Yawning difference between unit cost forwarded by India and price stated by Nepali officials

KATHMANDU, Feb 6: How much does a train set for the Janakpur-Jayanagar Railway cost? The answer is tricky as the unit cost stated by officials of the Government of Nepal and the unit cost figure forwarded by the Government of India differ hugely.

Officials of the Nepal government have stated that a set of five coaches (including double engine) costs Rs 500 million while the unit cost quoted by the Indian government is US $ 3.67 million (or Rs 422 million as per the current exchange rates). 

The unit cost for the train set sent by India in April last year and obtained by Republica includes cost of supply, commissioning, warranty and servicing. The unit cost of the diesel electrified multiple unit (DEMU) train was provided by India’s Ministry of Railways. This type of train is manufactured by Integral Coach Factory in Chennai. The government-owned train making unit specializes in DEMU trains, and each train can accommodate about 1,300 passengers. 

The price difference per train set comes out at Rs 78 million while the total difference for the two sets the government plans to purchase hovers above Rs 156 million. Government sources claim that a delay for about a year in making a decision on the purchase and the price currently floated by Minister for Physical Infrastructure and Transport Raghubir Mahaseth and Department of Railway officials had thrown the deal into doubt. 

 Mahaseth claimed in December that the government was buying train sets from the Government of India through a G2G deal and it would cost about Rs 500 million. Speaking at a press meet on December 31, he had also claimed that the purchase agreement would take place on January 10. But no such decision has been taken yet. 

Immediately after receiving the unit cost price from the Government of India, the Department of Railway had forwarded the letter to Mahaseth, but the minister, for no clear reason, did not take a decision, a source at the ministry claimed. 

Talking to Republica on Sunday, Director General of the Department of Railway Balaram Mishra said the process of purchasing the trains is underway. “The price is yet to be decided, but the tentative price will be about Rs 500 million for each DEMU train set,” he added. Asked about the price difference, Mishra said it was too early to state the exact price and Rs 500 million was a tentative figure. The negotiations were still underway.

A news story carried by Rastriya Samachar Samiti, the government owned news wire service, said on Monday that the cost of the two train sets would be about Rs 1.5 billion. 

A similar G2G deal in 2017 for purchasing led light bulbs from India for Nepal Electricity Authority  landed in controversy. The delay in the train purchase deal and the price differences raise similar concerns, said a source. 

The 70 km Janakpur-Jainagar rail line was upgraded recently with Indian grant assistance.

 
• Janakpur-Jayanagar
 
• Railway
 
• train