Nepal-China railway project: fantasy or reality?

The world’s toughest rail route, from Kerung in Tibet to Kathmandu, is struggling to get off the ground amid growing fears of debt, earthquakes and benefits bypassing local communities
<p>Trucks entering Nepal from China at  Rasuwa Gadhi port. The Chinese Customs and Immigration office is in the background. Image source: Nabin Baral</p>

Trucks entering Nepal from China at Rasuwa Gadhi port. The Chinese Customs and Immigration office is in the background. Image source: Nabin Baral

Tashi Sherpa runs the only teashop in Rasuwa Gadhi on the Nepal-China border, 170 kilometres north of the capital Kathmandu. About 50 metres away, a group of Chinese workers are busy building a bridge across the Nepal-China border, but none of them have ever come to her teashop.

“A truck brings food every few hours from that large building on the other side [of the border]. The Chinese do two things – eat and work. They eat a lot of meat,” Sherpa said with a big smile.

Hundreds of trucks and jeeps trundle down the bumpy road every day, over a temporary bridge, to carry goods and tourists from China. While they wait to enter Tibet or take passengers to Kathmandu the drivers sip tea and eat snacks in Tashi’s teashop.

A truck prepares to enter into China at Nepal’s border to Tibet in Rasuwa Ghadhi (Image: Nabin Baral)
A truck prepares to enter into China at Nepal’s border to Tibet in Rasuwa Ghadhi (Image: Nabin Baral)

Nepal-China border

The Nepal-China border here only opened after the devastating Nepal earthquake in 2015 led to China closing the badly damaged Kodari route. It is also where the new railway – proposed as part of China’s ambitious Belt and Road Initiative (BRI) – will enter Nepal from Tibet.

China has built a well-equipped customs and immigration office, which looks like a shopping mall. But the infrastructure on the Nepalese side is a complete mess. In 2017, when visiting the area, police officers were checking visitors in a hut with a zinc roof. Two years later, conditions have not improved. “We don’t even have a metal detector, so we have to ask each person to open their luggage and backpacks, and then check manually. A railway is beyond our imagination,” said Dilip Chhetri, the police inspector on duty at the border.

Since tourists visiting Mount Kailash have started to flock through this land route, owners of newly built hotels are expecting more business in the future. The railway will be a further boost, they hope.

The earthquake destroyed Nepal’s local revenue office, but the construction of a multi-storey replacement has been delayed due to a dispute with the contracting company. “How can a country which hasn’t managed to construct a building for its officers in two years construct tunnels through these mountains and run trains? It’s no more than a fantasy,” said Finjo Lopchan, owner of Potala guesthouse in Ghattekhola, one kilometre south of the border.

“To be honest, my head spins when people talk about railways. Look at the roads here. Shameless government,” he added.

A view of Rasuwa Gadhi from the Nepal side of Nepal-China border
A view of Rasuwa Gadhi from the Nepal side of the border

How near is Nepal’s BRI railway?

The proposed BRI railway will link Kerung city in southern Tibet to Nepal’s capital Kathmandu, entering the country in Rasuwa district and eventually going on to India. But locals have dubbed the project kagat ko rail (paper railway) and sapana ko rail (dream railway).

The Kerung-Kathmandu railway is part of more ambitious plans to link Nepal China and India by rail
The Kerung-Kathmandu railway is part of more ambitious plans to link China and India by rail (Map source: The Conversation)

People who have suffered for years along bumpy roads in the northern border region of the country laugh at the idea of the railway. “I don’t feel excited when you talk about railways, I feel disappointed. Every day we have to drive along this scary road in our trucks and we hear news time and again about railways. I don’t understand,” said Balaram Rimal, a truck driver who carries goods across the border from Kerung regularly.

China prepared for Nepal a pre-feasibility study of the railway in late 2018. This report suggested it was an extremely hard project, but not impossible. “Technically this will be one of the world’s toughest railways to construct”, said Paribesh Parajuli, the only railway engineer at Nepal’s railway department, who will leave once his short-term consultancy contract expires.

The Chinese study has not been made public despite intense debate over what’s happening. The report lists “six extremes”: including topography, weather, hydrology and tectonics that will make the project hugely challenging, said Parajuli, who shared the findings of the report.

 About 98% of the railway on the Nepal side of the Nepal-China border will be in tunnels and on bridges according to the report, with about five stopovers. Tracks will need to be built on steep terrain, as the railway climbs from an altitude of 1,400 metres in Kathmandu to about 4,000 metres in Tibet.

 The proposed route also cuts through the mountains near a major fault line – where the Indian plate meets the Eurasian plate to form the Himalayas – so the area is very susceptible to earthquakes.

Mitigating these risks means the project will cost far more than normal railways, Parajuli explained.

[Video by Nabin Baral]

Underprepared, overwhelmed

In Nepal there are almost no preparations in place. Consultants are currently studying another railway, the east-west railway planned in the southern plains near to India. But the state lacks people capable of reviewing their reports, much less anybody to actually lead the construction of the railways. In the decade since it was set up, Nepal’s railway department is yet to hire a single permanent railway engineer, but it hopes to construct 4,000 kilometres of railways in the next two decades.

A new 34 kilometre railway from the Indian state of Bihar to Nepal is due to start running in a few months, but the government will have to hire a train driver from India and other technicians to operate its first modern rail, according to local media reports.

A woman carrying fodder in Patibhanjyang village, in Sindhupalchowck district of central Nepal, where the proposed Nepal-China railway will turn towards Kathmandu
A woman carrying fodder in Patibhanjyang village, in Sindhupalchowck district of central Nepal, where the proposed China-Nepal railway will turn towards Kathmandu

Where is the money?

Preliminary estimates put the costs of the railway from Kerung to Kathmandu at about 38 billion yuan (USD$5.5 billion), almost equal to Nepal’s total revenue in 2018. The railway would be 170 kilometres long from Tibet to Kathmandu. Although only one third of the total length falls on the Nepal side, it would account for almost half of the costs due to the extreme geology and climate.

Despite these challenges, Nepal’s railway dreams moved closer to reality after the project was listed as one of the 64 to be considered under China’s BRI during the second Belt and Road Forum in Beijing in April. However this does not guarantee any financial support to the project.

Nepal is seeking a grant from China to construct the railway, but China has remained reticent. The Nepal government did not allocate any money for the northern railways in its budget speech in May. But according to officials at Nepal’s infrastructure and transport ministry, a detailed study for the Kerung-Kathmandu railway will cost an estimated – five times the country’s total rail budget for the next year.

Despite this, finance minister Yubaraj Khatiwada has declared the date of construction: “We will complete the detailed project report and feasibility study and start construction work on the Kerung- Kathmandu railway in the next two years,”

The Chinese do not seem in such a rush. In 2014, the Qinghai-Tibet railway reached Shigatse in Tibet about 500 kilometres northeast of Nepal’s border. The railway was scheduled to arrive on the border at Kerung by 2020, but the Chinese have pushed that back to 2025, according to recent media reports.

Debt trap fears

At home, there are fears of the potential financial burden to the country if the railway is built. But the government has refuted the possibility that Chinese loans could push the country into a debt trap. “The main thing is how projects are selected, whether they are selected on the basis of possible returns. And what is the pay back plan?” Pradip Gyawali, Nepal’s foreign minister, said in May.

While the minister could not answer questions about what Nepal would export to China by train, the prime minister, KP Oli, has suggested mineral water. But since mineral water is already a multi-billion dollar industry in Tibet, the market is already saturated.

There are serious grounds for concern. While imports from China increased by about 40% in 2018, exports from Nepal fell by 30%, with the country’s trade deficit reaching about US$12 billion last year – equal to nearly half of the country’s total GDP.

The Chinese ambassador has tried to allay fears. “The BRI is not a ‘debt trap’ that some countries may fall into, but an ‘economic pie’ that benefits the local population,” she wrote in a recent opinion piece in a Nepali newspaper.

However, since the railway proposed by China is almost entirely along tunnels and bridges through remote mountains and misses nearly all the big cities on the Kathmandu-Kerung highway, it is unlikely that local populations will benefit.

Locals and government kept in the dark

Early one morning in the second week of May, 76-year-old Narayan Das Dongol was playing with his granddaughter in Tokha village in the northern corner of Kathmandu valley – a proposed stop on the Nepal-China railway. “In next few years these fields will be filled with concrete houses,” he said. “I heard that the railway is coming this way during a religious meeting, but I haven’t got any information from local authorities.” A decade ago the cost of land per aana (about 32 square metres) was about US$4,000, but now it’s about US$25,000.

Land prices have soared along the highway from Kathmandu to Rasuwa Gadhi over the last few years after China declared the international border entry point in 2017. The railway rumours have played a part.

But there is confusion about the exact route of the railway. Everywhere we went, people had one question for us: “Do you know which way the railway will come?”


[Video by Nabin Baral]

As we waited outside the office of the mayor of Bidur – the biggest city in Nuwakot district, 75 kilometres northwest of Kathmandu ­– his driver Lok Bahadur Giri came up and said, “I have heard people say it will be built next to current highway. Is it coming to our city?” The mayor, Sanju Pandit, also thinks the railway may be built along the highway to China where his city serves as a major stopover: “I have heard that the railway will cross this city, but we haven’t been consulted or informed about it at all.”

The route proposed by the Chinese does not in fact align with the existing highway but will cross the mountains through tunnels . “So major cities on the existing highway won’t be even able to see the railway,” said Parajuli, the railway engineer.


[Video by Nabin Baral]

Environmental and biodiversity impacts of the Nepal-China railway

The Nepal-China railway will pass through two national parks – Langtang and Shivapuri. Langtang boasts endangered and vulnerable species like the red panda and snow leopard, while Shivapuri – on the northern side of Kathmandu – is home to over 300 bird species and one third of the country’s total birds. Yet while economic, political and technical issues dominate railway discussions, environmental impacts are not even on the radar.

The growth of illegal wildlife smuggling along the railway route is one concern. The field office of Nepal’s National Park and Wildlife Conservation Department is severely under-resourced. When we visited, one staff member called Lalan Pandit said the police had informed them that there was something suspicious in our truck. He shared an experience from last year: “I was monitoring trucks entering Tibet and one driver was attaching a small bundle on the walls of the trucks and seemed suspicious. As we rushed to the truck the driver jumped into the river. We finally got him back and found that he was trying to smuggle tiger bones.”

Truck driver waiting to cross the Nepal-China border at Rasuwa Gadhi
A truck driver waiting to enter China at the Rasuwa Gadhi border port.

It is not possible for the staff to monitor the hundreds of trucks and people crossing the Nepal-China border everyday with current resources, Pandit explained. More than 100 people were arrested in 2016/17 in the country for smuggling wildlife parts, mostly to China.

Park officials in Kathmandu said they have not been consulted about the Nepal-China railway project yet, but they are hoping to get involved in the planned feasibility study. “As it is a major infrastructure project there are serious concerns regarding biodiversity and environmental issues so we will engage once the government asks us for permission to conduct further study for the railways,” said Bishnu Prasad Shrestha, spokesperson at the department of national parks and wildlife conservation.

Timeline: Nepal’s BRI railway

2017 – Nepal and China signed a memorandum on Belt and Road cooperation ahead of first Belt and Road Forum.

2018 – Nepal formed two committees headed by the foreign secretary and finance secretary to propose projects for China to fund under BRI.

2018 – Nepal’s prime minister, K.P Oli, visited China and signed 14 bilateral agreements including on railway cooperation.

2018 – China conducted a pre-feasibility study for the cross border railway from Kerung to Kathmandu.

2019 – The Nepal-China cross-border railway was listed as part of the Trans-Himalayan connectivity network in the leaders’ issued at the second BRI Forum in Beijing in April.

2019 – Nepal’s government declared railway construction will start in the next two years during its budget speech, without allocating appropriate budget for a detailed study.

Photo story: The China built railway cutting through Laos