Nepal: TRANSPORTATION AND TELECOMMUNICATIONS

TRANSPORTATION AND TELECOMMUNICATIONS



Overview: Nepal’s transportation system is generally regarded as poor and an obstacle to economic development. The mountainous terrain physically constrains the development of the transportation network, and for decades the government has lacked sufficient funds to maintain, improve, and expand the transportation infrastructure, which has thus relied heavily on foreign funding. The transportation infrastructure is concentrated in the central and eastern parts of the Tarai Region and generally diminishes north and west of the Tarai. Nonmechanized transportation is common in both rural and urban areas, and mechanized local transportation is common only in the Kathmandu Valley and to a lesser degree in Pokhara. The major modes of transportation are air and road, and trails often are used to transport goods. Railroads are minimal and have declined in quality and quantity. The Department of Transport Management oversees transportation issues, and its fiscal year (FY) 2005 budget was approximately US$462,000 based on the official exchange rate for 2004. The FY2006 budget is nearly US$686,000.



Roads: Roads are Nepal’s principal transportation mode. From 1951 to 2005, total road length increased from 376 kilometers to 17,217 kilometers, including 4,781 kilometers paved, 4,703 kilometers gravel-covered, and 7,643 kilometers classified as fair weather roads. The total road length also includes 3,028.7 kilometers of national highways. Roads are concentrated in the central and eastern regions, and the government is under pressure to expand and improve roads. Government allocations for roads have increased, but construction and maintenance costs are high because of the mountainous topography, monsoon rains, and occasional landslides. In March 2005, there were 459,224 registered vehicles, 63.5 percent of which were motorcycles.



Railroads: Nepal’s railroad system is small, outdated, and declining in use and quality. The two rail lines link to railheads in India. Government-owned Nepal Railways Company (NRC) maintains a 53-kilometer narrow-gauge rail line, which is composed of two sections that operate separately. A 32-kilometer section runs between Jaynagar in India to Janakpur in Nepal, and a 21-kilometer portion goes from Janakpur to Bijalpura. The NRC manages a six-kilometer line from Raxaul, India, to Birganj. The Janakpur line is used largely for passengers and the Birganj line, for freight. The Birganj dry port was completed in 2000 but only became operational in 2005 because of the lack of an operating agreement between India and Nepal. From 1990 to 2000, passenger traffic ranged from 725,000 to 1.7 million per year and freight traffic, from 16 to 21 tons. The Janakpur railroad has lost money for years because of low fares, overstaffing, and political intervention, and the government has expressed interest in privatizing the NRC. In 2004 the government signed an agreement with the Container Corporation of India for container service between Birganj and various Indian cities, including Kokatta (Calcutta).



Ports: Nepal is a landlocked country with little waterway transportation and no waterway ports. However, the country has two inland container depots at Birganj and Sirsiya, which primarily service cargo to and from seaports in India. Both ports have experienced extended periods of nonuse because of problems such as customs disputes with India. There also have been proposals to use Janakpur as a dry port.



Inland and Coastal Waterways: Waterway transportation is virtually nonexistent because of the country’s landlocked geographic position, mountainous topography, and deep gorges. The government has expressed interest in using waterways to connect exports with Indian markets, but feasibility studies have not been encouraging.



Civil Aviation and Airports: The government wants to expand civil aviation to overcome geographic constraints on transportation accessibility and to increase tourism. Civil aviation, however, has been slow to develop. In 2005 Nepal had 44 airports of varying standards—up from 43 in 1988—and only one international airport, Tribhuvan, located 5.6 kilometers east of Kathmandu. The number of international tourists arriving by air increased from 205,611 in 1987 to 421,243 in 1998 and then declined to 288,356 by 2004. Nepal has one government-owned airline (Royal Nepal Airlines Corporation), and 39 carriers provide international service. Sixteen carriers provide domestic cargo and passenger service. Air transportation is unavailable in 31 of Nepal’s 75 districts.



Pipelines: Nepal has no pipelines. However, on September 9, 2004, the Nepal Oil Corporation signed a memorandum of understanding with the Indian Oil Corporation to build a 35-kilometer, pipeline from Raxaul (India) to Amalekhganj (Nepal) with an annual capacity of 1.1 million tons for transport of petroleum, diesel, and kerosene.

Telecommunications: Telecommunications generally have been poor in quality and are available mostly in Kathmandu. Nepal Telecommunications Corporation (NTC) had a monopoly on telecommunications services until various pieces of legislation since 1992 opened the NTC to privatization and allowed domestic and foreign companies to provide telecommunications services. The Nepal Telecommunications Authority (NTA) was established in 1998 to regulate and promote competition in the telecommunications sector. By 2005 there were 144 licensed telecommunications providers, and the number of fixed telephone lines increased from 65,000 in 1992 to 448,639. The waiting list for a telephone line is lengthy, only 3.1 of every 100 citizens had access to any type of telephone in 2003, and nearly 50 percent of village development areas did not have a single public phone. In July 2005, Nepal had 248,820 mobile telephone subscribers and approximately 225,000 Internet users. Legislation passed in 2004 was intended to address these matters, but the government suspended many mobile telephone and Internet services on February 1, 2005. From 1975 to 2001, the number of televisions per 1,000 people increased from 0 to 8, radios per 1,000 people increased from 17.5 to 39, and personal computers per 1,000 people increased from 0 to 3.5.