Nepal PM Oli touts MoU with China on cross-Himalayan rail project

The Prime Minister said the agreement to construct a new railway line connecting China’s Gyirong trading port in the city of Xigaze in Tibet with the Nepali capital Kathmandu is an important document of his visit.

A memorandum of understanding (MoU) for building a strategic railway link connecting Tibet with Kathmandu through the arduous Himalayan terrain was signed after Oli held talks with Chinese President Xi Jinping and Premier Li Keqiang. 

The Nepal PM, who is back in Kathmandu after a five-day visit to China, expressed hope that cross-border railway projects will give an impetus to cross-border connectivity between Nepal and China.

Speaking to journalists upon his arrival at Tribhuvan International Airport in Kathmandu, he said his visit to China has further enhanced friendship and bilateral cooperation between the two countries in wide-ranging areas, including cross-border rail and road connectivity.

Oli said the agreements on railways, energy, transportation, infrastructure development, tourism, among others, have prepared the outline for long-term economic assistance, the Kathmandu Post reported.

Oli expressed hope that cross-border railway projects will give an impetus to cross-border connectivity between Nepal and China.

This is Oli’s second attempt to seal a transit trade treaty with China after his his previous attempts during a brief previous tenure in 2016 to reduce dependence on India for transportation of goods to Nepal.

The details of the railway agreement have not been made public.

Oli said he has invited Chinese President Xi Jinping to visit Nepal.

China has been spending billions of dollars building rail, road and air links in the remote Tibet, but with less commercial success. A railway line was put in operation in 2014, linking Tibet’s provincial capital Lhasa with Xigaze.

These rail projects would become commercially viable if these are extended to Nepal and perhaps India. The rail link to Khatmandu is the first step before Beijing can hope to extend it to India.

Meanwhile, former foreign minister Prakash Saran Mahat has said that Nepal should ask both India and China to build railway links to the country on grants instead of investing national budget in such projects.

A key leader of the main opposition Nepali Congress (NC) Mahat claimed that Nepal cannot pay back the loan if such a loan is taken for constructing railways in the country as the cost of such projects would exceed the annual capital expenditure of Nepal.