Kakarbhitta dry port finally has an operator from the private sector after being run by the government since it was built 10 years ago for lack of takers. The inland container depot (ICD) situated on Nepal’s eastern border was designed to boost commerce with India and third countries.

TransNepal Freight Services outbid its competitors to win a Rs132.3 million contract to run the ICD for five years. The company, a joint venture with Indian multinational Allcargo Logistics, currently manages the ICDs in Biratnagar and Bhairahawa.

The Intermodal Transport Development Board which had been saddled with the responsibility of running the Kakarbhitta ICD, will be relieved of the task after one and a half months when TransNepal takes over.

“We will sign a contract with the company within a month and a half and hand over the facility to it,” said Hare Krishna Mishra, deputy director of the government agency which is under the Ministry of Commerce and Industry.

According to Mechi Customs officials, TransNepal won the bid among five hopefuls. The company quoted a minimum lease payment of Rs132.3 million for five years. The board had invited bids with a minimum lease amount of Rs90.6 million.

The port is a major trade route with India, Bangladesh, Bhutan and China. Nearly 70 percent of the foreign trade that passes through the dry port is with India. The Intermodal Transport Development Board has been managing the dry port since July 8, 2010 after it failed to attract bidders despite several calls on different occasions.

The Intermodal Transport Development Board twice published invitations for bids, but did not receive any response from potential operators. Private companies stayed away from the first and second calls for tenders saying that the ‘minimum lease fee’ was too high.

During the first tender invitation, the government had set the fee at Rs160 million for a period of 10 years. It slashed the minimum fee to Rs100 million the second time, but there were still no takers.

During the third call for tenders, the fee was set at Rs40 million, and two companies showed up; but they later backed out saying it was ‘still too high’.

Officials said that it was against the norms for the government to be involved in business-oriented activities, especially following economic liberalisation; and that it should limit its role to promoting the private sector and act as a facilitator instead.

As per the provision, the government should hand over operations management to the private sector after operating it for six months following the completion of the construction. However, the government has been operating the dry port as a stop-gap arrangement.

The dry port which sprawls over 7.5 hectares was constructed at a cost of Rs393 million provided as a soft loan by the Asian Development Bank. As per the agreement, the government has to clear the loan within 25 years of completion of construction work.

Hemendra Mohan Shahi, director of the board, said that the Asian Development Bank had a condition to fix the lease amount on a par with Biratnagar and Bhairahawa ICDs which failed to attract bidders to operate the facility.

The warehouse occupies 1,395 square metres with the goods inspection shed spread over 1,780 square metres. There is a parking area for 80 trucks. The dry port currently earns Rs25 million annually by providing warehouse and parking facilities.

The Kakarbhitta-Panitanki-Phulbari route is the shortest way from Nepal to Bangladesh through India. The 44-km route connects the Banglabandh border and is the main conduit for commerce passing from Nepal to Bangladesh. Large cardamom, tea, broom grass, ginger and vegetables are Nepal’s major export products that pass through the eastern border point.