Construction work on an 18.1 km railway track linking Nepal and India has resumed after it stalled over a compensation dispute.

The broad gauge railway line from Katahari, Morang to Bathnaha in India is being built by Indian Railway Construction Company (IRCON) at a cost of IRs3.8 billion.

The Indian portion of the railway track which is 5 km long was completed two years ago. Work on the 13.1 km section in Nepal stopped following disagreements over land compensation.

IRCON has awarded the construction contract to SC Agrawal Construction Company of India. SC Agrawal has subcontracted the construction work to Trident Construction Company of India.

S Kumar Tomore, head of Trident Construction Company, said they had contracted Ready Construction of Biratnagar to place ballast on 9.5 km of the railway track.

Manoj Poddar of Ready Construction said they were aiming to complete the work by December.

The original completion deadline of the railway line was October 2016, and construction work on the Indian side was completed on schedule.

But work came to a stop on the Nepal portion of the track after landowners went to court for lack of payment. The 21 landowners who own 23 bighas of land in Katahari, which is to be made into a railway yard, have not yet received compensation. The case is pending in the Supreme Court.

Tatiya Construction started work on the track after the government acquired 119 bighas of land and handed it over to IRCON subsidiary IRCON International to build the Katahari-Bathnaha line under the Indian plan to extend electric broad gauge railway to five major industrial areas in Nepal.

The government has paid more than Rs600 million as compensation to the landowners, but work could not move forward after some landowners in Katahari filed a case in the Appellate Court against the assessment of land valuation.

The government had acquired 119 bighas of land from 565 people in Katahari, Budhanagar and Jatuwa, Biratnagar for the construction of the broad gauge railway line, and distributed compensation with a minimum valuation of Rs90,000 to Rs2.5 million per kattha.

Landowners including Bishwa Nath Majhi, Padam Prasad Gautam, Dhuranlal Majhi, Garki Majhi and Badulal Majhi of Katahari filed a case in the Appellate Court against the Compensation Determination Committee. The court ruled that the compensation assessment was not satisfactory, and the case is pending in the Supreme Court.

Poddar said they had received instructions from the local administration to move ahead with the construction work even though the land compensation case is still pending in court.

Landowners are dissatisfied with the compensation offered to them for land where the railway station platform will be built. The local administration has pledged to remove obstructions to lay sleepers on the track ballast.

Passenger and freight trains will serve Katahari after the construction of the Katahari-Bathnaha broad gauge railway. Freight trains will bring raw materials for the factories and transport their finished goods to market after the railway is ready.