Sino aid presence growing in Nepal

Sino aid presence growing in Nepal
http://www.ekantipur.com/the-kathmandu-post/2011/02/28/money/sino-aid-presence-growing-in-nepal/218958.html
eKantipur.com, KATHMANDU, FEB 28, 2011 -

China is gradually increasing its involvement in Nepal's infrastructure
development. The signing of two agreements—a soft loan for a hydropower
project and a grant for widening Kathmandu's Ring Road—on Monday
indicates China's growing interest to allocate more resources for
development assistance to Nepal.

Nepal and China on Monday signed a concessional loan agreement of Rs 7
billion from China Exim Bank for the construction of Upper Trishuli 3A
Hydropower project. The two sides also signed and exchanged Letters of
Exchange for a Chinese grant of Rs 547 million for the widening of Ring
Road along with other mutually agreed projects.

As per the agreement, the Gongabu-Jhamsikhel section of the Ring Road
will be upgraded and widened in the first phase. The 9.5-km stretch will
have four-lane two-way main road, four-lane two-way relief road, two-way
bicycle path, two-way pedestrian path, bus stations and parking lots. A
flyover and three pedestrian overpasses will also be built at Kalanki,
according to the finance ministry. Finance Secretary Rameshwor Khanal
said the Chinese assistance has some significance as this is the first
time that China has given loans to major infrastructure projects. "The
Chinese aid for Ring Road-widening project is also important, as the
project is expected to make Kathmanduites' life easy," he said.

China has been providing Nepal RMB 150 million grant every year and Ring
Road will be expanded using this amount, according to the ministry.

Nepal had been lobbying hard to get the Chinese aid for the expansion of
Ring Road for the last three years. Finance ministry, despite political
pressure, routed the grant being used for small and economically
insignificant projects towards Ring Road.

Earlier, China had shown interest in constructing Outer Ring Road in
Kathmandu Valley. However, the plan could not make headway due to the
government's failure to ensure availability of land.

According to the Ministry of Physical Planning and Works (MoPPW), China
will soon start Ring Road expansion work. Chinese experts had made
technical assessment of the road last year. "We hope the project work
starts before the end of the current fiscal year and is completed within
three years," said Kamal Raj Pandey, joint-secretary at the MPPW.
According to Pandey, there will not be any problem in expanding the road
as 25 metres of land on either side of the road is owned by the
government. "It will address the traffic congestion problem in the
Capital and reduce the level of pollution with faster movement of
vehicles," he added.

The increased aid to Nepal—both in grant and loan forms—coincides with
China's increased economic might and its global leverage. "China can
become an important development partner for Nepal in the future," said
Secretary Khanal.

According to Khanal, there is huge scope of Chinese concessional loans
to Nepal with the opening of the window on Monday. After signing the
agreements, Nepali government officials and Chinese officials held
discussions on future Chinese support to Nepal and economic cooperation
between two countries. Chinese Vice-Commerce Minister Fu Ziying said
China will encourage its private sector to invest in Nepal's energy,
transportation and communication sectors, among others, and sought
facilities for those seeking to invest in Nepal.

Nepal has sought Chinese concessional loans for the 300-km Mid-Hill
Highway, Pokhara regional international airport, Nousalgad Hydropower
Project and West Seti Hydropower Project. The two sides have already
signed a Memorandum of Understanding for Chinese aid for the Pokhara
airport. Earlier, Nepal had requested consessional loans of $1 billion
from China Exim Bank for major development projects here. "With the
signing of the agreement on Upper Trishuli 3A, we have good prospects of
investment in Nepal," said Exim Bank Assistant President Sun Ping. He
said Nepal can also utilise Exim's another window—commercial loan—for
other potential projects.

Nepal has also sought Chinese grant support for the completion of the
Ring Road project and three northern border roads—Humla Pass, Mustang
Pass and Kimathanka Pass. Nepal also wants Chinese assistance in tourism
promotion, duty free access to Nepali products in China and Chinese
private sector's investment in tourism related infrastructure,
International Buddha City, airports, highways, hydropower projects and
agro-processing industries.
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