Transport Connectivity including Transit Facilitation in Southern Asia

Country Presentation: Nepal

Nepal

Nepal in South Asia

Nepal at a Glance

Situated between China and India

( Landlocked country)

147,181 sq km of area

Population as per 2011 Census: 26.62 millions

Birthplace of “Lord Buddha”

A Himalayan sangrila where 8 of 14 highest peaks on globe lies (altitude more than 8000 m, including Mt. EVEREST)

A mountainous country (only 17% of flat land)

National transport Policy Initiatives

the National Transport Policy, 1998 states

...........Cross border, regional and sub-regional transport and transit facilities shall be further developed and expanded.

.........New international airport as an International Hub shall be constructed with the arrangement of precision landing, landing and take-off entirely within own airspace, constructing of a parallel main runway, if necessary. Such airport shall act in the development of tourism and promotion of international air cargo services (trade).

..........Construction of existing rail services shall be expanded and developed in coordination with the Indian rail way service.

Cross- Border Transit Transport by

Land

Background and Transit Issues

◦ Nepal sandwitched between India and China lacks the access of seaport.

◦ deprives the competitive global business (absence of sea port) the extra transit cost, is high up to 40% in Nepal’s case that inflates the price of commedities in import and export.

◦ Afghanistan depends on the ports Pakistan and Iran for its overseas freight traffic whereas Nepal and Bhutan solely use Indian ports for their overseas trade:

◦ Nepal uses Kolkata port and Haldiya port and Bhutan uses Kolkata port.

Nepal's Trade Balance with Some South and

South- West Asian Countries in 2011/12

Country Export Import Trade

Balance

Afghanistan 97.88 0.29 97.58

Bangladesh 2,578 1,502 1,075

Bhutan 543 249 294

India 50,933 321,346 -270,413

Pakistan 225 266 -40

(Rs. in millions )

* Estimated

Sources: Nepal Rastra bank

Legal instruments for Cross- Border trade and Transit Transport

by Road

1. Bilateral Trade Agreement with:

Nepal – India Transit Treaty, 2006

Trade and Transit Treaty between Nepal and China

Nepal Bangladesh Transit Treaty, 1976

Transit right of LDC related UN conventions 1980, 1991 and 2001,

Trade and Transit right as managed in Law of Sea 1958, 1982

WTO, BIMSTEC,SAFTA (Nepal's bilateral Trade Agreement

between 17 countries and Nepal's accession to the WTO, April,

2004)

BIPPA agreement concluded with 10 countries including India

Double Taxation Avoidance Agreement (TAA) with India

2. SAARC Agreement on Mutual Administrative Assistance in

Customs Matters

Main Corridors for Cross-Border Transit Transport by Road

Trade and Transit by Road

India-Nepal: 27 Bilateral trading points in Indo-Nepal

border (Treaty of Trade)

China-Nepal: 3 international and 3 bilateral trade

point

Transit Route India and Bangladesh

Kolkota/Haldia Sea Port for 3rd country trade

connecting with 15 Nepal-India Routes

Phulbari-Banglabandh Transit to Bangladesh

Trade Corridors and Transport linkages

Roads along South to North sides-

◦ Raxaul(India)- Birgunj (Nepal)- Hetaunda- Narayanghat- Kathmandu- Tatopani

(China Border) AH42

◦ Kathmandu- Galchhi- Rasuwagadhi- Kerung

Mahendra highway

◦ 1027 km from Kakarbhitta border to Mahendranagar border (AH2)

◦ Missing link at the west Mahendranagar (Nepal)- Banabasa (India),

◦ Poor conditioned road in East side Phoolbari

Trading Points and Transport corridor

◦ 27 Trade & Transport Links along the border of Nepal and India

◦ 3 trade & Transport Links along the border of Nepal and China

• A missing link on the AH

2 exists. Connection

beyond Mahendra Nagar

via Brahmadev Mandi

through Tanakpur (India)

and Banbasa does not

exist.

• The Government of India

has taken inititiative to

support and construct this

portion of the alignment.

• The detailed design

works is complete and

land compensation has

been distributed. No

progress has been made

for a long time (almost a

decade).

Description Distance

KM. Asian

Highway SASEC

Corridor SAARC

Corridor

Birgunj- Kathmandu- Kodari 297 AH42 No. 1 No.2

Kakarbhitta- Brahmadevmandi 1027 AH02 No.5 No.4

Cross-Border Trading Points

Bangladesh

China

India

NEPAL

Regional Connectivity and possible transit Corridors of

Nepal

1. Asian Highway Network (East- west link Mahendra

Highway AH 02 and North – South link Kodari – Raxaul

AH 42).

1. North- South trade and transit corridors(future possibilities)

i. Mohana-Dhangadi-Ataria-Baitadi-Darchula-Tinker 415 Km

ii. Nepalgunj-Surkhet-Jumla-Hilsa-Yari-Purang 581 KM

iii. Bhairahawa-Pokhara-Jomsom-Lizhi 467 KM

iv. Birgunj-Galchi-Rasua-Syafrubesi 340 KM

v. Birgunj-Naubise-Kathmandu-Tatopani-Nyalam 393 KM

vi. Janakpur-Dolakha-Lamabagar-China border 295 KM

vii. Rani-Itahari-Hile-Kimathanka-China border 419 KM

viii. Kechana-Taplejung-Olangchungola 460 KM

SAARC Regional Multimodal Transport Corridors (SRMTC)

The identified SRMTC that have strong relevant and importance to Nepal:

I. Road corridor 2: Kathmandu-Birgunj-Kolkata-Haldia (1,323 km)

II. Road Corridor 4: Kathmandu Mongla and Chittagong via Fulbari Banglabandha

III. Road Corridor 7: Kathmandu-New Delhi-Lahore-Karachi (2,643 km)

IV. Road Corridor 10: Kathmandu-Bhairwhawa-Lucknow,

V. Rail corridor : Birgunj-Kokata/Haldia

VI. Rail corridor: Birgunj-Mongla/Chittagong via Katihar Rohanpur

Current Status of Cross-Border Operations of Freight and Passengers by Rail

Railway transit route from Nepal to Kolkata SAARC Rail Routes (Bangladesh)

•Jayangar in India to Janakpur 42 km old narrow gauge

•The Raxaul and Birgunj ICD in Nepal, a 5.4 km for

freight.

Cross-Border Operations for Freight

and Passengers by Rail 50% of the import in containers by rail from Kolkata to Birgunj.

Nearly 5% of import in containers arriving by rail at Raxaul originate from Chittagong.

While there is a rail link from Chittagong to Dhaka ICD, it is not possible to transit completely by rail to Nepal.

Legal Arrangements for Cross Border Rail

Operations

Nepal India Railway agreement in May 2004

Need to review in every 5 year

The existing railway agreement signed in 2004

allows limited movement of rail Cargo between

Birgunj ICD and Kolkata and Haldiya ports of

India.

Existing and Planned Railroad connectivity

I. Existing: Janakpur- Jayanagar Railway of 26 Km.

II. Under Construction: Bardibas-Simara section (108 km) of East west Rail Network.

iii. Under DPR:

East- West Electricfied railway traversing the country (945 Km)

Kathmandu – Tamsaria link

Kathmandu Pokhara link

6 connections with Indian Rail Network

Transport transit and facilitation measures

Facilities at the Border 27 traditional check post at border and five Inland Clearance Depots (ICDs) at:

◦ Birgunj (rail, India);

◦ Biratnagar (road, India);

◦ Bhairahawa (road, India);

◦ Kakadbhitta (road, India); and

◦ Tatopani (road, China).

• Feasibility study has been done for the construction of dry port in Sharalahi,

Rajbiraj, Gaur and Maheshpur Customs .

• Integrated check post construction in Birantagar, Birgunj, Nepalgunj and

Bhairawa customs under process.

Transport Facilitation Measures – Inland Container Depot

Proposed ICD

Key Challenges of Trade Facilitation and transit transport

in Nepal

Provision of multimodal transport facility

Investment in infrastructure hardware as well as software

Quality of roads and railways infrastructure and service

Gauge compatibility for railways

Border facilities including customs, infrastructure

Use of ICT in trade administration

Quality control/quarantine related issue

Illegal trade regulation

Thank you very much for

your time !!!