The Belt and Road Initiative Agreement signed between Nepal and China has crossed the 5-year mark, but even after so many years, BRI projects are nowhere to be seen on the horizon, The Kathmandu Post reported.
According to Pradeep Gawali, Nepal’s acting foreign minister, the reason for the failure of the BRI project in Nepal was “our start was slow. Projects took time to select and then we reduced the number of selectors. 35 to nine projects.”
“While we were working on the project implementation plan and its structure, the epidemic hit and the whole priority was shifted,” he added.
Further, some political and ideological factors have hampered the progress of BRI in Nepal, The Kathmandu Post reported. Since the projects under BRI were financed through loans taken from Nepal, Kathmandu has reduced the number of projects from twenty-nine to nine.
“Nepal has a long history of borrowing from multilateral institutions such as the World Bank and the Asian Development Bank, where interest rates are low and repayments are long,” said Mrigendra Bahadur Karki, an associate professor at Tribhuvan University. Nepal.
“Nepal cannot afford commercial loans at high interest rates,” he added. Multilateral firms lend at a maximum of 1.5 percent, with interest rates on commercial loans exceeding 2 percent.
The Trans-Himalayan Multi-Dimensional Connectivity Network, which was an inter-border railway, was one of the primary components of BRI, the Kathmandu Post reported. However, the Ministry of Physical Infrastructure and the China Railway Administration in a meeting with Chinese authorities said that it would take 42 months to complete the feasibility study of the railway project.
Complex geological terrain and labor-intensive engineering workloads will be the biggest hurdle in building cross-border railways, the Kathmandu Post reported. Further, a Nepalese finance ministry official said that the high interest rates have led Nepal to abandon the idea of taking commercial loans from Chinese banks and financial institutions.
Rajeshwar Acharya, a former Nepalese ambassador to China, blamed frequent changes in the Kathmandu government and “lack of proper diplomacy” for hindering the development of the BRI project. The former Nepalese ambassador further highlighted that changes in government also affect cooperation efforts between China and Nepal.
According to Acharya, Nepal should consult with the Chinese authorities to find a different method of financing. The Kathmandu Post reported. “It may take some time, but negotiations are the only way to a good deal,” he added.
However, talks between Nepal and China are unlikely to resume before the next general election in Nepal, as the current Sher Bahadur Deuba government in Nepal is reluctant to borrow. I do not see any possibility of BRI projects moving forward, at least until the general election, “Acharya concluded.