Nepal signed the ‘BRI framework agreement’ in May 2017 with China during the then Prime Minister of Nepal Pushpa Kamal Dahal, Prachanda’s visit to Beijing.    It quickly identified more than 30 projects for Chinese assistance. This number was later pruned to nine, considering Nepal’s precarious finances, as also fears of a Chinese debt trap, and ambiguity in terms and conditions besides environmental concerns voiced by BRI beneficiary-nations.

Neither the 2017 agreement nor the implementation programme has been made public or presented in Parliament so far.

Significantly, till date, not a single BRI project has been implemented in the Himalayan nation though Kathmandu and Beijing are said to be in ‘dialogue’ at the highest level.  The subject figured during the visit of Chinese President XI Jinping to Kathmandu in October 2019.

Also, during Nepali leaders’ visit to Beijing.

For reasons wrapped in Maoist mystery, the two countries have made precious little progress in advancing what is essentially Xi’s pet project for geo-political and strategic reach.

China is still said to be very keen to give a big push to BRI in Nepal without further loss of time. Apparently, the Bamboo capitalist wants to send a message to the world that it is a Good Samaritan out to help nations hit by funds crunch for big ticket projects.

Chinese Vice Foreign Minister Sun Weidong was at his persuasive best as the head of a high-level delegation to Kathmandu in June (last month) in his discussions with Nepali leaders. But modalities on funding, work terms and work schedule remained abracadabra.

Both sides agreed to meet again on a date yet to fixed.  

Four months ago, Nepali foreign minister was in Beijing on a similar mission but failed to achieve any breakthrough.  

The bone of contention is the changes Kathmandu wants in the draft agreement forwarded by Beijing in 2022.

Nepal is seeking funds as well as technology as grant assistance. This demand was first articulated when Nepali Congress leader Sher Bahadur Deuba was the Prime Minister.

Kathmandu case is that it is a least developed country and cannot afford costly loans.  

On 25 June, Prachanda made out a case for grants on priority, and loans at the interest charged by Bretton Woods twins- the World Bank and the IMF.

Speaking in Parliament, Prachanda, who has since made way for pro-Beijing K. P. Sharma Oli, categorically stated that Nepal’s priority is grants for BRI projects and not loans.

He said Nepal would sign the agreement with China for implementation of these projects “only after ensuring we don’t not fall into a debt trap.”

Pokhara Going Hambantota way….?

Kathmandu is already facing repayment problems with the Exim Bank of China from which it took a loan of about US $ 2.15 million for Pokhara airport project -construction of international terminal and renovation of the old airport- in central Nepal. The repayment is scheduled to begin from early 2026.

Pokhara on Phewa Lake in central Nepal is a major attraction, both for the international Buddhist tourists and mountaineers.

To cash in on the tourist boom, the international terminal was inaugurated on January 1, 2023 but international flights are yet to begin. This has translated into a major fund crunch prompting a SOS to China to convert the loan into a grant.

The demand is met with a blunt no from China thus far even as Nepal is staring at the prospect of Pokhara going the Hambantota way.

The reference is to the plight of Colombo which had to give on long term lease to the Chinese the Chinese built port as a rival to Singapore.

If Pokhara indeed goes the Hambantota way, it could end up as a Chinese air base, close to the Indian border. Not only this airport, there are some other BRI ventures coming up quite close to Nepal-India   border.

India is keenly watching therefore the unfolding geo-political developments in Nepal.   

India has never felt enamoured by Xi’s flagship.  

One reason for this reservation is the China -Pakistan Economic Corridor (CPEC) from Kashgar in North-west China to the fishermen village of Gwadar on the Arabian coast of Pakistan, which cuts through Gilgit – Baltistan belt of Pakistan occupied Kashmir (PoK).   

On its part, the United States has rejected the BRI adventure for Xi’s global hegemony.

Italy was the only   G-7 nation to get carried away by Xi rhetoric. It has since washed its hands off BRI citing adverse geo-political and strategic factors.  

The latest ‘sitrup’ on BRI is that China itself is going slow on its cross-continental dream with Yuan troubles at home.

–Rattan Saldi, New Delhi