Nepal is now seeking a grant from China to construct the railway, but Beijing is reticent, hence recent comments by Chinese Ambassador Hou Yanqi urging Nepalis not to jump the gun.
The Nepal government has not allocated any money for the Tibet railway in this year’s budget. But officials at Nepal’s Infrastructure and Transport ministry say just a detailed engineering study for the Kerung-Kathmandu section of the railway will cost an estimated five times the Nepal’s total railway budget for next year.
Even so, Finance Minister Yubaraj Khatiwada seems upbeat. He has even announced the date of the start 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 to be in such a rush. The Qinghai-Tibet railway reached Xigatse in Tibet in 2014. At the pace of construction, it was scheduled to arrive on the border in Kerung by 2020, but the Chinese have reportedly pushed that back to 2025.
Both the Chinese and Nepal governments have denied that loan financing for the project will push Nepal into a debt trap, as the Americans have been warning.
“The main thing is how projects are selected, whether that is done on the possible rate of return, and the pay back plan,” says Foreign Minister Pradeep Gyawali.