Sarad Bickram Rana, Executive Director, Nepal Intermodal Transport Development Board (NITDB)

Kathmandu, Nepal

Development and Operationof Dry Ports in Nepal

Development and Operationof Dry Ports in Nepal

1

Presentation Overview

• Key Information on trade and transit situation

• Policy Guidelines• Institutional Arrangements• Related Act and Regulations• Expected Benefit• Some Major Problems• Summary

2

Kathmandu

NEPALArea : 147,181 Sq. Km.Population: 26.5 Mill.GDP Per capita : 700 $

3

Foreign Trade Situation

Stream Share of Total Trade(2012/13)

Export 11%Import 89%

100%India 66%

Overseas 34 %100%

Status of Nepal as per DoingBusiness Report

177th out of 189

Export Cost per container US$ 2,400

Export Time 42 days

Import cost per container US$ 2,295

Import Time 39 days

4

Transit Provision

Through Treaty of Transit between Nepal and India• Gateway Port (Out of major ports Kolkata Port is a

designated port )• 26 Border Crossing point• 1 rail head

Through Rail-Service Agreement between Nepal and India

• 1 rail based

Through Nepal-China Agreement• 6 Border crossing point 5

Dryports/ Inland Clearance Depots under operationsDryport under constructionProposed for future construction

Rasuwa

Trade Corridors (Major)

Olangchungola

Yari

Kimathanka

Nechung

6

Transport Infrastructure (2013)

Roads

Local Roads (50,943 Km) Strategic Roads (11,636 Km)

Railways

Jayanagar (India) - Janakpur (Nepal)(51 KM)

Raxaul (India) – Birgunj (Nepal)(5 KM)

Airfields

48 Nos. (registered) Dryports

Road based (3+1) Rail based(1)

7

• Eighth Five Year Plan (1992-97)• Environment Policy• Investment Policy• Transit and Logistics Policy• Transport and Trade Facilitation Policy• Bilateral/Multilateral Trade and Transit

Treaties• GATT/WTO, SAFTA, BIMSTEC• Nepal India Rail Services Agreement

Policies for Development of Dry ports

8

Relevant Acts and Regulation:

• Private Financing Act 2006-BOT• Foreign Investment Policy and

Technology• Land Acquisition Act-1977• Environment Protection Act/Rules-1997• Export and Import Act-1957• Customs Act-2007• Motor Vehicle Act-1993• Labor Act-1992

9

Nepal Intermodal Transport Development Board (NITDB)

Secretary, MOCSChairperson

Members(Public Entity)

Members(Private Entity)

Deputy Governor, NRB

Director General, Customs

Joint Secretary, MOPPT

President, FNCCI

President, NCC

President, NEFFA

Perfect PPP Model 

Executive Director(Secretary)

Institutional Arrangements

10

Functions of NITDB• To develop, manage and promote ICD

terminals for the facilitation of Nepal's exports and imports;

• To enter into agreement with private sector company, selected on the basis of competitive bidding, for leasing out the management of ICD terminals;

• To prescribe criteria in determining the service charges of the terminal operation;

• To conclude railway operation agreement with Indian Railways for rail movement of cargo to/from ICD. 11

Key Government Agencies involved in Dryport developments

Relevant Agencies

for development of ICD

National Planning

Commission Ministry of Commerce &

Supplies

Developer/Operator

NITDB / NITDA

Ministry of Environment

Ministry of Finance

Ministry of Physical Infrastruct

ure and Transport

Ministry of Urban

Development

12

Agencies related to Operation

of ICD

TMC

Customs

Freight Forwarders

BanksQuarantine

Shipping Lines

Customs Agents

Multimodal Transport Operators

13

Three dryports at Nepal – India border were developed in 2000 with the WB assistance; Birgunj – Rail linked with gateway port and other Indian

rail head Biratnagar and Bhairahawa – Road based

Forth dryport at Nepal – India border was developed in 2010 with ADB assistance Kakarvitta – Road Based

Fifth dryport at Nepal – China border is under construction with technical and Financial assistance from Government of PR China

14

Lease out to the private operator through international competitive biddings Initial Lease Terms – Fixed Lease Rent for 10 years Operator accumulated heavy financial loss

Revisited the contract after 2 years of operation Minimum lease rent – Base case traffic Revenue sharing (60:40) on every increment exceeding

base case. As a result operator recovered all the losses and

became no. 1 tax payer of the district.

15

Dry Ports (Roadbased)BIRATNAGAR BHAIRAHAWA

TATOPANIKAKARBHITTA

16

Dry Port (Railbased)

BIRGUNJ

17

Birgunj Dryport

Insert

Birgunj

18

Future Dryports

• ICD under construction at Tatopani on Asian Highway AH42 with grant assistance of PR China

• Pre-feasibility study of other potential dry ports– Rasuwa – 2nd Dryport at Nepal China Border – Dodhara - Chadani (Kanchanpur)-AH2

• CFS at Kathmandu Valley

19

20

DRY PORTS

Bhairahawa KakarbhittaBirgunj Biratnagar

Tatopani (Under Construction)

UNESCAP

21

Functions of Dryports

• Receipt and dispatch/delivery of cargo• Stuffing and de-stuffing of containers• Transit operations by rail/road to and from

serving ports• Customs clearance• Warehousing• Temporary storage of cargo and containers• Computerized processing of documents with

capability of being linked to EDI

22

Expected Benefit

• One stop arrangements• Reduction in Transit time and cost • Managed Warehousing • Well- Equipped Facilities • Managed Parking Facilities• Security of goods• Export Promotion• Economic and Financial Benefit• Trade Facilitation

23

Som major Problems/IsseuesAt National Level• Lack of Appropriate Road Infrastructure• Lack of Appropriate quarantine Labs• Carteling/Syndicate of Transport etc.At Bilateral/Regional• Non tariff barrier• No harmonization of clearance system• Un-realistics provisions in the treatiesAt International Level• LOCODE and its registration in the

Shipping Map• Standard guidelines for transshipment

etc. 24

In summary……

• Absence of sea ports and a poor transportinfrastructure make international trade moreexpensive and cumbersome

• Cost of logistics and transit transportation forlandlocked countries 15% higher than coastalcountries

• Dryports play significant role in reduction costin the case of land locked countries

• International agency should focus on bringingout guidelines related to transshipment, portleasing out, Registration of LOCODE, Locatedryport on the international shipping map, etc.

25

Thank You.

26