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Development and Operation of Dry Ports in Nepal Sarad Bickram Rana, Executive Director, Nepal Intermodal Transport Development Board (NITDB) Kathmandu, 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 NEPAL Area : 147,181 Sq. Km. Population: 26.5 Mill. GDP Per capita : 700 $ Kathmandu 3 Foreign Trade Situation Status of Nepal as per Doing 177th out of 189 Business Report Export Cost per container US$ 2,400 Export Time 42 days Import cost per container US$ 2,295 Import Time 39 days Stream Share of Total Trade(2012/13) Export 11% Import 89% 100% India 66% Overseas 34 % 100% 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 Trade Corridors (Major) Yari Nechung Rasuwa Kimathanka Olangchungola Dryports/ Inland Clearance Depots under operations Dryport under construction Proposed for future construction 6 Transport Infrastructure (2013) Roads Local Roads (50,943 Km) Strategic Roads (11,636 Km) Railways Jayanagar (India) - Janakpur (Nepal) Raxaul (India) – Birgunj (Nepal) (51 KM) (5 KM) Airfields 48 Nos. (registered) Dryports Road based (3+1) Rail based(1) 7 Policies for Development of Dry ports • 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 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 Institutional Arrangements Nepal Intermodal Transport Development Board (NITDB) Secretary, MOCS Chairperson Members Members (Public Entity) (Private Entity) Deputy Governor, NRB President, FNCCI Director General, President, NCC Customs Joint Secretary, MOPPT President, NEFFA Executive Director (Secretary) Perfect PPP Model 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 National Planning Commission Ministry of Ministry of Commerce & Urban Supplies Development Relevant Ministry Agencies of Physical Developer/ Infrastruct for Operator ure and developme Transport nt of ICD Ministry of NITDB / Finance NITDA Ministry of Environment 12 TMC Multimodal Customs Transport Operators Agencies Customs related to Freight Agents Operation Forwarders of ICD Shipping Lines Banks Quarantine 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 KAKARBHITTA TATOPANI 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 UNESCAP BhairahawaDRY Kakarbhitta Birgunj PORTS Biratnagar Tatopani (Under Construction) 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/Isseues At 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 treaties At 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 transport infrastructure make international trade more expensive and cumbersome • Cost of logistics and transit transportation for landlocked countries 15% higher than coastal countries • Dryports play significant role in reduction cost in the case of land locked countries • International agency should focus on bringing out guidelines related to transshipment, port leasing out, Registration of LOCODE, Locate dryport on the international shipping map, etc. 25 Thank You. 26.
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