The then prime minister KP Oli had for the first time on May 17, 2016 said, “Nepal will now bring goods in her own ships.”
The budget for the fiscal year 2073/74 brought 10 days later mentioned that legal and institutional preparations will be made for operation of ships. But that could not be implemented even though it was included in the budget as the Oli government fell a few days later. Officials at the Finance Minister say there has been no progress on that apart from being mentioned in that budget.
CPN-UML Chairman Oli is adamant on operation of ships and has repeated the slogan multiple times in the intervening one and half years. He has now pledged to implement that through the new government at any cost. He again raised the issue of ship while unveiling the manifesto of the left alliance on November 8. “Many made fun of me when I said I will operate ship. But Nepal should operate ships, and the goods coming to Nepal must be ferried by her own ships,” he stated. “We can also make profit by renting it to others when free,” he added.
Chairman of CPN (Maoist Center), another party in the left alliance, Pushpa Kamal Dahal was with Oli when he said so. “Ship carrying Nepali national flag will be operated exercising the rights of landlocked countries to access the sea,” point 5 of the joint manifesto of the two parties states.
Oli has been selling the dream of ships even in the current election campaign. “We will make arrangements of operating ships in Pacific and Indian oceans. Nepal Congress (NC) should not be distressed if we operate ships,” he said while addressing an election rally in Jhapa on November 11.
He argues it will be easier to ferry our goods in our own ships, and a national flag carrier will also be a matter of national pride.
Many say ship is not a necessity for Nepal, and criticize Oli saying fluttering the national flag in one ship does not boost Nepal’s pride by much.
Let us first look at how goods are ferried in ships before concluding if ship is Nepal’s need or just a matter of pride.
Central member of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) Avinash Bohara, who is in cargo business, says shipping companies acts as intermediaries between the buying and selling firms. Some of such shipping companies have their own ships, while others send the goods in others’ ships.
Many Nepali importers buy goods with a condition of them being unloaded at the port in Kolkata. Fare is cheaper as the seller deals for a large quantity including that imported by other countries. Nepali importers may have to pay a higher fare when dealing for a smaller quantity.
Ships globally operate in the main lines and feeder lines. The ships operating in the main lines over very deep waters are very big and can carry up to 16,000 containers. The ships operating in the feeder lines are smaller and can carry up to 400 containers. These ships carry goods, brought by those operating in the main lines, to the ports of respective countries.
Both kinds of ships are used while bringing chicken from Brazil for KFC in Nepal, for example. The Brazilian company sends the chicken ordered for this region in a big ship that operates in the main line. Such ships also can carry other items. The ship reach the Colombo Port in around 30 days after leaving the Brazilian shores.
“The ship then unloads the goods meant for Kolkata at Colombo and moves toward its destination,” Bohara said. “A feeder vessel takes around seven days to carry the goods to the Kolkata Port from there.”
Goods coming to Nepal from Americas, Europe and Africa are unloaded in Colombo, and those coming from Australia, South Korea and other east Asian countries are unloaded at Singapore or Port Klang in Malaysia. It takes around a week to bring the goods to Kolkata in feeder vessels even from Singapore and Malaysia.
Around 43,000 containers of goods were annually brought by the sea in Nepal three years ago. It has now risen to 70,000 which means around 200 containers of goods meant for Nepal land at Kolkata each day on an average. “No ship has carried solely Nepal’s goods till date as the quantity of goods imported by Nepal is very low,” promoter of Interstate Multi Model Transport RB Rauniyar said.
India had signed agreement to allow Nepal to use the port in Vishakhapatnam two years ago. The Vizag Port is bigger than that in Kolkata and even the ships that operate in the main lines can dock there. “There were just a few ports in Kolkata and Bombay in India earlier. But almost all the coastal states of India have built a port of their own now. So, use of Kolkata Port has been less now,” Rauniyar, whose family is in the cargo business for around 40 years, added. “How many ships of which size and in which routes will Nepal operate them will be important.”
The government has already failed once while trying to operate ship without proper study and planning. A company was formed in Nepal 45 years ago to operate ship. The law about ship was formulated in 1970 and regulations a year later while Royal Nepal Ship Corporation was opened another year later.
The company’s office was in Kantipath, according to former finance secretary Himalaya Shumsher Rana. “There was plan to rent a ship and operate it but it was not implemented for reasons unknown,” he added.
Rauniyar claimed that the plan for operating ship was brought whimsically even then, and it was aborted later after realizing it was not feasible. “They could not muster courage to operate the company with investment of king Mahendra’s brother Himalaya Shah after seeing that it could not make profit,” Rauniyar reasoned. “Considering how it is impossible to operate ships solely carrying Nepal’s goods even now, there is no way it would have been possible then,” he added.
The government sold its shares in the company in 2008. “We had sold the office after concluding that the company will not operate and it would be financially better to sell the house instead,” former finance secretary Rameshwore Khanal said.
Oli has only talked about operating ship but has not revealed the kind of ship to be operated. It is not clear whether he plans to use national flag carrier to ship goods from around the globe, or use it just as a feeder vessel to carry goods to Indian ports from a few big ports elsewere.
Rauniyar opined that operating a main line vessel is virtually impossible for Nepal. “Nepal cannot make requisite investment and management for that. We don’t even need such a big ship.” he reasoned. Nepal can operate ships from Indian ports to those in Colombo, Singapore and Malaysia, but even then it will not be possible to carry only goods meant for Nepal in them, according to him. “It will take a ship two weeks to pass through these ports in Colombo and Singapore/Malaysia. We cannot operate if we have only one ship. We have to carry even others’ goods if we get three ships. We will have to compete with other shipping companies for that,” he explained.
Rauniyar argued that the bloated shipping industry is already operating at less than full capacity in lack of adequate goods to carry, and it will not be economically justifiable to operate a ship.
Former finance secretary Khanal, however, feels Nepal can bring ships to Koshi if she wishes. “Ships used to operate in Ganga waters during the Maurya rule in India and those ships used to come till Koshi,” he claimed. “India, Bangladesh and the World Bank are currently working on the project to operate ships in Ganga and Brahmaputra. Such ships can be brought up to Chatara of Sunsari if the Koshi barrage were demolished and dredging done there,” he added.
India has already started operation of a small ship in the waters of Ganga between Kolkata and Patna in 2014. Such small vessels can be brought not only up to Chatara, according to Khanal, but even to Thori via Narayani and Chisapani through Karnali after dredging. Khanal, however, said operation of ship remains a dream considering the current thinking and management.
“It is not exactly impossible. It may even be justified economically if we can operate it well and make profit,” he stated. “But ship is currently more a political slogan citing national pride than the country’s need,” he said.
UML leader Bishnu Rimal, who was political advisor to Oli when the latter was prime minister, said the Oli government tried to exercise the rights for access to the sea as a landlocked country. He revealed that a team led by the then chief secretary had completed study after visiting India and Bangladesh.
“The talk of operating ship has been started to reduce dependence on India by exercising Nepal’s rights, and to lead the country toward prosperity,” Rimal stated. “The work we started after including it in the budget have been stopped following the change of government. The new government will move the plan for operation of ship from that very point.”