Kathmandu dropped several BRI projects which would be completed under China’s dream project Belt and Road Initiative. Nepal signed 35 different projects under BRI during former Prime Minister KP Sharma Oli Chinese visit in 2017.
In 2017, After signing the BRI deal Nepal government had constituted the two committees to select the projects for negotiation with Chinese side, and the committee led by finance secretary chosen 35 projects for negotiation, but all these project are financed through loans with Nepal.
Nepal did not capable to bear such loans, Kathmandu trimmed down the number of projects to nine, as per Chinese advice, said two government officials to Kathmandu Post. “We had a slow start. It took time to select projects and then we trimmed down the number of selected projects from 35 to nine,” said Pradeep Gyawali, former foreign minister in the Oli Cabinet.
“As we were working on the project implementation plan and its framework, the pandemic hit, and the entire priority was shifted,” He said to Kathmandu Post.
But observers suggest that the BRI projects are not even a priority, and there are ideological and practical reasons for sluggish progress of BRI projects in Nepal.
Chinese ambassador to Nepal, Hou Yanki during a presser, had also said that how frequent government changes affect cooperation efforts.
“Nepal has a long experience of taking loans from multilateral agencies like the World Bank and the Asian Development Bank, among others, where interest rates are low and payback periods are long,” said Mrigendra Bhadur Karki, Professor at Tribhuvan University. “Nepal cannot afford commercial loans at higher interest rates.”
Officials said that they cannot say when the railway project would begin, and the other projects under the BRI are concerned. Deuba’s communication to Chinese foreign minister Wang that Nepal would prefer grants over loans also has downed the BRI prospects in Nepal.
However, in January, Chinese side had stated that it will take at least 42 months to complete the feasibility study of the railway project, as geological terrain is complicated and laborious engineering workload will become the most significant obstacles to building the cross-border railroad.
It is now clear that Kathmandu is reluctant to the Chinese project, as the Nepali Congress is now in power and the Nepali Congress has always been ideologically pro-India. After that, there has been a spurt in some American and Indian projects in Nepal, such as the US funded Millennium Corporation project which is a grant and India is also investing in hydro-projects after renegotiating its interest rates.
The observer also suggested that some geopolitical changes are affecting BRI projects in Nepal, and they do not see any progress in BRI initiatives in Nepal until the next election.
