Saturday, January 12, 2013

Failure to secure new transit facility might affect WB support

KATHMANDU, Jan 10: The support pledged by World Bank (WB) for Nepal-India trade facilitation might be affected, as Nepal has failed to sign new transit treaty with India for paving the way for implementation of additional lock system for Nepal-bound transit containers and operationalizitation of new trade routes.

Ministry of Commerce and Supplies (MoCS) was forced to abort the process of signing new treaty after Ministry of Foreign Affairs (MoFA) raised objection on provisions related to additional lock system in the draft. MoCS has now decided to go for automatic renewal of the existing treaty instead.

The treaty expired on January 5.

According to MoCS officials, renewal of existing treaty means Nepal would not be able to get benefit from the five recently agreed transit routes, fully operationalize Vishakapatnam Port for third country trade, and operate cargo train between inland container depot (ICD) in Birgunj and Bangladesh.

WB has agreed in principle to extend support worth US$ 90 million (around Rs 8 billion) for the proposed Nepal-India Transit and Trade Facilitation Project (NITTFP). The project is aimed at modernizing customs points, facilitating cargo clearance and developing transport infrastructures.

“The backtracking on the treaty shows the government´s lack of commitment in international trade facilitation. Now, it would be difficult for us to implement the proposed trade facilitation project that WB has pledged,” a source at MoCS told Republica.

WB cannot implement the project in the absence of commitment from the two countries.

The source said the assistance was supposed to be utilized for introducing Electronic Data Inter-change (EDI) system along customs points and one window system for reducing paper documentation on customs clearance and upgrading 36-km Narayanghat-Mugling road to ensure smooth transit of goods.

The assistance also aims to introduce provisions for frequent monitoring of cargo handling process on Kolkata-Kathmandu route - the sole transit route for Nepal´s third country - so as to ensure hassle-free transit of goods.

WB has also agreed to extend support for establishing Inland Clearance Depot (ICD) in Dodhara-Chandani area located in far-western Nepal. Similarly, construction of Container Freight Station near the capital is also among the programs proposed in the assistance.

Published on 2013-01-10 05:00:11

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