The Jayanagar-Kurtha cross-border railway project, which has been operational since April 2022, is at the risk of halting its operations as its contract expires by the end of next week. The government needs to take a decision within the next few days to keep it running.

The rail-link was flagged off jointly by Prime Minister Sher Bahadur Deuba and Indian Prime Minister Modi in April 2022 and was considered a milestone in strengthening cross-border connectivity between Nepal and India.

For the operations, the Nepal Railway Company (NRC) had signed a commercial contract with the Indian company, the Konkan Railways Corporation Limited (KRCL). The KRCL has been helping the NRC run rail operations for the past nine months. However, the contract, as per sources, will expire by the end of next week.

Senior officials at the Ministry of Physical Infrastructure and Transport said that as the contract with the KRCL is expensive, the Nepali side is thinking of running the railway on its own.

“If we put together the needed technical manpower from Nepal and India, we can operate it on our own and save Rs 300-400 million a year in the process,” said a senior official at the ministry.

“We want to operate the project with the help of our own people and technical manpower. However, we are also mulling alternatives, including taking technical support from a nearby Indian railway station like Samastipur,” he added.

“We are considering two or three alternatives to operate the railway after the expiry of the contract with KRCL,” said Balaram Mishra, chief administrator of the Railway Board.

He said one alternative is to extend the contract with the KRCL. The other is to hire retired Indian railway technicians to operate the railway after terminating the contract with the KRCL.

The KRCL has been providing 28 different railway technicians including engine drivers whom the local railway administration has had to pay hefty amounts in perks and salaries.

As the Nepali side does not have adequate technical manpower to run and operate the railway, the local authority has been handling only groundwork and staff management.

“On the other hand, the Ministry of Finance has told us it is not going to give us a single penny, so we have to generate the revenue to run and operate the railway on our own. We are in a dilemma about what to do,” said Mishra.

Unless the NRC extends the contract with the KRCL, Nepal will have to assume the responsibility of the operations of this rail link after the contract’s expiry. However, it is unclear if Nepal has in these past nine months developed capabilities for rail operations, including recruiting trained and skilled workforce to continue the operations.

“So we are thinking of extending the KRCL contract until we are capable of running the railway on our own,” added Mishra.

A KRCL team is coming on a visit to Nepal to hold final negotiations ahead of the expiry of their contract. In terms of connectivity, this is Nepal's first cross-border broad gauge rail link and the first rail link between the two countries to be operationalized since the rail services were halted in 2014 for infrastructure-upgrade.

If the contract with the KRCL is not extended, the cross-border railway will come to a halt, said another official at the Nepal Railway Company. As of now, the chances of Nepal bringing Indian railway technicians are slim due to a variety of reasons. If the train services were to be halted, it would adversely impact the people-to-people connectivity between India and Nepal.

In June 2022, India's "Bharat Gaurav Train" on the Ramayana circuit brought over 500 Indian tourists to Janakpurdham station, utilizing the newly inaugurated rail-link. Further, as the project was built with technical and financial assistance of the government of India worth some 5.50 billion Indian rupees and as the rail link was inaugurated by the prime ministers of the two countries, rail operations may be an important point of future discussions between the two countries.

Already, India has highlighted, through official channels, severe manpower and security-related issues in the operationalization of the rail link to Nepal.

Pending dues of the NRC to the KRCL for operationalization of the rail link may further complicate matters, if they are not cleared with priority, said officials. Even prior to the inauguration, there was a concern over lack of availability of ground manpower in Nepal and that had delayed the project’s operationalization. Two Diesel Electrical Multiple Unit rakes were procured from India in September 2020.

On Monday, senior officials at the Ministry of Physical Infrastructure and Transportation also met to discuss various alternatives to operate the railway and reach a conclusion prior to the contract’s expiry.

“We are mulling different alternatives,” said Niranjan Jha, general manager of the Nepal Railway Company. “We want to assure that the railway service will not close down. We have some alternative plans to run and operate the railway, which we do not want to disclose to the media. But things should be clear in another two days or so.”

The stoppage to the rail link would not only deprive the people of the two countries of a convenient mode of transport, it would also prevent the economic benefits accruing to the surrounding areas from the rail operation.

The NRC recently put out an advertisement to hire loco-pilot and other technicians in order to operate and run the railway services.

The officials said given the situation, the Ministry of Physical Infrastructure and Transport and the NRC need to seek a credible financial backup plan for the railway.

“Either the Ministry of Finance ministry should release a loan or invest in the project, but we are yet to seek any financial backup from the ministry,” said one NRC official. “We will make some concrete decisions within this week, and the rail service will not be halted.”