BBIN Motor Vehicle Agreement: An Initiative for improving South-Asian Regional Cooperation
October 08, 2021
01 March, 2017
Nepal is one among the 48 least-developed countries and 44 landlocked countries in the world. To transform the status of ‘landlocked’ to ‘land-linked’, Nepal requires ‘connectivity-driven strategy’ with accessible, advance and affordable transport connectivity. It will promote trade, tourism, investment, mitigates unemployment and poverty and contributes to the overall economic development of the country. Railway connectivity is considered as the most economic and fastest means of transportation for the movement of freight and passenger traffic. The development of railway line in Nepal is still at a nascent stage. But, to address the sluggish economic growth of the country, one high priority area of Nepal’s infrastructure focus should be implementation of internal and cross-border railways connectivity plans and policies.
In the economic front, Nepal had set the target for graduating from Least Developed Countries (LDCs) to Developing Countries by 2022 and middle-income country by 2030. While possessing the abundant resources, for instance, feasible but untapped hydropower potential about 42,000 MW, Nepal is still trapped in fragile economic structure. It’s unfortunate that the more than quarter (29.6%) to the GDP of the country in fiscal year 2014/2015, according to Nepal Rastra Bank (NRB). While being one of the famous tourist destinations for like trekking, expedition, pilgrimage and other adventures only 700 thousand tourists per year had visited Nepal from 2010-2014, which has contributed only 2.8% to GDP in the fiscal year 2014/15. In the meantime, Nepal’s economy is expected to grow by 4.8% in FY 2017. Simply, the infrastructural development is instrumental for the economic prosperity of the country.
According to World Bank’s Doing Business report, Nepal stands in the second position, after Bhutan, in terms of ease of doing business ranking in South Asia, with 66.41 DTF (Distance to Frontier) Score.With the fairly amicable environment for investment there are ample of areas for FDI in Nepal including hydropower, industrial manufacturing, tourism and other services, construction, agriculture, minerals and energy. For 2017, in terms of service and value, Nepal is the world’s number one travel destination. The exploitation of the resources of a country's comparative advantage is paramount to overcome the economic fragility.
The infrastructure development is the key to the inclusive economic growth and poverty alleviation, while consideration should be also made for inclusive infrastructure development so as to avoid uneven economic growth. The development of resilient transportation infrastructure within and beyond the border of Nepal is pivotal to address the dire situation of deficit in infrastructure development of the country? inter alia including energy, communication.
Railways Connectivity within the Country
Nepal has long felt the imperative railway infrastructure development and has been trying to pave a way to it. The DPR for Mechi- Mahakali Electric Railway (945 km)is regarded as Nepal’s backbone for transportation, while feasibility studies of Bardibas- Simara, Simara – Tamsariya and Tamsariya – Butwal and Nijgadh – Hetauda – Bharatpur (alternative route to Simara – Tamsariya) has been completed. The government of Nepal had also allocated the budget in FY2015/16, to conduct the DPR for Rasuwagadhi-Kathmandu-Pokhara-Lumbini Railway link. The memorandum of Understanding (MOU) signed between Kathmandu Metropolitan City and Cimex INC Pvt Ltd to conduct the feasibility study of ‘sky rail system’ in Kathmandu and call for EOI from Nepal government to perform feasibility study of Kathmandu - Birgunj Electrified Railway Line, are the fresh development in domestic railways connectivity.
Internationally Proposed Railways Connectivity Proposal to Nepal
In 2011, India and Nepal had agreed for establishing the five broad gauge railway lines; including New Jalpaiguri-Kakarbhitta, Nautanwa-Bhairahawa, Jogbani-Biratnagar (17.65km), Jaynagar-Janakpur- Bardibas(71km) and Rupaidiha-Nepalgunj. In addition, India has proposed a ‘preliminary engineering and traffic survey’ of two new cross-border railways--Barahani (Uttar Pradesh)-Kathmandu and Kushinagar-Kapilvastu. By November 2017,29 km Jayanagar-Janakpur railway stretch, of Jayanagar-Janakpur-Bijalpura-Bardibas railway project (worth 5.48 billion INR), is expected to be completed.While, the plan to upgrade the Jayanagar-Janakpur railway track in a broad-gauge line by June 2017, looks improbable, land acquisition has not been started at other three railway projects. Recently, India has also forwarded a plan to develop regional railway connectivity circuit connecting Nepal, Bhutan, Bangladesh and Myanmar. Nepal and India enjoy an excellent bilateral relationship. India is Nepal’s largest trading partner, which accounts for more than 60% of Nepal’s trade. The timely completion of cross-border railways link stimulate the trade, tourism, investment between two countries and may also be helpful for Nepal to manage its trade deficit with India.
The distance between Nepal-Bangladesh is only 27 km, divided by the Siliguri Corridor. The Trade and Payments and Transit Agreements signed in April 1976, could be regarded as the formal commencement of the connectivity between Nepal and Bangladesh? the agreements agreed to provide six transit facilities including the port of Mangola and Chittagong of Bangladesh to Nepal. The 2010 joint communiqué between India and Bangladesh agreed that Rohanpur–Singabad broad gauge railway link would be available for transit to Nepal, the railway line is linked up to the Indian border near Birgunj and Biratnagar of Nepal. The national railway line project of Bangladesh in Khulan is targeted to be completed by 2018, creating connectivity between Khulna and which Mongla. It has been observed that the prospect of Mongla-Khulna-Rohanpur-Katihar-Biratnagar railway link will be mutually beneficial for Bangladesh, India and Nepal- the distance from Khulan to Biratnagar is 561 km, whereas Kolkata-Biratnagar is 600 km.
China had already completed its railway connectivity from Lasha to Shigatse and has planned for completing Shigatse-Kyirong railway line by 2020. Shigatse is 500 km and Kyirong 26 km from the Nepali border of Rasuwagadhi.
Nepal’s International Connectivity Conundrum
Nepal’s geographical positioning, in between the two economic powerhouses and emerging powers has presented enormous opportunities for the prosperity of the country. The notion of Nepal’s foreign policy discourse had been shifted from “Nepal is the Yam between two boulders” to ‘Bridge’connecting the two of the world largest economies. For instance, articulation of late king Birendra to develop Nepal as a gateway between south and central Asia, formal declaration from former king Gyanendra developing Nepal as a transit point between China and India, ‘vibrant bridge’ concept by former prime minister Dr. Baburam Bhattrai and PM Prachanda proposal of trilateral cooperation among India, Nepal and China? in all of them connectivity at center of the discourse.
In a broader spectrum, issue of connectivity beyond the border not merely comprises the economic dimension; it is also greatly entangled in the geopolitical conundrum? power politics, ‘sphere of influence, likewise perceived or real threat of immediate neighbors plays an imperative role. The country faces hurdles to achieve its economic prosperity without acknowledging these facets of geopolitical and geostrategic conundrum.
Both India and China have focused on improving connectivity with its neighbors, but they are also entangled in geopolitical contestation. In such circumstances, Nepal’s has to deal with the optimum level of pragmatism possible in order to address the geopolitical sensitivity and genuine concerns of immediate neighbours. It is also pivotal to conduct rational discourse and forge higher level domestic consensus also to interlink the country with internationally connectivity which is absolutely necessary for Nepal in accomplishing its aspiration becoming the vibrant bridge between the two giant neighbors.
While on other hands, Nepal’s internal railway connectivity should be also be assigned high priority. The development of the internal and external expansion of railway connectivity infrastructure is essential to boost the trade, attract investment and promote tourism, It is instrumental to support Nepal to escape out from the vicious circle of underdevelopment.
-This article was originally published in the Nepal Infrastructure Summit 2017 SOUVENIR
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October 08, 2021
March 17, 2020