Nepal Says 'No Thanks' To Delayed Chinese Aid, To Self-Finance Crucial Highway Project

The Nepali government has decided to decline a long-awaited economic and technical package from the Chinese government, for upgrading the Araniko Highway which connects Kathmandu to Kodari near Nepal-China border. It was originally promised nine years ago.

Instead, Nepal will utilise its own resources for the project, citing delays in the disbursement of funds.

In 2015, Chinese President Xi Jinping assured then-Nepal President Ram Baran Yadav that Beijing would provide over 900 million RMB ($123 million) for the highway's upgrade during their meeting in Hainan.

This Chinese aid would have facilitated the enhancement of the 115-km highway that links Nepal with China. A significant portion of the Araniko Highway was originally constructed by the Chinese government in the 1960s.

However, the April 2015 earthquakes severely damaged several sections of the highway. Despite multiple reminders, the Chinese government did not release the promised funds.

Nepal has allocated Rs 3.6 billion from its own budget to undertake maintenance work along a 26-km stretch of the highway and to manage landslides, based on a detailed project report prepared by the Department of Roads.

During a recent event organised by the Centre for Social Inclusion and Federalism in Kathmandu, Madhav Sapkota, a lawmaker from Sindhupalchok district, expressed frustration over the prolonged wait for the promised aid, reports Firstpost.

Sapkota, who has been a strong advocate for the full reopening of the Tatopani border and facilitating cross-border movement of goods and people, noted that China now recognises the strategic advantage of the Tatopani border for trade compared to Keyrung. “The true potential of the Tatopani border will be realized once the highway leading up to it is repaired to prevent occasional flooding and landslides,” he said.

He also highlighted that post-Covid automation by four large Chinese companies operating in Nepal, along with the use of loaders and machinery, has led to significant job losses for Nepalis.