Nepal, 15-17 April 2014

Training Workshop on Trade and Transport Facilitation Monitoring Mechanism (TTFMM) Nepal, 15-17 April 2014

Trade and Transport Facilitation Monitoring Mechanism (TTFMM) & Way Forward in Nepal

Cuong Minh Nguyen Tengfei Wang, Senior Economist Economic Affairs Officer ADB UNESCAP [email protected] Email: [email protected] Agenda

1. BPA Phase 1 studies in Nepal 2. Trade & Transport Facilitation Monitoring Mechanism (TTFMM)  Why is a TTFMM needed?  Integrated and Sustainable TTFMM – overview  Key outputs of TTFMM  TTFMM integrated methodology: BPA+ 3. TTFMM implementation in Nepal – Way Forward 4. Quick introduction to the rest of the workshop…

Training Workshop on TTFMM, Nepal, 15-17 April 2014 2

Corridor 4 - Kathmandu, Mugling, Narayanghat, Corridor 18 - Thimphu,Lahore, Amritsar, JaigaonSAARC, JulundurPhuentsholing, Corridors, Ludhiana, CorridorHetauda, Pathlaiya2357610 -- Thimphu, Kathmandu,SamdrupKathmandu,, Rajbiraj JongkharJaigaon MuglingMugling, Kakarbhitta, Phuentsholing,, Guwahati,, , NarayanghatNarayanghat, Panitanki Dispur , , ,, AmbalaChengrabandhaCorridor, Delhi, 9 - Malda, Ghaziabad,, Burimari Mehdipur,, HapurRangpur Rajshahi,, Moradaban, Gaibanda Natore,,, Bogra , HetaudaChengrabandhaSiliguriShillongButwalAgartala,, Phulbari,NepalgunjBhairahawa ,, Dawki AkhauraPathlaiya, ,Sylhet SiliguriBanglabandha, ,, Dharkar RupaidihaBirgunj, Sunauli, Bazar,, Phulbari, , Raxaul, Camilla,Gorakphur , NarsingdiNanpara, Rangpur, Banglabandha, Sagauli Chittagong, ,,Bahraich , Dhaka,BarabankiGaibanda, Motihari , , ,, , Bareilly,BaraigramBaraigram, Shahjahanpur, JessoreSirajganj, Khulna, , Sitapur Mongla, Lucknow, Tangail, Varanasi,, Tongi, MuzaffarfurDalkolaBograMaguraBarabanki Lucknow, Baraigram,, JessoreKatihan , Lucknow, Purnea, , Benapole,Malda Jessore, Barhi, Mehdipur,, ,AsansolKhulna, Petrapole , ,Mongla Kolkata,Kolkata,, Kolkata, Tangail HaldiaHaldia , BarhiDhaka,, Asansol Camilla,, Kolkata, Chittagong Haldia Tongi, Dhaka, Camilla, Chittagong

(click on the colors)

click on the colors SAARC Corridor 1 SAARC Corridor 6

SAARC Corridor 2 SAARC Corridor 7

SAARC Corridor 3 SAARC Corridor 8

SAARC Corridor 4 SAARC Corridor 9

SAARC CorridorRiver 5 SAARC Corridor 10

All Corridors Corridor Selection for BPA Study

This map was produced by the cartography unit of the Asian Development Bank. The boundaries, colors, denominations, and any other information shown on this map do not imply, on the part of the Asian Development Bank, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries, colors, denominations, or information. Training Workshop on TTFMM, Nepal, 15-17 April 2014 Corridor 1 (Nepal corridor)

Kakarvitta (Nepal) – Panitanki (India) – Fulbari (India) – Banglabandha (Bangladesh)

1. Nepal’s import of lead acid accumulator 3. Transit distance: 54 km [Kathmandu to 2. Nepal’s export of lentil Dhaka – 1152 km] 4. Nepal’s 1% total trade (US$ term) passes through this corridor

Training Workshop on TTFMM, Nepal, 15-17 April 2014 Corridor 3 (Nepal corridor) Kathmandu (Nepal) – Birgunj (Nepal) – Raxaul (India) – Kolkata (India)

1. Nepal’s import of Crude soya bean oil 2. Nepal’s export of carpet 3. Distance: 704 km (Kolkata port), 832 km (Haldia port) 4. Share of Birgunj customs to total trade: 44% Handling of cargo by ICD Birgunj Containerized Break Bulk Cargo Cargo No of Total No of Total MT Train TEUs Train 2008/09 178 14702 7 18242 2009/10 207 17616 81 194313 2010/11 222 19440 128 326826 Growth (%) 12.36 16.11 864.29 845.81 Source: Rajkarnikar (2013)

Training Workshop on TTFMM, Nepal, 15-17 April 2014 Study Corridors and Products

Corridor Countries Distance, Distance, Products Linked Total Transit Traded

Corridor 1 (Nepal corridor) Nepal – 1152 km# 54 km  Lentil Kakarvitta-Panitanki-Fulbari- India -  LAA* Banglabandha Bangladesh Corridor 2 (Bhutan corridor) Bhutan – 630 km^ 115 km  Orange Phuentsholing-Jaigaon-Hasimara- India -  Fruit Changrabandha-Burimari Bangladesh juice

Corridor 3 (Nepal corridor) Nepal - 1287 km$ 1047 km  Carpet Kathmandu-Birgunj-Raxaul - India  CSO** Kolkata

*Lead acid accumulator **Crude soya bean oil #Kathmandu to Dhaka. ^Thimpu to Dhaka $Kathmandu to Kolkata

Training Workshop on TTFMM, Nepal, 15-17 April 2014 Why is a TTF Monitoring Mechanism needed?

 Available international cross-country TTF indicators not sufficiently detailed and reliable  Some TTF studies have been carried out in developing countries, but often  One-off / Ad hoc assessment studies; Overlapping and not coordinated; No uniform method & approach  Lack of ownership of results, with no follow-up

Need for an integrated and sustainable mechanism: (1) To provide adequate data & information to support decision making and to monitor implementation and impact of these decisions on TTF (2) To reduce unnecessary duplication of efforts & ensure recommendations are implemented

Training Workshop on TTFMM, Nepal, 15-17 April 2014 Old Chinese Wisdom

Give a man a fish and you feed him for a day; Teach a man to fish and you feed him for a lifetime

Training Workshop on TTFMM, Nepal, 15-17 April 2014 8 Integrated and Sustainable Trade & Transport Facilitation Monitoring Mechanism (TTFMM)

Baseline study (BPA+ study)

Formulate, update and prioritize recommendations for advancing trade facilitation

Trade facilitation reform Implementation Measure, monitor and assess progress in trade facilitation Institutional arrangement (The executive body such as NTTFC)

National Human Capacity Integrated Methodology: BPA+

Training Workshop on TTFMM, Nepal, 15-17 April 2014 A Business Process Analysis

Day

20 Time-Procedure Chart 4 days 16 15 1 day 14 3 days 13 12 10 1 day 1 day 11 2 days 6 7 8 9 10 3 days 4 5 5 2 days 3 2 days 2 1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Process

1. Buy - Conclude sales contract and trade terms 8. Stuff container(s) 2. Obtain export permit 9. Transfer to port of departure 3. Arrange transport 10. Clear goods through customs 4. Arrange the inspection and fumigation 11. Handle container at terminal and stow on vessel 5. Obtain cargo insurance 12. Prepare documents required by importer 6. Provide customs declaration 13. Verify the accuracy/authenticity of exported cargo 7. Collect empty container(s) from yard 14. Pay - Claim payment of goods 10 Training Workshop on TTFMM, Nepal, 15-17 April 2014 Activity Diagram

Authorized Private Exporter (or Representative) Department of Fisheries 2.1) Have Authorized Private Inspector (DoF) product sampled Inspector and examined Exporter or Have product Representative ready for sampling Department of Fisheries (DoF) Additional examination not required Schedule the Notify the date for sampling date sample collection Additional examination required Submit Request Collect for Sampling sample Request for Collect Examine Deliver Sampling sample sample sample Record sampling Record the result result of examination Examine sample Collect Test Report Test Report Record result of examination

Collect Test Report Test Report

11 Training Workshop on TTFMM, Nepal, 15-17 April 2014 What is TRS?

Shipping company Importer, Customs, Port Authority Shipping agent Customs broker Bank, Container Yard Port Authority, Container Yard Customs Warehouse, OGAs, etc. broker Forwarder, etc. etc.

Arrival of Unloading Submission of Customs Removal cargo /Storage Declaration release of cargo 12 12 Training Workshop on TTFMM, Nepal, 15-17 April 2014 permission Destination The model

Day 4 $400 Sea transport Transport Wait at to sea port sea port Day 3 $300

Day 2 $200 Wait at border crossing/change transport mode Day 1 $100 Transport to border

500 km 1000 km 1500 km 2000 km

Point of Origin Training Workshop on TTFMM, Nepal, 15-17 April 2014 TTFMM - Integrated Methodology: BPA +

Trade-related Cargo Border Border Cargo Trade- procedures origin crossing crossing destination related before cargo point point procedures movement after cargo arrival TRS TRS

TCD

BPA of Trade Procedures

Business Process Analysis (BPA) for diagnosis of TF bottlenecks along entire supply chain Time-Cost Distance Method (TCD) & Time Release Study (TRS) to Improve/verify BPA time and cost estimates

Training Workshop on TTFMM, Nepal, 15-17 April 2014 Exporter or Representative

National Railways Reserve rail cars

Monthly railcar requirementsplan

Rail car operator Schedule deliverycars of rail TTFMM – Key Outputs Acknowledgereceipt Rail cars available

Agree conditions with operatorprivate car

Rail cars not available Schedule delivery of private rail cars

Booking request

Confirm Confirm dates provisioncars of rail  TTFM Database, including:  Description, activity diagram and related rules/regulations for each trade & transport procedure for selected products along selected corridors  Time, Cost, No. of documents and related indicators for each process/procedure [TTFM Database will be updated regularly (annually) and expanded with additional information on corridors, products as seen fit by the country]  An annual report  Presenting relevant summary information from the database to the public, as decided by the country, as well as an analysis and recommendations

Training Workshop on TTFMM, Nepal, 15-17 April 2014 15 TTFMM implementation in Nepal – Way forward

 Building on SASEC BPA study 2012-13: …  TTFMM BPA+ baseline study 2014  Strategically important corridors  Trade process (import, export, transit?)  Products (for each corridor and trade process?)  Composition of study team  Timeline

Training Workshop on TTFMM, Nepal, 15-17 April 2014 16 Proceeding of this workshop

 Day 1 and Day 2 Morning: TTFMM Training on Business Process Analysis

 Day 2 Afternoon: TTFMM Training on Time Release Study (TRS) Method

 Day 3 Morning: TTFMM Training on Time-Cost Distance Method

 Day 3 Afternoon: Implementation Plan for TTFMM & BPA+ Baseline Study 2014

Training Workshop on TTFMM, Nepal, 15-17 April 2014 17 Group exercises

Kathmandu-Birgunj-Raxaul - Kolkata  Group 1: Kolkata  Group 2: Birgunj-Raxaul  Group 3: Birgunj dry port

Kakarvitta-Panitanki-Fulbari-Banglabandha- Chittagong  Group 4: Kakarvitta-Panitanki

Training Workshop on TTFMM, Nepal, 15-17 April 2014 Training Workshop on Trade and Transport Facilitation Monitoring Mechanism (TTFMM) Nepal, 15-17 April 2014

Thank You