Nepal in talks with China to build $8 billion cross-border rail link

BEIJING Nepal is in talks with China to build a cross-border rail link that may cost up to $8 billion, and funding could be expected after Nepal formally signed up to Beijing’s Belt and Road initiative, a Nepali finance ministry official said on Sunday.

Yug Raj Pandey, an under secretary at Nepal’s Ministry of Finance, told Reuters the proposed 550 kilometre-long railway would connect China’s western Tibet region to Nepal’s capital of Kathmandu and will carry goods and passengers.

The Himalayan nation officially signed an agreement two days ago to be part of President Xi Jinping’s ambitious plan to build a new Silk Road, he said on the sidelines of the Belt and Road Forum in Beijing.

“Now we are a member of (the initiative) we can get some specific project assistance from China’s government. We expect it for the railway,” he said. “Once we connect by railway then we can increase our trade and invite more tourists to Nepal.”

Pandey said the two countries had been in discussions for the past five months about the project, which could cost $7-8 billion and take up to eight years to complete.

He said Nepal planned to start preparing a detailed project report for the railway, and that they had yet to decide how much funding they will seek from China.

The railway will travel over 400 kilometres in China to the Nepal border, and then about another 150 kilometres from the Nepali border to Kathmandu, he said.

“Our first priority is railway, and second will be hydropower projects and cross-border transmission lines between Nepal and China,” he said.

China last year agreed to consider building a railway into Nepal and to start a feasibility study for a free trade agreement with impoverished, landlocked Nepal, which has been trying to lessen its dependence on its other big neighbour India.

Pandey declined to comment about India’s opposition to parts of the Belt and Road initiative, in particular an economic corridor China is building in Pakistan.

China has touted what it formally calls the Belt and Road initiative as a new way to boost global development since Xi unveiled the plan in 2013, aiming to expand links between Asia, Africa, Europe and beyond underpinned by billions of dollars in infrastructure investment.

(Reporting by Brenda Goh; Editing by Randy Fabi)