Three years after its last train hit the buffers, landlocked Nepal is building a new railway network to boost its ailing economy, helped by the rivalry between its powerful neighbors, China and India.
The railway to India was a lifeline for the small southern frontier town of Janakpur, used to import everything from sweets to clothes and cosmetics and fueling a vibrant border economy.
However, it fell into disrepair after years of neglect and since 2014, the train has sat stationary, its rusting carcass now a playground for local children, while Janakpur’s markets are empty.
Photo: AFP
“When the train was running, we would have a lot of business. I was easily providing [for] my family,” said Shyam Sah, whose small family-run cosmetics shop has suffered an 80 percent drop in profits since the railway closed.
Now it is being rebuilt with Indian backing, one of three new rail lines — one funded by China in the north and a third by Nepal itself — that the nation hopes will help boost international trade.
Nepal remains largely isolated from the global economy, dependent on aid and remittances.
Growth slowed dramatically after a 2015 earthquake, but is expected to normalize at 5 percent from next year — one of the slowest rates in South Asia — according to the World Bank.
It has courted its two large neighbors for investment in an attempt to plug itself into a rail network that links the far eastern reaches of Asia with Europe, but geography is not on its side.
The Himalayas form a natural border between Nepal and China, leaving it largely dependent on India — with which it shares a 1,400km open border — for the majority of its imports and exports.
Kathmandu has tilted toward Beijing as part of a nationalist drive to decrease the nation’s reliance on New Delhi.
China has responded, ramping up its diplomatic ties with Nepal, mostly through large-scale infrastructure investments.
This year, Beijing pledged US$8.3 billion to build roads and hydropower plants in Nepal, dwarfing India’s commitments of US$317 million.
Feasibility studies are also underway for a Beijing-backed railway connecting Kathmandu to Lhasa, cutting straight through the Himalayas at an estimated cost of US$8 billion.
Ankit Panda, senior editor at The Diplomat magazine, said that could be a game-changer.
“The rail line with China holds potential depending on the demand side of the equation, on how China allows Nepal to leverage that link for commercial growth opportunities,” he said.
However, it has strained relations between India and China, who are locked in a tense standoff on a remote Himalayan plateau in Bhutan sparked by a new road being built by China.
“China knows that its checkbook diplomacy with the smaller Asian states is a sore point with India, which simply cannot afford to put up the kind of capital outlays that the Chinese promise,” Panda said.
New Delhi is funding the reconstruction of the Janakpur line, rebuilding the tracks to carry broad-gauge trains that would allow it to connect to the rest of the subcontinent’s expansive rail network.
Meanwhile, Nepal is building a 945km line that is to cut across the southern plains from east to west.
Nearly a third of the track has been built, but construction has stalled for lack of funds and it is not clear when it work will finish.
Some experts warn that Nepal has become a “de facto” battleground in a geopolitical struggle for regional supremacy between India and China — a position that Kathmandu must navigate carefully.
Meanwhile, the people of Janakpur are eagerly awaiting the rail revival that is to connect them to India once again.
“When the train stopped, everything finished. Business has gone down for all of the city,” bookshop owner Rajendra Kusuwah said. “After the new rail comes, it will open doors for development.”
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