Nepal’s Connectivity With Neighbours

Upendra Gautam

With the stable government in place Nepal is putting its best foot forward to achieve inclusive growth. After the promulgation of the new constitution 2015, Nepal has completed elections of all three tiers of government-local, provincial and central under a federal system. With the new central government constituted by the two-thirds vote of the central parliament, the country has been steadily attempting to adopt an independent foreign policy. This policy starts with the immediate neighbours. One key characteristic of this policy is to try its best to avoid historical confusion and compromises that were created by messing up of one bilateral relation with another.

In this context, Nepal took a step forward when it agreed to cooperate with China under the framework of the Belt and Road Initiative (BRI). The BRI as cooperation facilitation and financing mechanism for creation of significant public goods supports Nepal’s connectivity requirements. The 2016 Transit Transport Deal with China and protocol to implement it, have given Nepal much needed access to China’s four sea and three dry ports. Nepal took the collaboration one step further when it signed several agreements on infrastructure construction with China. These instruments have the potential of transforming the age-old traditional bilateral ties into a strategic partnership that serves the mutual needs of the 21st century.
Assuming Prime Minister Oli’s great push towards China, India wished to improve relations with Oli. During Oli’s second visit to India in April 2018, new deals with India were concluded. It is good for Nepal that apparently, India was getting friendly. China and Nepal lack in modern and reliable all-weather land-based connectivity. The first road between China’s Tibet and Nepal was built in mid 1960s. After 45 years, a second road linked Gilong (Kerung) in Tibet with Nepal. But these road links have been facing upgrading and maintenance tasks especially on the Nepali side. Though in recent times, airways and optic fibre-based communication between two countries are established, surging number of Chinese tourists find 90 weekly flights between the two countries quite inadequate.
Need of green energy and railway links was articulated by the leadership of the two countries in 2016, As a matter of fact, Nepal’s Trans-Himalayan railway dream had started to gallop right after arrival of rail to Lhasa in 2006. China Railway First Survey and Design Institute has completed the pre-feasibility study of the Kathmandu-Kerung railway. They have agreed to prepare the detail study of the project. Nepal Department of Railways estimates that this study will take about one and half years. Pre-feasibility study has projected the total length of the railway inside the Nepali territory to be 72 kilometres. The indicative project cost is Rs. 257 billion. It will take around nine years for the project to complete.
A Trans-Himalayan transmission line will provide reliable energy to the railway project. A joint technical team of State-owned Nepal Electricity Authority and State Grid Corporation of China have decided to prepare detailed project report for the construction of the 400 kV line by appointing a consultant. China has already installed a high voltage transmission line up to Shigatse, and has agreed to extend it to Kerung within one and a half years.
As only 70-km of the estimated 800-km length of the transmission line lies within Nepali territory, Nepal has asked the Chinese side to take the lead in developing the project. It has also suggested building required converting station in the Chinese side before the two transmission lines are connected. The line will significantly contribute in exchanging power between China’s Tibet Autonomous Region and Nepal. This transmission line could be further linked with the Nepal-India cross-border line proposed to be built in Rupandehi district in south Nepal with funding support from Millennium Challenge Corporation, USA.
There have been multiple ways of connectivity between India and Nepal. Existing traditional Postal ways (which are being developed into modern roadways), highways, airways, electricity grids extensively connect the two countries. The recent deals add new means of connectivity, which are in various stages of planning and development. These are inland waterways, railways including a railway between India’s Raxaul and Kathamandu and several other railways that connect border towns in the two countries, and cross border petrol and gas pipelines. India and Nepal have also been establishing tourism network and routes for religious exchanges. Moving beyond sectoral development of bilateral relations, the prime ministers of India and Nepal have directed their officials “to address outstanding matters by this September with the objective of advancing cooperation in all areas.”
Though China-Nepal-India Trans-Himalaya sub-regional development cooperation is on the horizon, India on its part likes to maintain exclusive relations with Nepal. Ram Madhav, general secretary of the ruling party in the central government of India, recently advised landlocked Nepal to adopt a “Look South policy” “for better sea connectivity.”
Chinese Vice-foreign minister Kong Xuanyou in a press briefing after the informal summit between President Xi and Prime Minister Modi in Wuhan has said, “The two sides will enhance policy coordination in their neighbourhood to discuss cooperation in the form of China-India plus one or China-India plus X”. Pragmatism has always been an asset of China. China seems willing to move ahead without a formal BRI framework in eastern Himalaya. In such a case, Delhi too has reportedly welcomed China to use India’s north-eastern corridor to access the Bay of Bengal.
China-Nepal railway line is said to be a human-technological wonder. However, interests not friendly to development of modern infrastructural connectivity in the Trans-Himalayan corridor were used to call these projects almost beyond technical feasibility. They have now raised the bogey of “financial infeasibility” or China’s “debt-trap” for countries receiving Chinese assistance. Professionals with the knowledge of such project and financing environment say that Nepali government can take care of the project finance if it actively goes for blended finance model. Nepal has to communicate with the right political level in Beijing and Lhasa for a combination of partial grant, concessional loan and investment fund. For fairness and equity, an approach for Nepal can be to mobilise finances for its part of the projects while China helps on the rest. But some concerned Nepal Ministry officials are confined to bureaucratic level and habituated to think of only grant support.
A closer scrutiny of the so-called debt-trap educates us that China has been in the forefront of respecting decision of a sovereign country. Latest Malaysian case establishes this point. Another “argument” raised against Nepal-China railway project is: in return what Nepal will be trading with China? For Nepal, the answer is simple. Connectivity projects under the Nepal-China “multi-dimensional connectivity network” are more than an economic, geo-political or merely transport-efficiency promoting project. For least developed and landlocked Nepal, modern connectivity with China significantly adds to its trade and transit security. Nepal does not need to keep all eggs in one basket, and be destined to brutally suffer when the basket lets loose.

Intimate year
President Xi is expected to effectively launch the transit and transport protocol during his anticipated visit to Nepal in 2019-after some connectivity projects are planned and designed. The traditional distances and geographical limitations are relative to technological innovation, political will and an urgent sense of duty to help out our peoples who have not only been linked by mountains and rivers but also by our common sense of a secure and prosperous neighbourhood. Chinese Ambassador to Nepal Yu Hong has described 2018 the 63rd year of the establishment of diplomatic relations between China and Nepal as a “more intimate” year for the two countries. No doubt, the extent of planning and delivery in the form of cross border electric railway will duly reflect the characteristic of the bilateral relationship.


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