Saturday, October 6, 2012

MoCS pushes for finalization of LoEs for operating five new transit routes

KATHMANDU, Oct 6: The Ministry of Commerce and Supplies (MoCS) has started consultations with the Ministry of Finance (MoF) to finalize the drafts of letter of exchange (LoEs) which it plans to forward to the southern neighbor soon for the early utilization of the five new transit routes.

“The Ministry of Law and Justice (MoLJ) last week gave its clearance on the draft LoEs. Now we are awaiting consent of the MoF. Once okayed, we will send them to India through the Ministry of Foreign Affairs (MoFA),” Lal Mani Joshi, secretary at the MoCS told Republica.
If every thing went well, the MoCS officials said the government will send those drafts to India within a week.

“We will move on to sign those LoEs once the cabinet of both the countries endorse the contents enshrined on them,” said Joshi.
Though India and Nepal exchanged initial drafts of LoEs last year, the two sides have acted slowly in getting the deals signed, which is crucial for operationalization of the new transit routes.

India in February 2011 had given its nod to open land routes between Vishakapatnam sea port and four major customs, rail route between Birgunj dry port and Vishakapatnam and also Rohanpur (Bangladesh)-Singhabad (India)-Jogbani (India) and Phulbari-Banglabanda in order to facilitate Nepal´s foreign trade.

However, sources at the MoFA said the whole process of finalizing the LoEs moved slowly because Foreign Minister and Deputy Prime Minister Narayan Kaji Shrestha is not positive about signing the pact fearing that the provision of additional lock envisioned in them could invite criticisms from his opponents.

MoCS officials, on the other hand, said the proposed extra system was already supported by experts and business community.

“There is no need to fear the additional lock on container along the transit routes as even the traders and experts are positive toward it, stating that it will lessen the hassles to ship the goods along those routes,” said a source at the MoCS. India has already introduced additional lock system on Kolkata-Nepal route from August 2011.

Sarad Bikram Rana, executive director of Nepal Intermodal Transport Development Committee, said the government shouldn´t delay for signing the LoEs with India as the agreed trade routes were crucial for boosting Nepal´s trade with India, Bangladesh and overseas countries.

“We will be relieved from the monopoly of Kolkata port if we operationalize Vishakapatnam port and operate through new routes. Traders will get more choice along with better facilities and transparent process of cargo handling on those routes,” said Rana.

India had long been putting pressure on Nepali officials to agree on the additional lock system before the renewal of the transit treaty, which expires on 5 January 2013, citing security concerns and cases of transshipment of goods destined to Nepal in India.

China - Nepal´s second largest trade partner - has also been practicing additional lock system on cargos entering the country through Tatopani customs.

Published on 2012-10-06 03:40:20

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