The Nepalese request has to be viewed in the larger context of a few other recent developments.

The former Himalayan kingdom has just finalised a strategically significant power supply project to be entirely funded by China. This will be the first Sino-Nepalese bilateral project in Nepal’s power generation/supply sector.

In this sector, Nepal is already partnering India in a dozen big investment hydropower generating projects, with Delhi’s financial help and expertise. Some of these are currently in different stages of execution.

Apparently Nepal now prefers to utilise additional assistance to strengthen its infrastructural development involving other countries as well, to do away with a single-source dependence in such matters.

Observers feel occasional diplomatic tensions with India and its bitter experience during the unfortunate economic blockade Nepal faced in 2015 during the tenure of the first NDA government, have spurred the country’s policymakers to widen their regional diplomatic options. As a strong regional power, China’s economic clout and the prospect of other assorted long term benefits were too attractive to be ignored by Kathmandu’s present power elite.

The shift towards China can be seen as part of the negative diplomatic price India has had to pay for the ill-advised economic blockade. However there is no reason to suggest that China has scored big over India in the diplomatic stakes as of now.

Despite benefitting from substantial financial assistance from Beijing in recent years, people of Nepal have frequently demonstrated against China’s political leadership, as well as against Chinese companies/agencies working in various projects for alleged instances of corruption, violation of local laws, alleged encroachments on Nepalese territory close to the international border and related matters.

To deal with the proposed power project first: Nepali media reports suggest that with its modalities still under discussion, work would take 3 to 4 years to complete. Nearly 100 kilometres long transmission lines would be laid, 16 kms within Nepal and the rest through China, from the international border to enable the supply of up to 5000 megawatts from the North. It is called the Jirong-Kerung-Rasugawadhi-Chilime 220 KV transmission scheme. China would provide the money as outright grant.

A joint bilateral statement outlining the first sketchy details of the project had been released in September this year, following Nepalese Prime Minister P. K. Dahal’s visit to China. Steps are being taken to build a substation at Chilime hub in Nepal, to ensure that if necessary, immediate supplies even on a minor scale could be started, to meet growing Nepalese requirements.

Meanwhile, Nepal’s request to India to reduce the mandatory purchase of at least 50% of Indian-sourced items needed to carry out elaborate bilateral Roads/highways development projects etc, follows a recent concession Delhi had allowed for Bangladesh following official negotiations earlier this year.

The Indian content-buying requirements had been affixed at 75% for Indo-Bangla bilateral development projects, even as Bangladeshi authorities demanded a reduction to 50% at least. This has been now officially approved by Delhi, bringing major relief for Bangladesh government, various contractor and suppliers. India has committed an investment of around $1 billion in such projects to be implemented jointly in Bangladesh over the next few years.

As for Nepal, initial requests seeking similar relief from India had been made since 2014 and eventually the Indian content purchase requirements were reduced from 75 to 50%.

Now that India has become involved in highway/road related development projects whose implementation would stretch beyond the medium term involving an expenditure of at least $1.65 billion , pressure is mounting in Nepal to ensure that procedural and other delays are kept to a minimum.

As it is, Nepal has to deal with major cost overruns in most infra-related development projects, because of frequent earthquakes, landslides and other natural calamities beyond human control. The seismologically sensitive high Himalayan territory itself remains a major challenge for any developmental activity.

Work having started already in some bilateral projects, contractors and concerned agencies are complaining of unusual delays occurring mainly from the Indian side on account of the fixation of prices of items to be purchased . Often prices agreed on initially have to be revised and renegotiated due to market fluctuations and changes in Indian laws. This leads to long delays in ongoing construction and other operations in Nepal.

A much simpler and timely solution to such problems could be worked out in certain instances by allowing the immediate purchase of items at reasonable prices from domestic suppliers/sellers in Nepal. It would be a major help therefore, if India agreed to reduce its mandatory sale of homegrown items from 50 to 30% , for Nepal-based projects, Kathmandu-based sources suggest. (IPA Service)