China, Nepal Discuss USD8 Billion Cross Border Rail Link Through Himalayas

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Nepal is in talks with China to build a cross-border rail link that may cost up to USD8 billion, with groundwork and funding to be expected after Nepal formally signed up to Beijing’s Belt and Road initiative, a Nepali finance ministry official has stated. Yug Raj Pandey, an under-secretary at Nepal’s ministry of finance, has said that the proposed 550 kilometre-long railway would connect China’s western Tibet region to Nepal’s capital of Kathmandu and will carry goods and passengers.

Nepal officially signed an agreement to be part of China’s OBOR initiative at last month’s Belt and Road Forum in Beijing. “Now we are a member of (the initiative) we can get some specific project assistance from China’s government. We expect it for the railway.” Pandey said. “Once we connect by railway then we can increase our trade and invite more tourists to Nepal.”

China has already made internal plans to extend its Tibetan Rail network, which currently reaches through from Lhasa to Xigaze, taking it onto Gyirong in Western Tibet. From there the proposed route would drop down south to Kathmandu, 160km distant. However, the elevation between the two descends 1000 meters creating very specific engineering problems both for the locomotives and track. At present the two are connected via a six hour bus journey. Gyirong is a Port of entry into China.

Pandey said the two countries had been in discussions for the past five months about the project, which could cost USD7-8 billion and take up to eight years to complete. He said Nepal planned to start preparing a detailed project report for the railway, and that they had yet to decide how much funding they will seek from China. “Our first priority is the railway, and second will be hydropower projects and cross-border transmission lines between Nepal and China,” he said. Nepal signed a massive USD2.5 billion hydropower deal for the 1,200 megawatt Budhi-Gandaki hydroelectric project with China last week.

China last year agreed to consider building a railway into Nepal and to start a feasibility study for a free trade agreement with landlocked Nepal, which has been trying to lessen its dependence on its other large neighbor India. The rail project will theoretically allow passengers to travel from Kathmandu to Lhasa in a one day journey time, a 610km distance. China has also proposed building a rail spur that will lead close to the Mount Everest base camp, allowing tourists access to scenic views of the mountain.

Fast Facts: Kathmandu & Lhasa

Population GDP per capita (per annum, USD) Elevation (metres) Annual Tourist Visits
Kathmandu 1,000,000 2312 1400 729,000
Lhasa 250,000 8123 3656 3.6 million


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