Vy­ing for the Nepal cargo

While Visakhapatnam Port is at­tract­ing the Nepal cargo with its ef­fi­cient in­fra­struc­ture, the Kolkata and Hal­dia Ports are also pulling up their socks to gain back the lost busi­ness. Mean­while, China through its One Belt, One Road ini­tia­tive is try­ing to

Maritime Gateway - - Contents - By Omer Ahmed Sid­diqui

While Visakhapatnam Port is at­tract­ing the Nepal cargo with its ef­fi­cient in­fra­struc­ture, the Kolkata and Hal­dia Ports are also pulling up their socks to gain back the lost busi­ness. Mean­while, China through its One Belt, One Road ini­tia­tive is try­ing to shift the Nepal tran­sit trade to it­self.

Acon­tainer train car­ry­ing Nepal bound cargo in­clud­ing pulses, gar­ments and elec­tronic goods im­ported from China and Korea was flagged off from Visakhapatnam Port last month, mark­ing a new mile­stone in the Indo-nepal cargo move­ment. The train will cover a dis­tance of 1,350 km, in­clud­ing 800 km in In­dia, be­fore reach­ing Nepal to un­load 2.1 lakh tonnes of cargo. The rail en­ters Nepal through the Rax­aul-bir­gunj en­try point.

Ear­lier, Kolkata and Hal­dia served as gate­way to Nepal, but con­ges­tion in Kolkata Port is one of the rea­sons for Nepal look­ing at Visakhapatnam Port as an al­ter­na­tive. Ac­cord­ing to a BIM­STEC study, cargo ar­riv­ing in Hal­dia takes 11.5 days to reach Bir­gunj in Nepal by rail, cov­er­ing a dis­tance of 680 km, against the 22 days’ sea travel from Shang­hai to Kolkata. The cost of trans­port­ing cargo from Kolkata to Bir­gunj is much the same as the sea freight.

“Visakhapatnam gives the ad­van­tage of cheaper ocean freight as they can bring in larger ves­sels. The haulage charges for rail­way move­ment from Vizag to Nepal will be off­set by the cheaper ocean freight," re­veals P L Haranadh, Deputy Chair­man of the port. It has been re­ported that, due to ef­fi­cient cargo han­dling, and flex­i­ble of­fers from Maersk Line and CONCOR, which have monopoly rights to take rail­way rakes to Nepal, Visakhapatnam Port op­er­a­tions are cheaper than those at Kolkata.

Mean­while, Hal­dia Dock Com­plex is try­ing to woo Nepali traders by of­fer­ing sev­eral con­ces­sions, such as 10 days’ free time for road-bound con­tain­ers, 20 days’ free time for con­tain­ers to be moved by rail, con­ces­sional box rates for haulage and ter­mi­nal charges have been in­tro­duced. CONCOR has re­duced the tar­iff for move­ment of con­tain­ers from Hal­dia to Bir­gunj and back, and agreed to carry min­i­mum 60 teus di­rectly from Hal­dia without levy­ing ad­di­tional freight with the op­tion of re­turn­ing the empty boxes ei­ther at Hal­dia or Kolkata.

G. Senthil­vel, Deputy Chair­man, Hal­dia Dock Com­plex has in­formed that there was no short­age of trains for Bir­gunj from Hal­dia and com­mit­ted to of­fer prompt load­ing of con­tain­ers without levy­ing any ad­di­tional charges. Move­ment of Nepal bound cargo from Hal­dia has been on a de­cline re­cently.

To fur­ther re­duce the cost and time for mov­ing Nepal bound cargo, the In­dia-nepal Elec­tronic Cargo Track­ing Sys­tem (ECTS) will soon be im­ple­mented to fa­cil­i­tate move­ment of traf­fic-in-tran­sit be­long­ing to Nepal from the port of ar­rival in In­dia. Cur­rently cargo clear­ance is done through phys­i­cal in­spec­tion which is time-con­sum­ing and costly for busi­ness. ECTS will re­duce cost and time as it speeds up cargo clear­ance at bor­der cross­ings.

Trade im­bal­ance

In 2015, Nepal im­ported goods worth $6.6 bil­lion and ex­ported goods worth $660 mil­lion only. About 60 per cent of Nepal’s ex­ports and im­ports are routed through In­dia. Nepal’s ex­port to third coun­tries is very low. For the past 13 years, more than 96 per cent of con­tain­ers en­ter­ing Nepal car­ry­ing third-coun­try im­ports from In­dian

port have been re­turn­ing to

In­dia empty. Of the 100 con­tain­ers bring­ing im­ports to

ICD Sir­siya of Bir­gunj, only four con­tain­ers re­turn with ex­portable goods.

The num­ber of con­tain­ers reach­ing Sir­siya ICD in­creased by 14 per cent to 33,196 in 2016/17. A to­tal of 33,196 con­tain­ers en­tered Nepal with im­ports in Fis­cal Year 2016/17, as com­pared to 20,188 con­tain­ers in 2015/16. Of them, only 1,254 con­tain­ers re­turned with ex­ports. A to­tal of 31,942 con­tain­ers, which is 96.22 per cent of the to­tal con­tain­ers, re­turned empty.

Of the 237,397 con­tain­ers that brought im­port goods to the Sir­siya ICD in the past 13 years, only 8,638 con­tain­ers car­ried back Nepal’s ex­ports.

The num­ber of con­tain­ers en­ter­ing Nepal has been in­creas­ing ev­ery year, but as the con­tain­ers have to re­turn empty, traders are forced to pay for their re­turn jour­ney as well.

Ca­pac­ity con­straints

The rail yards at Rax­aul and Bir­gunj are said to be suf­fer­ing with se­ri­ous ca­pac­ity con­straints. It took 25 hours on an av­er­age in 2016-17 to un­load a rake, against the stated ca­pac­ity to un­load two-and-a-half rakes a day. At Rax­aul the rail­ways had re­stricted load­ing on 35 of the 90 days from April to June last year. To ease con­ges­tion, the rail­ways is open­ing a new goods shed at Ram­garwa.

Im­prov­ing rail con­nec­tiv­ity

Rail ser­vice from In­dia to Janakpur in Nepal is be­ing re­vived, con­nect­ing Nepal to the rest of the sub­con­ti­nent. The Chi­nese trap

China is con­duct­ing a fea­si­bil­ity study for a rail­way line con­nect­ing Kath­mandu to Lhasa in Ti­bet, cut­ting straight through the Hi­malayas at an es­ti­mated cost of $8 bil­lion. The pro­ject is part of the "One Belt, One Road" ini­tia­tive to which Nepal has given its ac­cord. China has ex­tended its rail network in Ti­bet up to Shi­gatse and plans to ex­tend upto the Nepal-china bor­der by 2020. These cross-bor­der rail ser­vices will link Nepal’s planned eastwest rail­ways to the rail­ways from Kerung to Kath­mandu.

China con­trols only 14 per cent of Nepal’s trade de­mand, but is now aim­ing to sig­nif­i­cantly shift Nepal’s tran­sit trade from In­dia to it­self. Even though Nepal has ge­o­graph­i­cal prox­im­ity to In­dia but the high cost of lo­gis­tics makes the Chi­nese rail pro­posal seem more vi­able. Is­sues faced by Nepali traders

The tran­sit pro­ce­dures and cus­tom for­mal­i­ties on the In­dian side in­crease the cost and time for tran­sit trade. The in­fra­struc­ture at the port, the sys­tem of train for­ma­tion as well as the hand­ing over pro­ce­dure of cus­tom cleared con­tain­ers by the clear­ing agent to CONCOR are said to cause the de­lay.

The tran­sit cargo for im­port from Kolkata/hal­dia to Kath­mandu via Bir­gunj takes 16 to 27 days at times through rail and for ex­port it takes around 7-8 days by road and nearly 14-18 days till it is on board a ves­sel.

Poor road con­di­tions and old ve­hi­cles used for lo­gis­tics are the main cause of de­lays. The short­est dis­tance is Kath­mandu-bir­gunj-kolkata which is 1,256km. Dis­tance from Bir­gunj to Kolkata by rail is 704 Km and time it takes is 3-4 days and some­times it ex­tends to 15 days. ICDS have re­duced the cost of tran­sit for car­gos weigh­ing above 20 met­ric tonnes only.

The av­er­age cost of bring­ing in a TEU load goods to Bir­gunj ICD and re­turn­ing of empty costs ap­prox­i­mately $1,950.

The tran­ship­ment time taken at Kolkata/hal­dia Ports is 4-7 days. The feeder ves­sel takes min­i­mum 7-9 days to reach Kolkata/hal­dia from Sin­ga­pore or Colombo. The pres­ence of mul­ti­ple check­ing agen­cies at the bor­der in­creases the tran­sit time.

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