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China-Nepal Railway: Fantasy or Reality?

China-Nepal Railway: Fantasy or Reality?

Chinese workers construct a bridge at Rasuwa Gadhi on the Nepal-China border. The route runs along the proposed railway between the two countries / Credit: Nabin Baral

Tashi Sherpa runs the only teashop in Rasuwa Gadhi on the Nepal-China border, 170 kilometres north of Nepal’s capital Kathmandu. About 50 metres away, a group of Chinese workers is busy building a bridge that will link the two countries, but none of them has ever come to her teashop.

“A truck brings food every few hours from that large building on the other side [of the border]. The Chinese do two things – eat and work. They eat a lot of meat,” Sherpa said with a big smile.

Hundreds of trucks and jeeps trundle each day down the bumpy road and over a temporary bridge, carrying goods and tourists from China. While they wait to enter Tibet or take passengers to Kathmandu, the drivers sip tea and eat snacks in Sherpa’s teashop.


Trucks enter Nepal from China at Rasuwa Gadhi inland port. The Chinese Customs and Immigration office is in the background / Credit: Nabin Baral

The border here only opened after the devastating Nepal earthquake in 2015 led China to close the badly damaged Kodari route. It is also where the new railway – proposed as part of China’s ambitious Belt and Road Initiative (BRI) – will enter Nepal from Tibet.

On its side of the border, China has built a well-equipped customs and immigration office, which looks like a shopping mall. But the infrastructure on the Nepalese side is a complete mess. In 2017, when this reporter visited the area, police officers were checking visitors in a hut with a zinc roof. Two years later, conditions have not improved.

“We don’t even have a metal detector, so we have to ask each person to open their luggage and backpacks, and then check manually. A railway is beyond our imagination,” said Dilip Chhetri, the police inspector on duty at the border the day The Third Pole visited.

Since tourists visiting Mount Kailash in Tibet have started to flock through this land route, owners of newly built hotels are expecting more business in the future. The railway will be a further boost, they hope.

Not everyone has such high expectations. The 2015 earthquake destroyed Nepal’s local revenue office, but the construction of a multi-storey replacement that began in 2017 has been delayed due to a dispute with the contracting company.

“How can a country which hasn’t managed to construct a building for its officers in two years construct tunnels through these mountains and run trains? It’s no more than a fantasy,” said Finjo Lopchan, owner of Potala guesthouse in Ghattekhola, one kilometre south of the border.

“To be honest, my head spins when people talk about railways. Look at the roads here. Shameless government,” he added.


A view of Rasuwa Gadhi from the Nepal side of the border / Credit: Nabin Baral

How near is Nepal’s BRI railway?

The proposed BRI railway will link Kerung City in southern Tibet to Kathmandu, entering Nepal in Rasuwa district and eventually going on to India. But locals have dubbed the project kagat ko rail (paper railway) and sapana ko rail (dream railway).


The Kerung-Kathmandu railway is part of more ambitious plans to link China and India by rail / Source: The Conversation

People who have suffered for years along bumpy roads in the northern border region of the country laugh at the idea.

“I don’t feel excited when you talk about railways, I feel disappointed. Every day we have to drive along this scary road in our trucks and we hear news time and again about railways. I don’t understand,” said Balaram Rimal, a truck driver who regularly carries goods across the border from Kerung.

China prepared a pre-feasibility study of the railway for Nepal in late 2018. The study suggested it was an extremely hard project, but not impossible.

“Technically this will be one of the world’s toughest railways to construct,” said Paribesh Parajuli, the only railway engineer at Nepal’s railway department, who will leave once his short-term consultancy contract expires.

The Chinese study has not been made public despite intense debate over what’s happening. But Parajuli shared the findings of the report with The Third Pole. It lists “six extremes,” including topography, weather, hydrology and tectonics that, Parajuli says, will make the project hugely challenging.

About 98% of the railway on the Nepal side will be in tunnels and on bridges according to the report, with about five stopovers. Tracks will need to be built on steep terrain, as the railway climbs from an altitude of 1,400 metres in Kathmandu to about 4,000 metres in Tibet.

The proposed route also cuts through the mountains near a major fault line – where the Indian plate meets the Eurasian plate to form the Himalayas – making the area very susceptible to earthquakes.

Mitigating these risks means the project will cost far more than normal railways, Parajuli explained.

Video by Nabin Baral

Underprepared, overwhelmed

In Nepal, there are almost no preparations in place for the rail line. Consultants are currently studying another railway, the east-west railway planned in the southern plains near to India. But the state lacks people capable of reviewing their reports, much less anybody to actually lead the construction. In the decade since it was set up, Nepal’s railway department is yet to hire a single permanent railway engineer, but it hopes to construct 4,000 kilometres of rail in the next two decades.

A new 34-kilometre railway from the Indian state of Bihar to Nepal is due to start running in a few months, but the government will have to hire a train driver from India and other technicians to operate its first modern rail, according to local media reports.


A woman carrying fodder in Patibhanjyang village, in Sindhupalchowck district of central Nepal, where the proposed China-Nepal railway will turn towards Kathmandu / Credit: Nabin Baral

Where is the money?

Preliminary estimates put the costs of the railway from Kerung to Kathmandu at about 38 billion yuan (US$5.5 billion), almost equal to Nepal’s total revenue in 2018. Although only a third of the 170 kilometer-long railway falls on the Nepal side, it would account for almost half of the costs due to the extreme geology and climate.

Nepal’s railway dreams moved closer to reality after the project was listed as one of the 64 to be considered under China’s BRI during the second Belt and Road Forum in Beijing in April. But this does not guarantee any financial support to the project.

Nepal is currently seeking a grant from China to construct the railway, but China has remained reticent. The Nepal government did not allocate any money for the northern railways in its budget speech in May. But according to officials at Nepal’s infrastructure and transport ministry, a detailed study for the Kerung-Kathmandu railway will cost an estimated – five times the country’s total rail budget for the next year.

Despite the lack of committed funding, finance minister Yubaraj Khatiwada declared that Nepal “will complete the detailed project report and feasibility study and start construction work on the Kerung- Kathmandu railway in the next two years.”

The Chinese do not seem in such a rush. In 2014, the Qinghai-Tibet railway reached Shigatse in Tibet about 500 kilometres northeast of Nepal’s border. The railway was scheduled to arrive on the border at Kerung by 2020, but the Chinese have pushed that back to 2025, according to recent media reports.

Debt trap fears

At home, there are fears of the potential financial burden to the country if the railway is built. But the government has refuted the possibility that Chinese loans could push the country into a debt trap. “The main thing is how projects are selected, whether they are selected on the basis of possible returns. And what is the payback plan?” Pradip Gyawali, Nepal’s foreign minister, said in May.

While the minister could not answer questions about what Nepal would export to China by train, the prime minister, KP Oli, has suggested mineral water, already a multi-billion dollar industry in Tibet.

There are further grounds for concern. While imports from China increased by about 40% in 2018, exports from Nepal fell by 30%, with the country’s trade deficit reaching about US$12 billion last year – equal to nearly half of the country’s total GDP.

The Chinese ambassador has tried to allay fears. “The BRI is not a ‘debt trap’ that some countries may fall into, but an ‘economic pie’ that benefits the local population,” she wrote in a recent opinion piece in a Nepali newspaper.

Since the railway proposed by China runs almost entirely through remote mountains and misses nearly all the big cities on the Kathmandu-Kerung highway, however, it is unlikely that local populations will benefit.

Locals and government kept in the dark

Early one morning in the second week of May, 76-year-old Narayan Das Dongol was playing with his granddaughter in Tokha village in the northern corner of the Kathmandu valley – a proposed stop on the China-Nepal railway.

“In next few years these fields will be filled with concrete houses,” he said. “I heard that the railway is coming this way during a religious meeting, but I haven’t got any information from local authorities.”

After China declared the international border entry point in 2017, land prices have soared along the highway from Kathmandu to Rasuwa Gadhi. The railway rumours have played a part.  A decade ago the cost of land per aana (around 32 square metres) was about US$4,000, but now it’s close to US$25,000.

But there is confusion about the exact route of the railway. Everywhere we went, people had one question: “Do you know which way the railway will come?”


Video by Nabin Baral

As we waited outside the office of the mayor of Bidur – the biggest city in Nuwakot district, 75 kilometres northwest of Kathmandu ­– his driver Lok Bahadur Giri came up and said, “I have heard people say it will be built next to the current highway. Is it coming to our city?” The mayor, Sanju Pandit, also thinks the railway may be built along the highway to China where his city serves as a major stopover.

“I have heard that the railway will cross this city, but we haven’t been consulted or informed about it at all,” Pandit said.

The route proposed by the Chinese does not, in fact, align with the existing highway but will cross the mountains through tunnels, according to the pre-feasibility report. “So major cities on the existing highway won’t be even able to see the railway,” Parajuli, the railway engineer, said.

Video by Nabin Baral

What about environmental and biodiversity impacts?

The railway will pass through two national parks – Langtang and Shivapuri. Langtang boasts endangered and vulnerable species like the red panda and snow leopard, while Shivapuri – on the northern side of Kathmandu – is home to over 300 bird species and one-third of the country’s total bird population. Yet while economic, political and technical issues dominate railway discussions, environmental impacts are not even on the radar.

Staff at Nepal’s National Park and Wildlife Conservation Department say they’re concerned that illegal wildlife smuggling could increase along the railway route. But the field office is severely under-resourced.

“I was monitoring trucks entering Tibet and one driver was attaching a small bundle on the walls of the trucks and seemed suspicious,” staff member Lalan Pandit said when sharing an experience from last year. “As we rushed to the truck the driver jumped into the river. We finally got him back and found that he was trying to smuggle tiger bones.”


A truck driver waiting to enter China at the Rasuwa Gadhi border port / Credit: Nabin Baral

It is not possible for the staff to monitor the hundreds of trucks and people crossing the border every day with current resources, Pandit explained. More than 100 people were arrested in Nepal in 2016-17 for smuggling wildlife parts, mostly to China.

Park officials in Kathmandu said they have not been consulted about the railway yet, but they are hoping to get involved in a planned feasibility study that has yet to start since neither China nor Nepal have committed to fund it. 

“As it is a major infrastructure project there are serious concerns regarding biodiversity and environmental issues so we will engage once the government asks us for permission to conduct further study for the railways,” said Bishnu Prasad Shrestha, spokesperson at the department of national parks and wildlife conservation.

Timeline: Nepal’s BRI railway

2017 – Nepal and China sign a memorandum on Belt and Road cooperation ahead of the first Belt and Road Forum in May.

2018 – Nepal forms two committees headed by the foreign secretary and finance secretary to propose projects for China to fund under the BRI.

2018 – Nepal’s prime minister, K.P. Oli, visits China and signs 14 bilateral agreements, including one on railway cooperation.

2018 – China conducts a pre-feasibility study for the cross-border railway from Kerung to Kathmandu.

2019 – The Nepal-China cross-border railway is listed as part of the Trans-Himalayan connectivity network in the leaders’ forum issued at the second BRI Forum in Beijing in April.

2019 – Nepal’s government declares during its budget speech that construction on the railway will start in the next two years. Officials do not allocate an appropriate budget for a detailed study.


This story originally appeared in The Third Pole on June 18, 2019.