China’s Qinghai-Tibet railway may not boast a bullet train, but the tracks are being laid down at breakneck speed and will be at the Nepal border in Rasuwa by 2020. On the Nepal side the highway and facilities are rudimentary, and the government hopes to upgrade the highway and construct a dry port.
Work on establishing new transport connectivity between Nepal and China is the result of two disasters: the earthquake that damaged the Kodari border link, and the Indian blockade that woke up politicians in Kathmandu to the need to have an alternative trade access route.
China has already extended the world’s highest railway line from Golmud to Lhasa to Xigatse, and plans to bring it down to Kerung, which is only 25 km north of the Rasuwa Gadi border (see map). Last month, a freight train made the 2,500 km journey from Lanzhou in central China to Xigatse with 86 containers bound for Nepal. The containers were later transported to Kerung and on to Kathmandu by road.
At the moment, the contrast between the two sides of the border could not be more stark. While there is an imposing seven-storey block on the Chinese side of the Bhote Kosi River, there are only blue tin huts in Nepal.
Not to be outdone, the Department of Urban Development and Building Construction (DUDBC) has issued a tender notice to also build a seven-storey block to house the customs, immigration, quarantine and other offices.
“We want to be ready when the Chinese rail arrives in Kerung. When the Kathmandu-Rasuwa Gadi road is expanded, the volume of trade through this border point will escalate and we will need a high-end integrated border checkpoint, so this building is for the future,” says Surya Prasad Sedai, Director of the Department of Customs.
The highway linking Galchhi on the Prithvi Highway to the Rasuwa border is also being upgraded. The Nepal Army is already working to widen the 18 km dirt track from Mailung to Syabrubesi, the Department of Roads is upgrading the 45 km Galchhi-Mailung section, and the Chinese are getting ready to fix the last 17 km stretch from Syabrubesi to the border. “If an Environmental Impact Assessment is conducted in time and the necessary budget is allocated, we will open this track within two years,” says Major Sanjay KC who is in charge of the Nepal Army’s road taskforce. “We are confident it can be completed by the time the train arrives in Kerung.”
The alignment of the Mailung-Syabrubesi track was to follow the right bank of the Bhote Kosi, but was shifted because there are four hydropower projects coming up on the river, including the 216MW Upper Trisuli-1 and the 60MW Trisuli-3A. The projects will all benefit from the infrastructure upgrades.
The construction of the new customs-immigration-quarantine office is expected to cost more than Rs 850 million and to be finished by 2019. This building is coming up at the exact spot where last April’s earthquake set off a huge rockfall and buried the customs office, killing four persons. “The mountain is still unstable so we are constructing a concrete buttress to protect the new building, which will be safe from rockfalls and landslides,” explained DUDBC engineer Macha Kaji Maharjan.
After the earthquake, the Rasuwa Gadi-Kerung check-point was closed for more than six months. Not only had the earthquake damaged the customs office but the road to Trisuli was blocked as a result of landslides. The earthquake also obstructed the Kodari checkpoint, which was at that time the busiest road crossing between Nepal and China.
It was the Indian blockade and the shortages of fuel and essential goods that injected a sense of urgency in Kathmandu to expedite reopening the road links to China. Kathmandu requested Beijing to help restart the border points. Beijing acted quickly to do so at the Rasuwa Gadi-Kerung border, but has so far kept Kodari sealed even though the earthquake damage there has been repaired.
As Nepal reeled under a severe fuel shortage, China’s symbolic donation of 1,000 tons of fuel was brought in through Rasuwa Gadi. Nepali traders also quickly switched to importing Chinese goods through this border point. The Department of Customs — which collected only Rs 240 million in revenue at Rasuwa Gadi in 2015 — has already raised Rs 1.54 billion in taxes in the first five months of 2016 alone.
This trade is expected to soar once the train arrives at the border, and in preparation Nepal is also building a dry port at Timure, 3 km south of the border. The Ministry of Commerce and Supplies has set up the Inter-Modal Transport Development Board to build this dry point. Executive Director Laxman Basnet told us: “We have acquired the land and will begin construction by the end of 2016 and complete it in three years.”
The Board is looking at the Timure dry port as being a customs point not only for Nepal, but for the entire South Asia region. The hope is that once the train arrives, Chinese goods bound for India and Bangladesh will also use this shortcut via Nepal. Shipments of Chinese goods to Nepal via Kolkata port can take up to 35 days, while it can reach Nepal in 10 days via Kerung.
More than 150 Chinese traders and tourists are crossing over into Nepal from the new border point every day.
However, Nepali traders are still finding it difficult to cross over into China, and have to rely on local drivers from Rasuwa to transport goods from Kerung.
Says Ramesh Baral of the Nepal-China Businessmen Association: “The Chinese give one-day entry passes to Rasuwa locals, but not to all Nepali traders. This is not good for free trade. It has to change.”
Why is Kodari still closed?
Nepal’s most important trade route with China via Kodari was damaged by last year’s earthquake. After the Indian blockade, Nepal repeatedly requested China at the highest level to reopen this route, but despite its assurances Beijing has not made moves to do so.
“The Kodari Highway is no longer obstructed by earthquake-triggered landslides, and our office at Tatopani is in operation, but the Chinese are not allowing the cargo trucks to cross over into Nepal,” said Dibya Raj Pokhrel, chief of the Department of Customs at Tatopani.
In March, when Prime Minister KP Oli visited Beijing, Nepal and China signed a 10-point agreement on trade and transit. But Oli failed to convince the Chinese leadership to reopen the Kodari Highway.
China is reportedly worried that Kodari was a conduit for free-Tibet activists and wants to keep it sealed, preferring to make Kerung — where the movement of people is easier to control — the new entry point. Chinese officials cite the damage caused by the earthquake and the continuing danger of landslides as the reason for the closure of Kodari.
Last week, the Ministry of Foreign Affairs (MoFA) sent a letter to the Chinese government requesting the resumption of movement of people and goods through Kodari. Said MoFA’s Jhabindra Aryal: “We are still waiting for a response from China. We have proposed to set up a mechanism to clear backed-up cargo even if customs, immigration and quarantine offices cannot be restored immediately.”
