Kathmandu, March 28

Prime Minister KP Sharma Oli’s recent statement of purchasing the country’s own ship and establishing a shipping company does not hold any water regarding lowering the cost of trade, according to private sector players.

Nepal’s cost of trade is high not because of the ocean freight cost but due to the high cost of trade in Indian transit. On the eve of PM Oli’s visit to the southern neighbour, private sector has said that he should hold a dialogue with his Indian counterpart to develop cross-border trade infrastructure, accelerate the ongoing construction of integrated checkposts and dry ports, and increase the number of rails to ferry Nepal-bound cargo containers from Indian ports.

Hassles during transit and delay by the Indian Railways to ferry Nepal-bound cargo containers have been raising the cost of trade. “Ocean freight cost is neither an issue of concern for Nepal’s foreign trade nor will it minimise the rising logistic costs of trade,” said RB Rauniyar, trade and transit expert.

“Poor road condition in the country and hassles during Indian transit should be addressed if the government wants to genuinely resolve the issue.”

The government, in fiscal budget 2016-17, had included a programme to conduct a study regarding operating a shipping company, when Oli was the prime minister back then too.

PM Oli has again started talking about purchasing a ship as soon as possible. Oli’s recent statement has drawn flak from the private sector, which has said that the prime minister’s statement of purchasing a ship does not make any sense.

Earlier, Oli’s statement regarding purchasing a ship was taken lightly after his government was toppled within a short period of time. However, as Oli has again become the prime minister through a strong electoral mandate the private sector has drawn the attention of PM Oli on the actual issues related with high logistic costs of foreign trade.

The private sector has also suggested the prime minister to approach the southern neighbour to develop a dedicated railway line from the Indian sea ports to Nepal through which traders could ferry goods from and to Indian ports within a few days.

Currently, the Container Corporation of India (CONCOR) — a subsidiary of Indian Railways — has been operating rail service to Nepal’s only rail-linked inland clearance depot (ICD) in Birgunj.

Such dedicated railway line for Nepal from Indian ports to Nepal’s inland clearance depots in Bhairahawa and Biratnagar could bring about transformational changes in Nepal’s economic development, as per private sector players.

Meanwhile, experts have said that it would be challenging for the country to generate any significant returns by operating its own ship. For instance, neighbouring India has failed to generate profit from the Shipping Corporation of India, the government-owned shipping company.