China-Nepal Relationship

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Nov 30, 2017
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Source : China-Nepal Railway May Trigger Indian Response

A team of high-level Chinese officials and experts recently completed a land inspection trip in Nepal for the construction of a China-Nepal railway.

The team of 23 was led by Zheng Jian, deputy director of National Railway Administration of China, who met with the Nepali Ministry of Physical Infrastructure and Transport on November 10, after completing field trips to Gyirong, Pokhara and Lumbini.

According to the Kathmandu Post, Nepali Department of Railways spokesperson Prakash Bhakta Upadhayaya said that the Chinese team resolved many technical issues, especially geological ones.

"Altitude variation between Syaprubeshi and Gyirong and the gap created between Indian and Tibetan tectonic plates after the 2015 earthquake were major concerns. This Chinese team of experts has cleared out our concerns, paving way for development of railroads in the country," Upadhayaya told the Kathmandu Post.

He said that the Chinese team has assured the technical support required for this project. Nepal and China have also agreed to expedite cooperation in the field of cross-border railway connectivity.


Long in the making

Sun Lizhou, an international relations expert from Tsinghua University, has followed the progress of the project closely. He told the Global Times that time varies from project to project, from the moment an inspection team is sent out until construction begins.

The development of projects between China and Nepal has been affected by geopolitics.

Over the years, China and Nepal have held several rounds of talks, both formal and informal, about possible cross-border railways, especially under the Belt and Road initiative.

In 2006, Qiangba Puncog, the then-chairman of the government of China's Tibet Autonomous Region, told Sharma Oli, who was then deputy prime minister of Nepal, that the Qinghai-Tibet railway would be extended from Lhasa to Xigaze, Tibet Autonomous Region and then to the Sino-Nepalese border.

In March 2016, the Nepali prime minister signed 10 agreements with China during the Boao Forum for Asia, including plans to establish railways between the two countries.

In May 2017, during a bilateral meeting in Beijing, Chinese Vice Premier Wang Yang told Nepal's Deputy Prime Minister and Foreign Minister Krishna Bahadur Mahara that China was willing to push for the steady development of basic infrastructure projects between the two countries, such as road and railway construction.

There were further meetings between China and Nepal in September of this year, when Mahara held a bilateral delegation-level meeting with Chinese Foreign Minister Wang Yi while visiting Beijing.

Soon after this year's 19th National Congress of the Communist Party of China, a high-level Chinese delegation was dispatched to Nepal to carry out an inspection of the technical feasibility of the railway.

China's National Railway Administration said that, in Nepal, China has made developing the cross-border railway "a high priority," according to Xinhua News Agency.

On the Chinese side, the extension of the railway from Xigaze in Tibet to the China-Nepal border port of Gyirong is being carried out and will be completed by 2020.

The railway is part of China's greater plan to connect neighboring countries with roads and railways in every direction.

Foreign media outlets have commented that China is executing "railway diplomacy."

Toward the West, there are three China-Europe cargo train rails, two rails between China and Kazakhstan and discussions of a railway project connecting China, Tajikistan, Kyrgyzstan, Afghanistan and Iran.

To the South, the China-Laos railway is expected to be finished by the end of 2020, and Thailand has recently approved a China-Thailand rail to begin construction this year.


Boost in cross-border trade

For Chinese companies trading with Nepal, the most convenient means of transportation is rail shipping from cities in Tibet to the Nepal's capital, Kathmandu. The railway's extension from Xigaze to Gyirong is highly anticipated.

The Guangdong-Tibet-Central South Asia freight train was launched based on the premise that it would link China and Nepal, an official in Lhasa involved with the project, who preferred not to be named, told the Global Times in a previous report.

"The China-Nepal railway remains a bottleneck for the economic corridor of South Asia, as the most challenging part is still in Nepal," he said.

Many experts also look forward to the railway. Sun told the Global Times that if China and Nepal are connected by rail, trade volume will be increased, with China receiving an all-new market with a 29 million population.

Sun thinks inconvenient transportation is the primary reason why Nepal's economy has fallen behind other Asian nations. Presently, a 1,389-kilometer shared border separates China and Nepal, but there are only two trading posts, both on roads, along the route.

Furthermore, after the railway is completed, the development of cross-border trade between Bhutan, Bangladesh and China via Nepal will also thrive.

When Sun visited Nepal in 2016, he spoke with more than 200 people from all walks of life, asking for their honest opinions about the China-Nepal railway. Most showed their support.

Sun also believes that the China-Nepal railway will be advantageous to Nepal's national unity, as it could as it could encourage Nepal to maintain national unity and lessen its reliance on India.

"It will provide freedom and make it smoother to select suitable markets for the Nepalese. It will help Nepal to manage the trade deficit. It will play an important role to develop and flourish the trade, economic, social, cultural, religious and practical relations between China and Nepal," said Prem Sagar Poudel, Chairman of the Nepal-China Mutual Cooperation Society.

Pressure from India

When news of a Chinese surveying team arriving in Nepal got out, there was a strong response from the Indian side. There were also reports of Nepal "choosing China" as a new strategic partner so as to lower its dependence on, or "counterbalancing" against, India. Media reported the railway as "a bid to reduce landlocked Nepal's dependence on India for supplies."

Thinktank researchers in India also expressed concern that China's Qinghai-Tibet railway could impact India's national security by having the ability to send troops and war-time supplies directly to border regions.

Tsinghua's international relations expert, Sun, told the Global Times that India has been concerned about the construction of the China-Nepal railway.

"For years, India fully penetrated Nepal's government, army and main political parties, preventing Nepal from getting closer to China," he said.

Poudel told the Global Times that India doesn't want Nepal to fall out of its control.

"India clearly knows that if Nepal and China's relationship becomes strong, then India can't use Nepal's natural resources like now. They will lose the monopoly over water resources, herbs, mines etc.," he said.

Sun thinks China should push forward for the development of the project even if it makes India "a little uncomfortable."

But the continuation of the railway on Nepal's side will be affected largely by the upcoming results of Nepal's national election, he added.

"Foreign pressure and interruptions can delay the Chinese railway line project, but no one can stop this project. Its process is moving ahead in a slow motion, but it is moving continuously nonetheless," Poudel said.
 
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Construction of India-assisted Arun-III hydropower project in Nepal on fast-track
Kathmandu [Nepal], Aug 16 (ANI): The construction of Arun-III hydropower project in Nepal's Sankhuwasabha district is on fast-track as five Indian banks and two Nepali banks have committed to lend debts for construction of the 900 MW mega power project.

In February, Nabil Bank, which is one of the lenders for the project from Nepali side, signed a pact with India's Satluj Jal Vidyut Nigam (SJVN), setting a record of largest ever foreign direct investment to the Himalayan nation.

Arun-III is Nepal's largest hydro project and is being built with India's assistance.

Anil Keshari Shah, CEO of Nabil Bank said, "This type of engagement of Nepali banks during the construction of Arun-III hydropower project will test capability of Nepali banks as well as lend new experience in these types of big projects."

"Our engagement with SJVN for Arun-III has increased our aptness. Back in February, we had a financial closure which means we will be on ground to support them which in turn will be support for the whole nation," Shah said.

"Apart from experience for us, the project also provides employment to locals. As we are associated with the project, we will have the benefit that salary of employees will go through our bank. Also, the transactions for purchase of goods and materials will also be made through us. It is indeed a new experience for us," he added.
Everest Bank and Nabil Bank from Nepal agreed to provide debt of 1,536 crore Nepali rupees for the project whereas five Indian banks -- State Bank of India, Punjab National Bank, Axim Bank, and UBI have pledged 8,598 crore Nepali rupees for the same.

The total debt tied up with banks is 7,860 crore Nepali rupees plus 2,274 crore Nepali rupees as a stand-by line of credit. The SJVN Arun-3 Power Development Company Pvt. Ltd, incorporated for construction of the project on April 25, 2013, will be investing approximately 11,000 crore Nepali rupees in Nepal over the next five years.

The total investment of the project is estimated to cross Rs 115 billion, including Rs 11 billion for the development of the transmission line. With the completion of the project, Nepal will get 21.9 per cent of the total electricity produced in a year i.e. 197 MW electricity with 86 crore units for free in a year.

The foundation of Arun-III project was jointly inaugurated by Indian Prime Minister Narendra Modi and his Nepali counterpart KP Sharma Oli in May 2018. Arun-III has 3.65 hours of minimum peaking capacity envisaged for installation of four generating units of 225 MW each gives the project a total installed capacity of 900 MW.

The estimated cost of the project to be completed within five years stands at USD 1.04 billion and would produce 4,018.87 million units of electricity a year.

The project is being developed on a build-own-operate and transfer (BOOT) basis by SJVN Arun-III Power Development Company (SAPDC), a joint venture of the Government of India and the Government of Himachal Pradesh.

The SJVN signed a Memorandum of Understanding (MoU) for the execution of the project with the Government of Nepal in March 2008.

With the deal finalised and the construction in full swing, the SJVN will operate the power plant for a concession period of 30 years, following which the ownership will be transferred to the Nepal government. It will provide 21.9 per cent of free power to Nepal during the concession period.

The project is expected to generate 3,000 jobs during construction in India and Nepal together. (ANI)
 
China erects nine buildings on Nepal's land, restricts entry of Nepalese locals
China has managed to erect nine buildings on land owned by Nepal while disallowing Nepali authorities from stepping foot in the area. Reports suggest that the Chinese are talking advantage of the border standoff with India and the absence of Nepalese security forces owing to the approaching winter season to gradually capture land in the region.

The most recent incident has come to light from Nepal's Humla district where the Chinese have stealthily constructed a building in Namkhya village. In fact, work on a total of nine buildings in the same village is now complete. China did not stop there and even restricted the entry of Nepalese locals near the buildings.

According to reports, the matter first came to light when the head of the village council, Vishnu Bahadur Lama visited border areas during a routine tour. He revealed that the Chinese People's Liberation Army (PLA) has completed the construction of nine buildings in the Lapcha area of Limi village.

Vishnu Bahadur Lama said over the phone that he was stopped from entering the area. He also claimed that Chinese soldiers involved in the construction crossed over to China when he asked them questions about the buildings. Lama, who also clicked pictures of the buildings from a distance using his mobile phone, said the construction has been done two kilometers inside Nepal's side of the China-Nepal border.

I asked PLA troops about the buildings but they did not answer, he added. An old building was erected by China in the area 11 years ago.

Local elected representatives said construction of three buildings by the Chinese between Limi and Lapcha was halted after Nepal objected to road development by China in the area in 2019. However, the Chinese have now erected nine buildings which are now in the final phases of completion.

Village Council head Vishnu Bahadur Lama also claimed that locals are being stopped from entering their own lands while PLA troops are conveniently crossing over the border to participate in the construction of said buildings. When contacted, Humla chief district officer Chiranjeevi Giri said he has no knowledge of Chinese erecting buildings between Limi and Lapcha.

Now, Nepalese security forces along with measurement and survey department officials have been dispatched to the area concerned.

Neither Nepal's Home Ministry nor Foreign Ministry has issued a statement in this regard. It seems like the country's top officials are waiting for chief district officer Chiranjeevi Giri's report.

The country's foreign minister Pradeep Kumar Gyawali, however, had denied any reports of China occupying Nepal's land.