KATHMANDU, Oct 12: Opposition parties have urged the government not to accept offers of loan for the construction of the proposed Kathmandu-Kerung railway. Nepal and China are expected to sign various accords on trade, energy and trans-Himalayan connectivity including one on railways following a meeting between Prime Minister KP Oli and Chinese President Xi Jinping on the second day of his two-day visit on Sunday.
During a meeting with former prime ministers, ministers and other dignitaries held at the behest of Prime Minister Oli on Thursday, Nepali Congress President Sher Bahadur Deuba asked the government not to take loan to build the railway.
“The government should rather focus on enhancing road connectivity than taking loans to build railways,” a leader present at the meeting quoted Deuba as saying. The government, Deuba said, should take forward the railway project only if China agrees to build it through grant.
Former Prime Minister and Samajwadi Party leader Baburam Bhattarai had also pointed to a potential debt trap in big infrastructure projects like railway and urged the government to prioritize projects to be funded through grant.
He said that the government should be careful ‘to strike balance between loan and grant’. Bhattarai asked the government to concentrate on bringing in more Chinese investment, while paying greater attention to road connectivity.
The warning of potential debt trap comes at a time when Nepali officials are signaling likelihood of an agreement to kick off the megaproject with feasibility study and detailed project report. Sources said that China is pressing the Nepali side to partially fund the construction of the project which is expected to cost around USD 3 billion or more.
Prime Minister Oli, who made Chinese rail a highlight of his poll promises, appears determined to take forward the railway project at any cost. On Wednesday, prime minister’s foreign policy advisor Rajan Bhattarai told reporters that Chinese rail was now inevitable and said that an accord was certain for the same.
Besides railways, the two countries are also expected to sign around a dozen agreements on trade, transit, and energy and Trans-Himalayan connectivity. Among other projects, the Nepali side has proposed including Kathmandu-Kerung Railway, Madan Bhandari University, Galchhi-Rasuwagadhi-Kerung 400 kV Transmission Line, 762 megawatt Tamor hydropower project, 426 megawatt Fukot-Karnali run-of the-river hydropower project, Rasuwagadhi Highway upgrade, Tokha-Chahare road, Kimangthanka-Hile road, and a road connecting Dipayal with Tibet under the BRI framework.