‘Our effort is to bring down the number of days and cost involved in transporting cargo’

As the Kolkata port is the only gateway for Nepal’s trade with third countries via sea, the Consulate General Office has a vital role in helping facilitate the country’s exports and imports. The Consulate General Office over time has been coordinating with the Port Authority, Indian Customs, shipping lines and Indian Railways to facilitate Nepali traders. However, there are numerous problems yet to be resolved. Pushpa Raj Acharya of The Himalayan Times spoke to Chandra Kumar Ghimire, Consul General of Nepal in Kolkata during his visit to Nepal, on how his office has been working to facilitate traders.

How is the Consulate General Office in Kolkata working to facilitate trade?

We’ve focused on how to best utilise the port by strengthening relations with concerned stakeholders — Port Authority, Indian Customs, Indian Railways, Container Corporation of India and other business associations. We have also been focusing on improving the transit system for the early release of Nepal bound cargo (by road/rail) that are delivered to the country through six different entry points in the India-Nepal border. Apart from that, I have been repeatedly holding meetings with business associations of India to attract investment and to also promote tourism. Likewise, our office has been dedicated for the improvement of bi-lateral mechanisms.

Nepali traders often complain that they face various hassles in documentation and process-oriented works while getting their cargo from Kolkata port released and it takes at least two weeks. What has the Consulate General Office been doing to shorten the process?

Earlier, the Port Authority used to seek original documents for customs transit declaration. It used to take at least four-five days to send documents from Nepal to Kolkata port and the Port Authority only released the cargo a day after the document submission. To shorten the process we’ve requested the Authority to release the cargo on the same day that the documents are submitted. We have also requested them to consider fax and documents submitted via email to release the cargo instead of original documents. We have also initiated periodic meetings with the Port Authority to resolve critical issues. The Port Authority of Kolkata has extended a grace period for Nepal bound cargo — a week for goods that are evacuated by road and two weeks for cargo ferried by rail. Within that grace period the port doesn’t impose detention charge. Our effort is to bring down the number of days and the cost involved in transporting Nepal bound cargo. But we have found that some Nepali freight forwarder companies and Customs House Agents (CHAs) of India are involved in irregularities. Nepali freight companies and CHAs have been found to be intentionally delaying the release of cargo by submitting false documents so that they could charge high detention charges from importers as their cargo would be stuck for a long time in the yards that are run by privately owned companies. In this regard, for the first time, we have blacklisted those CHAs that are involved in such activities and circulated the information to the Federation of Nepalese Chambers of Commerce and Industry, Confederation of Nepalese Industries, Nepal Foreign Trade Association, Birgunj Chamber of Commerce, and Nepal Freight Forwarders Association. As the imported goods become dearer due to all these detention charges and other costs involved in import, the cost is ultimately shifted to consumers. Thus, we’ve been working on reducing the number of days and cost involved in imports.

Traders say they have been compelled to hold their cargo for a longer time in the port yard as the Indian Railways does not provide rail service on time. What is your say on this?

There is a mechanism for the Indian Railways to provide locomotives without delay when the rake is full. If importers do not get the rail (locomotives), we can directly talk with Indian Railways. In the past, it was hard to get rail service on time even if the rake had full capacity because of the lack of locomotives which used to be diverted elsewhere. The demurrage charge levied by shipping lines is also high.

A government study had revealed that Nepal has been losing $68.8 million per year at the Kolkata port as the shipping lines start charging for demurrage if the containers with Nepal-bound cargoes are not returned to Kolkata port within the grace period extended by them. What is the Consulate General office doing to reduce the charge?

We have urged the traders to negotiate with the concerned shipping lines for a convenient grace period while importing goods from third countries via Kolkata port to reduce the detention charges levied by the shipping lines. Shipping lines normally extend 14-day turnaround period, which means that the containers need to be transported to the Inland Container Depot (ICD) in Birgunj where they are unloaded and returned at Kolkata port within 14 days. Some shipping lines like APL have been extending 21-day turnaround period. They do not charge anything extra within the grace period. But if the containers are not returned within the turnaround period then the charges levied on importers are high. If importers ensure of mentioning the grace period in the master bill of lading instead of house bill of lading, shipping line representatives in Kolkata port will act accordingly. We have also spoken to the Association of Shipping Line Containers in Kolkata to rationalise the cost they have been charging because Nepal’s volume of exports and imports could rise significantly in the coming days and some have started revising their charges. On the other hand, the Indian Railways can also help us in reducing the turnaround time of shipping line containers. Reducing the number of days taken to load and unload will help reduce the turnaround time and we’ve been talking with Indian Railways in this regard.

The ICD Birgunj is considered the international port of Nepal and some shipping lines like Maersk have recognised it, which helps in reducing demurrage costs. Why have other shipping lines not extended this facility?

Technically, ICD Birgunj is yet to be mapped in the international port location. To map the Birgunj dry port — which is the only rail linked ICD of the country — in the international port map, we are preparing to sign an agreement, which is called Transhipment Agreement with the Indian government. And Nepal is preparing the modality of Transhipment Agreement and we can expect it to be signed soon. To prepare the transhipment modality we have already conducted a study with the involvement of the Department of Customs and the Ministry of Commerce and Supplies. And the study has mentioned that the modality that is applied for transporting goods from Jawaharlal Nehru Port (Mumbai) to the ICD Tughlakabad, New Delhi would be the best model for transhipment from Kolkata port to ICD Birgunj. Shipping lines are also eagerly waiting for this agreement and we need to finalise it at the earliest.

Is there any possibility to conclude the transhipment agreement modality during commerce secretary level talks expected to be held in September?

We hope that the commerce secretary level talks in September will help finalise the agreement. The issue has been discussed during meetings of different joint forums like the earlier commerce secretary level talks and customs director general’s level talks. Once the transhipment agreement is signed a similar modality can be adopted for other ports like the Visakhapatnam port, which the Indian government has agreed to provide as additional gateway for Nepal’s export and import traffic.

Nepal has also asked for two additional routes — Nautanwa- Bhairahawa and Jogbani-Biratnagar — for bulk cargo movement and letter of exchanges have also been forwarded to India. When can we expect the Indian government to provide Nepal these two additional routes?

We have been requesting the Indian government since long to allow the additional two routes for bulk cargo movement which is crucial for Nepal’s industrialisation as Biratnagar in the east and Bhairahawa in the west have been emerging as Nepal’s major industrial areas. If we look at the cost of operating an industry in Birgunj area, then it is comparatively lower than in Bhairahawa and Biratnagar because of the lower transportation cost.

That is why we have requested the Indian government for a rail link in the Nautanwa-Bhairahawa and Jogbani-Biratnagar routes to help reduce transportation cost. We have sought this facility especially to reduce the cost of industrial raw materials.