Indo-Nepal rail pact

Santanu Sanyal

While the agreement on Customs procedures to be followed for the promotion of bilateral trade is welcome, the introduction of Electronic Data Interchange at Raxaul should brook no delay. Granting permission for the movement of flat and tank wagons, it is felt, will substantially boost the throughput of the Birganj ICD which has been hamstrung by poor performance.

The review of the rail services pact between India and Nepal concluded recently in Kathmandu, without significant decisions. The only major one was the approval of the Customs procedures for the promotion of bilateral trade to be routed through the Birganj inland container depot (ICD) located inside Nepal. Right now, the Birganj ICD, which is connected by rail to the Kolkata port, largely handles Nepal's overseas trade (more imports than exports) in relation to third countries (those other than India).

Exchange of rolling stock

At the meet, the Nepalese delegation, led by Mr N. P. Upadhaya, Joint Secretary, Ministry of Industry, Commerce and Supplies, insisted on the exchange of rolling stock covering all types of wagons flat, open and tank and reefer containers and their handling at the Birganj ICD. The Indian side, led by Mr R. K. Tandon, Executive Director, Railway Board, agreed to consider the demand, though partially.

While the demand for interchange of flat and tank wagons and reefer containers may be considered, it was indicated that permission would not be granted for the movement of open wagons, particularly the Box N type. The Home Ministry and the Customs authorities are believed to be opposed to granting permission to open wagons on security reasons. However, the Nepalese delegation was told that it would take another eight weeks or so before India would be in a position to firm up its decision on the proposal for the interchange of flat and tank wagons and reefer containers.

Boosting throughout

Granting permission for the movement of flat and tank wagons, it is felt, will substantially boost the throughput of the Birganj ICD which has been hamstrung by poor performance so far. In 2005-06 (July 15, 2005 to July 14, 2006), the throughput was 9,693 TEUs, comprising 9,629 of imports and 64 TEUs of exports. The corresponding figures for 2004-05 were 5,732 TEUs, comprising 5,651 TEUs of imports and 81 TEUs of exports. In 2005-06, Himalayan Terminals Pvt Ltd (HTPL), the joint venture company that runs the ICD, will post an estimated loss of Rs 2.5 crore.

The flat wagons are generally used for transporting steel items and the tank wagons for liquid bulk items such as chemicals, vegetable oil and petroleum products. Once movement of these wagons are allowed, the railway rakes carrying these items to Nepal will move straight into the Nepalese territory for unloading at the Birganj ICD. The throughput of the ICD thus will, thus, get a big boost.

An estimated 1.5 lakh-2 lakh tonnes of steel items and nine-10 million tonnes of petroleum products are sent every year from India to Nepal, partly by road and partly by rail. Under the present arrangement, the consignments, when moved by rail, are unloaded at Raxaul, the last Indian railway station in north Bihar bordering Nepal, for onward movement by road to Nepal. Once the proposed arrangement is in force, the railway rakes flat or tanker can move straight into Birganj (Nepal) for unloading at the ICD and the practice of unloading the consignments at Raxaul can be dispensed with.

The move to exclude the open wagons from the purview of the proposed interchange on security grounds, may not be judicious, feel concerned circles. After all, the Birganj ICD is fully protected by the contingents of the Nepalese army. In addition, there is a police post right inside the ICD and a private security group posted for day-to-day vigil. There is a proposal to provide even armed escorts to open wagons from the No Man's land. However, one wonders why the proposal has not evoked a favourable response from the Indian side, particularly when a new kind of understanding is being forged at the political level between the two countries.

The Indian side also did not respond positively to the proposal for additional investments for improving infrastructure at the ICD, it is learnt. While the need for such improvement can hardly be over-emphasised, the key issue, which remains unresolved, is funding. Nepal would like India to provide the fund but the latter has not evinced much interest. Understandably so. After all, with the ICD being located inside the Nepalese territory, it is perhaps presumed that Nepal should do the needful, more so when the joint-venture company is charging high lease rentals.

Electronic Data Interchange

While the agreement on Customs procedures to be followed for the promotion of the bilateral trade is welcome, the introduction of EDI (Electronic Data Interchange) at Raxaul, it is also felt, should brook no delay. This is because the documents now take time to arrive at Raxaul, some times even delaying the trains. The Customs require original seal cover for transshipment traffic and the the trains are given the green signal only after due seal check. At Raxaul Customs, there is a facility for EDI but for handling exports only. At the Kathmandu meet, the Indian side promised to take up the matter with the Customs authorities, it is learnt.

Finally, it will be wrong to presume that the Birganj ICD has not handled any bilateral traffic so far. It did on two occasions one rake of 70 containers carrying polyester yarn from Nagpur in March 2006 and another 40 covered wagons carrying industrial salt from Rajasthan in May 2006.

(This article was published in the Business Line print edition dated August 7, 2006)
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