issues over 100 visas a day. Many Afghans want to visit India for health consultation and, of course, for exploring business opportunities. "Most of the green tea you drink here comes from Amritsar and Ariana continues to operate a cargo flight between Amritsar and Kabul; Amritsar used to be the major trading outpost from where trade to Afghanistan used to be managed in earlier days." Automobile parts also come from India, particularly tyres for their buses and trucks, not by air, but through sea via Dubai. On the kind of business opportunities available in Afghanistan, Mr Sood said as massive reconstruction was taking place, there were opportunities in building roads; already Shapurji Pallonji and another Hyderabad-based company were engaged in building roads around Kabul, Herat and Kandahar. "It is going to be a massive reconstruction effort in Afghanistan over the next 10 years, and virtually all the cement that Afghanistan uses today is imported. Afghanistan has the best raw material to produce cement; they have both lime and gypsum of very high quality." Any cement plants put up here would have a captive market for 5-10 years with export possibilities beyond that. Agro processing is another major opportunity because Afghanistan produces so much of fruit and dry fruit - India is the biggest importer of Afghanistan's dry fruit - and in many areas in and around Kandahar, which is known as the fruit bowl of Afghanistan, fruits rot because there is no cold storage facility. "We're putting up a 5,000-tonne cold storage plant at a cost of $1.5 million which will be the first cold storage plant in Afghanistan," said Mr Sood explaining that in the absence of storage facilities, the fruit growers were compelled to sell their produce at throw away prices, particularly fruits like pomegranates, apples and grapes, to Pakistani merchants from Quetta, who then packaged and processed the fruits for the export markets. Fitted with its own power generating system, the plant will be operational in six weeks. While this plant would provide an impetus for building an agro processing industry in Afghanistan, many more opportunities in the agro-processing area would come up. The Indian ambassador added that the mining industry of Afghanistan was another area were opportunities would be available. "They are now developing new laws on mining and exploring foreign participation with extracting industries. They have natural gas reserves and in the old days used to export gas to Central Asian countries. But now they are looking at the prospect of having a 300-MW gas power project." Indian FMCG products would find a good market in Afghanistan but needed a land route to be viable and competitive. "Obviously they can't be brought by air. If brought in by sea, they have to be shipped to Bandar Abbas in Iran and then brought by road." The best route would be the land road across Pakistan, and Mr Karzai has taken up this issue with the Pakistan President, Gen Pervez Musharraf, "and his ministers with their Pakistani counterparts, but so far Pakistan has not been forthcoming on this issue. But Mr Karzai has a vision of Afghanistan reclaiming the strategic position it once had at the crossroads of the various transit routes... the Persian empire on one side and the Chinese on the other," said Mr Sood, adding that the Embassy was in touch with the CII to explore various business opportunities in the country.
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