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Nepal to join hands with China on Tibet-Kathmandu railway

Landlocked nation wants to connect to world economy, minister says

A railway guard walks along the tracks in Lhasa, the capital of the Tibet Autonomous Region. Nepal and China are looking to build a rail link over their border.   © Reuters

TOKYO -- Nepal will work with China to link its capital to Tibet by rail as the Himalayan nation strengthens ties with its giant northern neighbor to propel its development, Foreign Minister Pradeep Gyawali told Nikkei in a recent interview.

The plan is to extend the railway from Lhasa to Xigaze in Tibet, which opened in 2014, by 660 km to reach Nepal's capital of Kathmandu. This would be the first rail link that crosses the Nepal-China border, and is just one facet of China's drive to expand its influence through the Belt and Road infrastructure-building initiative.

"Nepal is a landlocked country. To be developed, we need more and more connectivity," Gyawali said. "We can import goods at lower cost. The main purpose of the train project is to link to the second-largest economy of the globe."

A detailed feasibility study will be carried out over the next year and a half, and the construction will take about six years, the minister said.

The initial cost estimate is $2.5 billion, but the figure may increase given the topographical challenges presented by the Himalayas, the world's highest mountain range. Although most of the money will come from China, "Nepal can share some funding," Gyawali said.

"To be developed, we need more and more connectivity," Nepali Foreign Minister Pradeep Gyawali told Nikkei in an interview in Tokyo. (Photo by Hidetake Miyamoto)

But China's aggressive investment has put some developing countries at risk of falling into a debt trap. Sri Lanka, for example, was forced to hand over operations of a strategic port to a Chinese state-owned company to help pay down its debt to Beijing.

"We will decide what is needed and what is not needed," Gyawali said, stressing that Nepal will consider the ethical aspects of any funding decisions. Nepal's debt stands at just 27% of gross domestic product, according to its Investment Board.

Nepal has historically had deep trade and investment ties with India. But it suffered a fuel crunch when New Delhi essentially closed their border from late 2015 to 2016, and has since pursued more of a balance between its two giant neighbors.

Gyawali also expressed hope of drawing Japanese investment in such fields as hydropower, logistics and agriculture. He touted the technological prowess of Japanese companies, and urged them to take part in the 14 special economic zones planned across Nepal.

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