Kathmandu, December 14

The government has proposed construction of a well-facilitated Inland Clearance Depot (ICD) at Dodhara Chandani of Kanchanpur district of far-western Nepal for grant assistance from the Millennium Challenge Corporation (MCC).

The proposed project is expected to reduce transportation costs in trade with western countries if neighboring India agrees to provide gateway of Jawaharlal Nehru Port Trust (JNPT) at Mumbai, according to Krishna Gyawali, MCC national coordinator.

Nepal is currently using India’s Kolkata port for third country trade. The port is a riverine port and it cannot receive larger ships as the depth of water is gradually declining there. JNPT would be a viable option for Nepal for expansion of trade by developing ICD in far-western part of Nepal.

It would also aid in development of the far-west, which is relatively less developed than other parts of the country, Gyawali said.

“The government needs to prepare such projects within one-and-a-half years to mobilise compact funding from MCC,” he said.

“The dry port in Dodhara Chandani of Kanchanpur, however, has been identified as a game-changer project for the country’s development and MCC is also positive towards this project.”

Still, before moving towards taking any decision in this respect, the government must first and foremost take consent of the Indian government to use JNPT and receive transit permit to access the port.

The Nepal Intermodal Transport Development Board (NITDB) — which manages the ICDs in Nepal — and MCC officials in Nepal have held a few rounds of talks in terms of developing ICD in far-western Nepal.

The proposed project location shares border with Uttarakhand of India and would have better connectivity as the Asian Highway runs through this part of India.

“JNPT has been extending trans-shipment facility to ICD Tughlakabad in Delhi, and if Nepal receives similar facility, we would be able to minimise logistics cost significantly in trade with the western countries,” according to Laxman Bahadur Basnet, executive director of NITDB.

During the preliminary talks with NITDB, MCC officials have assured that MCC could extend support amounting to Rs three to five billion for the construction of well-facilitated ICD, expansion of link road to highways in both India and Nepal and construction of motorable bridge near the location of Dodhara-Chandani bridge.

Sunil Bahadur Thapa, commerce minister of the previous government, had also held few rounds of talks with the shipping ministry of India and his counterpart ministry to take consent of the Indian government before moving forward. Because of the recent tension between Nepal and India, the incumbent government is yet to approach India regarding this crucial issue.

Under the compact funding, the country can receive the US grant of $66 million to $698 million for a five-year period based on the performance indicators set by the MCC — an independent foreign assistance agency of the United States. The MCC board led by US foreign secretary had recently declared Nepal eligible for the Compact programme after three years of its selection for threshold programme in December 2014.