A NATIONAL TRANSPORT SYSTEM FOR NEPAL Including an Investment Program for the Third Plan 1965/66-1969/70 Public Disclosure Authorized (In three volumes) U N N-38 VOL. 2 VOLUME II Public Disclosure Authorized SUPPORTING TECHNICAL PAPERS AND DISCUSSIONS Used as Background In Preparing the Transport Plan Public Disclosure Authorized Report of a Mission organized by the INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT at the request of THE GOVERNMENT OF NEPAL Public Disclosure Authorized Washington, D. C. June 1965 CURRENCY EQUIVALENTS U.S. $1 NRs 7.619 NRs 1 = U.S. $. 131Z5 TABLE CF CONTENTS Volume II. Supporting TechnJical-lPapers and Discussions Page No. Chapter 4 Background and Trends in the Economy 82 A. Geographical Features and Climate 82 B. Population 83 C. National Income 83 D. Agriculture 85 Present Pattern 85 Future Potentials 86 E. Forestry 92 F. Industry 95 G. Power 96 H. Tourism 97 I. Minerals 98 J. Direction of Trade and Location of Markets 99 K. Internal and External Finance 101 Public Finance 101 External Trade and Payments 102 External Reserves and Debt Position 103 Chapter 5 A Summary of Economic Activity, Transport Needs and Transport Plans by Geographical- Engineering Areas 105 A. The Ilam Area 105 Economic Features 105 Communications 105 Objectives 107 Master Plan 107 Five-Year Plan 107 B. The Arun-Tamar Basins 108 Economic Features 108 Communications 109 Objectives 109 Master Plan 109 Five-Year Plan 110 C. The Sun Kosi Basin 110 Economic Features 110 Communications ill Objectives 111 Master Plan 111 Five-Year Plan 112 Page No. D. The Far Eastern Terai 112 Economic Features 112 Communications 113 Objectives 114 Master Plan 114 Five-Year Plan 115 E. The Central Network 116 Economic Features 116 Communications 118 Objectives 119 Master Plan 119 Five-Year Plan 120 F. The Eastern Terai 121 Economic Features 121 Communications 122 Objectives 123 Master Plan 123 Five-Year Plan 124 G. The Gandak Area 125 Economic Features 125 Communications 126 Master Plan 127 Five-Year Plan 128 H. The Western Terai 128 Economic Features 128 Cormmunications 130 Objectives 131 Master Plan 131 Five-Year Plan 131 I. The Piuthan-Sallyan Area 132 Economic Features 132 Communications 134 Objectives 134 Master Plan 135 Five-Year Plan 135 J. The Karnali Area 135 Economic Features 135 Communications 137 Objectives 137 Master Plan 138 Five-Year Plan 138 K. The Dandeldhura-Doti Area 138 Economic Features 138 Communications 140 Objectives 140 Master Plan 141 Five-Year Plan 141 Page No. L. The Far Western Terai 141 Econoriic Features 141 Communications 143 Objectives 144 Master Plan 144 Five-Year Plan 145 Chapter 6 Technical and Economic Paers in of Road Plan 146 A. Definitions 146 B. Various Types and Construction Cost of Roads to be Built in Nepal 146 General 146 Specific 147 (a) Low Terai Area 148 (b) Foothill Area 149 (c) Midd'Le Terai Area 151 (d) Kathmandu Valley 151 (e) Hill Area 152 C. Cost of Road Maintenance 154 Unit Cost of Road Maintenance 154 Maintenance Cost of the National Highway System during and after the Third Plan 154 D. The Kinds and Costs of Road Studies 156 Feasibility Studies 156 Engineering Design and Tender Documents 156 E. Detailed Program for Feasibility Studies and Construction Projects within the Third Plan Period 157 F. Consequences of Construction of Highways on the Total Cost of Transportation 159 Roads in the Terai 159 Roads in the Hills 161 (a) Dhankuta to the Dharan Road 161 (b) Narayanghat-Bandipur-Cheppeghat Road 162 (c) Bhairawa to Pokhara 163 (d) Krishnagar-Piuthar. Road 164 G. Impact of Road Construction on the Budget and Foreign Exchange Situation 165 Consequence on the Budget 165 Consequence on the Foreign Exchange Position 166 - iv - Page No. Chapter 7 Proposals for Strengthlening of the Road Department 167 A. General Organization of the Proposed Road Authority 167 B. Investment Required for the Strengthening of the Road Department 173 C. Annual Operating Costs of Road. Authority 176 Chapter 8 Technical and Economic Papers in Support of the Railway Plan 177 The Birganj.-Hitaura Corridor 178 The Basic Problem 179 Chapter 9 Technical Papers in Support of the Air Tralsport Plan 188 A. Airports 188 B. Airport Design Considerations 189 C. A Master Plan for Airports 191 Bhairawa 191 Bhadrapur 192 Bharatpur 192 Biratnagar 193 Dang 195 Dhangarhi 196 Gurkha 196 Janakpur 197 Kathmandu (Gaucher Field) 197 Nepalganj 199 Pokhara 201 Silgarhi-Doti 201 Simra 201 Tumlingtar 202 D. Navigation Aids 204 E. Mleteorology 205 F. Summary 207 Chapter 10 Details of the Strengthening of the Organization of Royal Nepal Air Lines 208 A. Organization 208 B. Flight Operations 212 Flight Staff 213 Page No. C. RNAC Operating Costs 214 D. Aircraft Maintenance 218 E. Traffic and Sales 220 Routes 223 Scheduling 225 Reservations and Space Control 227 Fares and Charges 228 Advertising Promotion 229 F. Financial Needs and Accounting Practices 231 Financial Needs 231 Accounting Practices 235 G. Aircraft Selection 236 Chapter 4 BACKGROUND AND TRENDS IN THE ECONOMY A. Geographical Features and Climate 1. Taking all factors into consideration it is apparent that nature has interposed some major obstacles to the provision of an adequate trans- portation network in Nepal. 2. Some of the geographical and climatic features which have impli- cations for the development of transport in Nepal are the following: Nepal is a land-locked country, with some of the most rugged and difficult mountainous terrain in the world. Topographically the country divides into three principal river basins: 1) the Kosi, 2) the Gandak, and 3) the Karnali. There are also a few lesser basins. Generally these basins run north and south. Crossing these basins are five main longitudinal belts: 1) the "Terai," which is low, flat, fertile land adjacent to the border of India; 2) the forested foothills ranging from the Terai to about 1,000 ft. eleva- tion; 3) the rugged Siwalik and Mahabarat mountain ranges, rising up to 10,000 ft., referred to as "the Hills" between which are some valleys, called the "Inner Terai"; 4) the mountainous area between the Mahabarat range and the Himalayas which is formed by the valleys of the great Himalayan rivers and their tributaries which are often narrow with steep slopes; and 5) the main Himalayan mountain range, rising to 29,000 ft. In the Terai, due to the low slope of the land and heavy water flow during the wet season, some rivers have a tendency to shift their beds. There is wide variation in water depth during flood season. The climate ranges from the sub-tropical in the Terai to arctic in the Himalayas. More than 80 per cent of the rainfall occurs during the monsoon season (see Table A-4). The monsoon season extends for a four-month period from June to early October and is a dominating factor from the point of view of air and road transportation. - 83 - B. Population 3. A census in 1961 estimated total population at 9.4 million (Table A-1). The population is almost entirely rural, with only 3 per cent living in urban areas (Table A-2). 4. Principal population concentrations are shown by the shaded areas on Map No. 3 which has been abstracted from information on the Indian survey maps. Some 59 per cent of the population lives in the Hills with 27 per cent of the cultivated land, 15 per cent lives in the Kathmandu Valley with 2 per cent of the cultivated land, and 36 per cent lives in the Terai with 62 per cent of the cultivated land. 5. These concentrations reflect historic conditions and will change gradually with the developments in malaria eradication, industrializa- tion, and irrigation. Outside of Kathmandu itself, there are no major cities, though there are several smaller urban centers located in the Terai along the Indian border, and a few townships are beginning to emerge in the foothills and hill areas, where there is some concentration of new economic activity. 6. The 1961 census put the current rate of population growth at 1.6 per cent per annum. For the purpose of this report the rate of population growth 1965-69 is assumed to be 1.9 per cent, giving a 1970 population of 10.9 million, and a 2.2 per cent rate of growth from 1970-74 giving a 1975 population of 12.2 million (see Table A-3). These assumptions give a total growth of 1 million in the span of the Second Plan period, and 1.3 million in the subsequent five-year period. It is assumed that a large part of the 1965-69 population increase will be absorbed in the rural areas. C. National Income 7. A very tentative official estimate placed the 1961/62 Gross Do- mestic Product (based on market prices) at NRs 3,680 million, giving a per capita income of NRs 390.4 or U.S.$51.37 (see Table B-1). The agri- cultural and forestry sectors were estimated to have contributed 63.5 per cent of the total product. Observation and comparison with neighbor- ing countries based on personal judgments indicate that even at the date of the estimate the absolute level of income may have been higher than implied by these figures. Housing standards in Nepal are generaIly better than in neighboring countries and the abject misery evident in countries with similar income levels is largely absent. It seems probable that the method of computation used, coupled with incomplete data, might have re- sulted in too low a figure for the incomes, particularly by imputing too low a value for output in the subsistence sector.