New Delhi, Oct 14 (IANS): The union cabinet on Wednesday approved the revised cost estimate for a multi-modal transit transport project passing through Myanmar that will provide an alternate access route to India's northeastern states.

"The union cabinet, chaired by Prime Minister Narendra Modi, Wednesday gave its approval for the revised cost estimate of Rs.2,904.04 crore (about Rs.29 billion) for the Kaladan Multi-Modal Transit Transport Project in Myanmar," an official statement said.

"The project will provide an alternate access route to the northeastern region of India and contribute towards the region's economic development. Being a key connectivity project, it will promote economic, commercial and strategic links between India and Myanmar," it added.

The Kaladan Multi-Modal Transit Transport Project was jointly identified by India and Myanmar to create a multi-modal mode of transport for shipment of cargo from the eastern ports of India to Myanmar as well as to the northeastern part of India through Myanmar.

This project, which will connect Sittwe port in Myanmar to the India-Myanmar border, apart from opening up the sea route for the products, will also provide a strategic link to the northeast, according to the statement.

The project, when completed, will first link the Kolkata port to the port of Sittwe in Myanmar across the Bay of Bengal, a distance of 539 km.

From Sittwe, the route will continue over river Kaladan to the western Myanmarese town of Paletwa, 158 km away.

Paletwa will then be connected to the India-Myanmar border by a 110-km-long road.

The international border will then be connected by road to the town of Lawngtlai in Mizoram 100 km away where National Highway 54 passes by.

The project includes construction of an integrated port and inland water transport (IWT) terminal at Sittwe, development of a navigational channel along river Kaladan in Myanmar from Sittwe to Paletwa, and construction of a highway transshipment terminal at Paletwa.

This apart, the project also envisages construction of six IWT barges - each of 300 tonnes capacity - for transportation of cargo between Sittwe and Paletwa.

In 2009, the Inland Waterways Authority of India (IWAI) was appointed the project development consultant by the ministry of external affairs, the nodal agency for India. On the Myanmar side, the ministry of foreign affairs is the nodal agency.

Construction work at Sittwe in Myanmar started in December 2010 but problems arose over underestimation of the road length on the Myanmar side and plans to construct hydro-electric projects on tributaries of the Kaladan river.

Though the project was earlier scheduled to be completed in 2014, Minister of State for External Affairs V.K. Singh said last year that it would now be completed by 2016.

When completed, the route will provide a viable alternative to the existing overstretched route via Siliguri in West Bengal, popularly known as the Chicken's Neck.