Rana regime is credited for saving the country from British colonization but this made it lose a chance to modernize. At the time of winding down of Rana regime in 1950, Nepal had no road system to speak of; one 50-km ropeway-line; and two single-track rail lines of about 80-km in total length. Indian railway lines came close to Nepal border at several points along the 800-km border but, except at two places, it didn’t connect to rail or road links going into Nepal.
There is no historical evidence of why Nepal didn’t choose to develop rail links with India, which probably would have provided it with the cheapest and most accessible means of transport, at least in the flatland areas of the country, and helped open up the region for travel and trade with the vast Indian subcontinent. One reason may be that Nepal Government had no funding for such a venture—it collected just 5 percent equivalent of Gross Domestic Product in taxes, adequate to cover administrative expenses and fund privy purses for the Rana family. Also, unlike India, Nepal cannot access the world’s capital market to borrow funds for investment, the main financing source for railway development in India and in many countries of the world.
However, looking at other options, there is no reason to believe that British would have been ungenerous to Nepal’s request for funding the railway venture, either as outright grant, or through loan funding of the project by underwriting Nepal Government’s bonds floated in world’s capital markets. There was a high probability of the British Government extending generous help to Nepal if it had wished to develop the railways. Railway development also could have served British interests by providing it access to an untapped market in Nepal and to Nepal’s abundant forest resources. At the same time, there was no political threat to Nepal from closer ties with the British, because British Government was happy with Rana regime as long as it kept the monarchy and defended country’s northern borders with Tibet.
In historical perspective, Nepal Government’s reluctance to develop its rail system—and transport system in general—was a calculated state policy decision that offered protection to Rana rulers, against visible and invisible threats to the regime if the country is made accessible to outsiders.
Lopsided development
Looking back as far as 40 years, there is no evidence of any government initiative taken to maintain, upgrade, or expand the country’s rail system, even though a fairly worked-up cost-benefit analysis would show a rate of return from railway development at least twice that of any other competing modes of transport.
Looking at more than half a century of development planning starting in the 1950s, transport infrastructure has been on the front burner of the country’s growth strategy, taking up a lion’s share of development resources. This is very much expected and is also typical of countries in the early phases of economic transition. A cost-effective public transport system is a critical input in the growth process, and also that a well-developed transport system carries immense externalities—in terms its spread-out effects benefiting rest of the economy.
It then is only natural for the government to provide generous funding for transport sector development, which actually has been the case during budget allocations and in setting up of plan priorities. However, the sectoral allocations have focused almost entirely on the roads sector, with almost a total absence of provisions for other alternative modes of transport, principally railways.
Nepal’s existing rail system is not new—it has almost an 80-years-old history. The two narrow gauge rail tracks mentioned above were built in the early 1930s—one about 30-km track connecting Raxaul in India to Amlekhgunj in Nepal to the north—an access point to foot tracks then connecting it to Kathmandu. Another system comprised a 51-km track from the Indian border town of Jayanagar to Bijalpura, through the town of Janakpur in southeastern part of the country. Amlekhgunj track has been non-operational since the 1970s and is now largely abandoned. In the Janakpur sector, just about half the track length is in use, the rest of it in decay and largely abandoned. The operational 29-km track, along with the rolling stocks, workshops, and passenger service infrastructure are worn-out beyond belief and is utterly unsafe for passenger traffic.
Looking back as far as 40 years, there is no evidence of any government initiative taken to maintain, upgrade, or expand the country’s rail system, even though a fairly worked-up cost-benefit analysis would show a rate of return from railway development at least twice that of any other competing modes of transport, including the most favored road system. My own assessment is that major foreign donors to the country helping infrastructure development—World Bank and ADB in particular—have not been presented a plan for development of the rail sector, either for maintaining and upgrading the existing system or building additional track.
There are further doubts whether foreign donor agencies have been made aware of the potential for railway development in the country, because they have come to believe that country’s mountainous topography makes it infeasible and costly for the development of a rail network. For example, one recent World Report states that “…because of its mainly mountainous terrain and difficult weather conditions, roads and aviation are the major modes of transportation in the country. The presence of railways is negligible…”
Nothing can be further from truth. There is at least one third of the country’s surface area made of flat plains which is eminently suited for railway development. Additionally, this flat region is heavily populated, about twice the average density nationwide, which makes it highly attractive for all sorts of public transport development.
Besides the economics of it, non-economic benefits of a rail system are huge compared with the heavily preferred road system. Rail roads are less polluting to the environment than an equivalent amount of traffic carried by road transport. Also, the risks of soil erosion and damage to vegetation in the hill region are much lower from the construction of a railway line than from the building of roads. In terms of energy use, a rail system can all be run on electricity, much of it derived from local energy sources, while road transport is a heavy user of imported oil. Further foreign exchange saving can come from lower imports of cars and trucks and of vehicle parts. Lastly, the incidence of traffic fatalities is much lower for rail transport than for any other mode of transport, in terms of per passenger travel-mile.
Fear of India—again!
Despite such obvious advantages of railway transport, why then its development is so thoroughly neglected and, more likely, not been considered as an option? My own assessment of this very absurd situation is the continuation of isolationist policies of the Rana period—narrowed down now to India-phobia.
Looking at the sheer neglect, even hostility to railway development all through Nepal’s recent history, the theme about India-phobia gets much stronger. Nepal Government—of all shades and persuasions—has come to believe that a rail link with India will erase any remaining differences between the two countries, making its control over border crossings hopelessly impossible. This level of inseparability will be an economic boon for Nepal, ensuing from lower transport cost and access to enormous Indian market, but at the risk of loss of country’s unique existence, Indian dominance of the economy, and a much toned down assertion of independence and sovereignty.
Despite such reservations about the development of a rail system, it now appears that Nepal Government can’t resist it any longer. There is a serious offer of help from India to rebuild and expand existing facilities of Janakpur Railway, at an estimated cost of 4.7 billon Indian rupees, about US$100 million. The proposal calls for conversion of existing narrow gauge track to meter-length and adding another 20-km of track to connect it to East-West Highway, the country’s main thoroughfare.
Another offer of help from India is for laying down short-range rail tracks to connect the main Tarai towns along the border, with railheads in India. There are four or five of such short-distance connecting rail lines proposed, with a later possibility of links to East-West Highway. In some distant future, a cross-country rail track paralleling East-West Highway can be built, using the nation’s abundant supply of electricity derived from its hydro resources.
With Nepal-India relationship so much clouded by the difficulty of political transition and especially the belligerency of left-leaning parties opposed to normal relations with India, it is difficult to envisage if this ambitious rail system planning will see the light of the day. Nonetheless, there is a silver-lining to this proposal, the hopeful signs coming from a new development—a rail-link to Lhasa. Reportedly, China has planned to add a 243-km extension to the Lhasa rail-line to Tibet’s southwestern city of Xigatse, at the foot of Mount Everest. This project is targeted for completion by 2014. Nepal has already requested an extension of the Lhasa rail line up to Kathmandu, which is at less than 200-km distance from Xigatse.
Whether the Lhasa-Kathmandu rail link gets built will depend very critically on India’s sensitivity to the proposal. My own understanding is that if India at all accedes to this proposal, it will at least bargain for Indian Railway to extend its network beyond the currently proposed routes along its northern borders with Nepal that may later include a rail link to Kathmandu.
Despite some misgivings about the dilution of national identity from heavy exposure to outside influences, the general population stands to benefit from improved links to the outside world. In fact, there are a few other options available for making Nepal a Switzerland of Asia, a vision first propounded by late King Mahendra. Opening up the country through the establishment of a vibrant rail system would be one sure means of achieving this dream.
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