Nepal, China may sign deal on feasibility study for cross–border railway

Wang is expected to arrive on March 26 although no official announcement has been made yet.

On Friday, Foreign Minister Narayan Khadka held the first round of consultations with various government secretaries to discuss key issues and set the agenda for the visit, according to government officials.

Over a dozen and a half secretaries from various ministries participated in the meeting held to work out the agenda for the meetings to be held with Chinese officials during the visit. Several government secretaries suggested that Nepal this time should discuss expediting past agreements signed during Chinese President Xi Jinping’s Nepal visit in 2019 instead of pitching new projects.

According to several sources, Nepal and China during the Chinese foreign minister’s visit will sign, among other things, a memorandum of understanding for conducting the feasibility study for the proposed Kerung-Kathmandu railway project.

“We have received a draft MoU for a feasibility study of the Kerung-Kathmandu railway,” said Rabindra Shrestha, secretary at the Ministry of Infrastructure and Transport. “Nepal is looking for an additional grant from China besides the amount promised earlier, to carry out the feasibility study. If the two sides consent, an MoU will be signed.”

The draft MoU describes and interprets the agreements and understandings reached during various bilateral meetings and visits in the past and consolidates them in a single agreement, and also includes technical aspects of the projects.

During Xi’s visit in 2019, Nepal and China had agreed to carry out a feasibility study of the multi-billion dollar railway project through Chinese funding. But merely two months after Xi’s visit, the Covid pandemic started leaving the agreements in limbo. As the world has yet to break free of the pandemic, the feasibility study of the Kerung-Kathmandu railway could not start.

In the first week of January, secretary Shreshta held virtual talks with senior officials of the China Railway Administration where the Chinese side had stated that it will take at least 42 months to complete the feasibility study of the railway project. A pre-feasibility study of the railway conducted in 2016 by China had stated that complicated geological terrain and laborious engineering workload will become the most significant obstacles to building the cross-border railroad.

The total investment needed for the project would be known once the feasibility study is completed, but the pre-feasibility study had estimated the cost of the railway, whose 72.25 km section will fall on the Nepali side, at $2.75 billion.

As per the pre-feasibility study report, around 98.5 percent of the railway would either be bridges or tunnels, and construction cost would be Rs3.55 billion per kilometre.

During Friday’s consultations, secretaries from various ministries gave briefings on the status of various Chinese-funded projects in Nepal. The representative of the Ministry of Physical Infrastructure and Transport had presented a long list of projects that remain pending.

Finance Secretary Madhu Marasini asked about the status of the Rs56 billion Chinese grant announced during Xi’s 2019 visit.

“We are not looking for new projects but want to implement and expedite the already agreed projects,” said Shrestha, adding that the second phase of the Ring Road widening project; feasibility study of Tokha-Chahare tunnel; construction of the Syafrubeshi-Rasuwagadhi road section; expansion of the Araniko Highway, Kimathanka-Khadbari-Biratnagar; and Hilsa-Simikot-Surkhet road projects remain suspended owing to the Covid pandemic.

The finalization of the project implementation plan of the Belt and Road Initiative (BRI) will also be on the agenda of the meetings during Wang’s visit. Nepal had signed a framework agreement on the BRI in 2017.

During Friday’s consultations, the representative of the Ministry of Commerce, and Supplies suggested that Nepal request China for a full-fledged reopening of the two major trading points, Tatopani and Rasuwagadhi, where China has tightened cargo flow for the past two years citing the Covid pandemic.

Also on the agenda will be the problems faced by Nepali medical students enrolled in Chinese universities who were forced to abandon their studies midway due to the pandemic; cooperation in energy, infrastructure, trade and commerce; exports of Nepali goods to China; resumption of border talks; and implementation of the trade and transit agreement signed in 2016 in the wake of the Indian blockade.

“We have just begun discussions and probably by Monday or Tuesday, we will be able to announce the date of the visit,” a senior official at the Foreign Ministry said.

Foreign Minister Khadka, meanwhile, said that the government is trying its best to make the visit successful and therefore all stakeholders should have a common voice on Nepal-China matters. 

Kathmandu Post