China will start construction of Larcha Dry Port this year

KATHMANDU, Aug 31: China has agreed to start the construction of much-awaited dry port at Larcha in Sindhupalchowk this year. Once operational, the dry port is expected to ease the flow of goods imported from the Northern neighbor through Tatopani customs and substantially bring down the transport cost of the imports.



As per the recently signed agreement between the two countries, China has pledged to initiate the process of constructing the strategically vital Larcha Dry Port by the end of 2011.[break]



The dry port, which is to be constructed on the turn-key basis with a grant assistance worth Rs 270 million from China, is scheduled to be completed in two-and-a-half years from the date the construction begins,” Sarad Bikram Rana, executive director of Nepal Inter-model Transport Development Board (NITDB), told Republica.



Though feasibility studies for the projects were completed three years ago, construction of the dry ports in Larcha and Rasuwa - the second largest customs office after Tatopai along the northern border - has been delayed.



“China has committed that the construction of dry port at Rasuwa will begin once Larcha Dry Port is ready,” said Rana. The government is still to ascertain the location for the proposed Rasuwa Dry Port, which lies just opposite to Kerung in Lhasa.



In view of over-congestion of containers in Tatopani customs and over-dependence on warehouses in Khasa for Nepali imports, Larcha Dry Port is expected to facilitate better handling of goods and ensure unhindered delivery of imports.



“Chinese containers which are far larger than Nepali containers can deliver the goods directly to Larcha once the dry port is constructed,” said Rana. The dry port, which would be spread over 500 ropanies of land, can accommodate at least 200 containers at a time.



Most of the trade with China happens via the Tatopani customs, which will directly benefit from the Larcha Dry Port.



Nepali trade with the world´s second largest economy is in huge deficit with total import of goods being over six times more than Nepal´s exports. Though China has been providing duty free access for more than 400 Nepali goods, Nepal has so far been unable to benefit from this provision because of weak supply chain infrastructure.



According to Trade and Export Promotion Center (TEPC), imports of goods from China touched Rs 38.22 billion during the eleven months of the fiscal year 2010/11 against the export worth Rs 550 million. During the fiscal year 2009/10, total trade deficit of Nepal with the Asia´s largest economy was Rs 38.29 billion.

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