Forum (Spotlight Weekly)

Aspirations Of Birgunj Dry Port: Myth Or Reality?

By ANANDA B. SHRESTHA

Although different improved procedures and rules have been adopted from time to time in order to facilitate the movement of traffic in transit to and from the Indian port of Kolkata/Haldia to Nepal, they have proved to be less effective and have not been able to bring the anticipated outcome. As a consequence, imports into and exports from the kingdom still seemed to be costly and uncompetitive. Therefore, the streamlining of traffic in transit with an objective to minimize the extra cost burden has become a matter of great concern for identifying some alternative modalities.

With a view to obtaining better facilitating processes, three Inland Clearance Depots (ICD) were developed under a US$28.5 million credit from the World Bank in Biratnagar, Birgunj, and Bhairahawa. In addition to those infrastructure, electronic data processing for customs duty assessment, amendments to the existing laws, rules and procedures, including the enactment of multimodal transport, act as complementary components. On the other hand, the participation of the private sector to operate and manage the system in a business-like manner over and above the traditional public sector should be considered an innovative approach to nurture, support and sustain the ICDs.

Despite having direct link of identical broad gauge from Kolkata/Haldia to Raxaul and low rail tariff structures (estimated to be about 30 percent lower than road tariff), more than 95 percent of the present transit traffic moves by road. The rail operation is associated with time-consuming formalities and process in comparison to road transport. However, the railway share, at present, is confined to only those limited cargo that are not permitted for road movement by Indian customs on the ground of preserving tranquility, safety and security.

Two road interchange ICDs at Biratnagar and Bhairahawa have already been operated by the private sector since a year and the rail-connected Birgunj dry port sprouted over 38 hectares of land could not be leased out in spite its construction being completed for more than two years. The operation of the Indian-aided 5.4-km broad-gauge stretch from Raxaul (India) to Birgunj (Sirsiya) ICD would not only be another milestone cementing the traditional relation existed between two countries but the traverse corridor of Birgunj claiming big chunk of about 75 percent traffic in transit (containerized/break bulk) to and from port of Kolkata/ Haldia would be moved faster, safe and cheaper also.

The great mission of transit-cost reduction ultimately would be possible provided that the dry port is operated and sufficient numbers of block trains are encouraged to shuttle maintaining the timetables/schedules under attractive freight charges. Similarly, the railway system should change its monolithic mode of operation by introducing simplified hassle-free procedures and documentation structuring the traffic in transit into cost-effective transmission. Therefore, in the beginning, highly motivational innovative package shouldering the liabilities should be devised to overcome the potential hurdles and threat from the strong cartel of road operation.

The crux of trade facilitation components within the country must be improved through simplified customs procedures, transport regulations, improved banking, insurance and freight forwarding. All these critical in-house factors are to be treated as complementary aspects that also have to be improved back to back with streamlining the traffic.

The target of operating the ICD Birgunj has already been delayed unexpectedly for more than two years, causing all anticipated aspirations and benefits to a low ebb. Further stalemate on the agreement would transmit a negative message to the economy, deteriorating the huge investment-oriented infrastructure and the expensive material handling equipment (reach stacker) and defeat the highly anticipated aspiration of the public at large on the eve of World Trade Organization membership.

Keeping the multiple dimensions of foreign trade in view, the proposed ICD Birgunj (Sirsiya) should not be kept idle at the national cost reflecting illusion over the high-profile objective. The railway operational agreement should be treated by all participating stake holders as a continuous approach of streamlining mechanism and should not be aimed at resolving all the issues with a single stroke as last and final arrangement.

(The author is former executive director of Nepal Intermodal Transport Development Board.)