The Nepal Railway Company (NRC) that runs the Jayanagar-Kurtha cross-border railway has agreed to a temporary arrangement with India’s Konkan Railways Corporation Limited (KRCL) to continue operating the country’s sole railway service.

Officials said a commercial contract with the KRCL has been renewed for a month, subject to three months’ extension, by when they expect to find a more permanent alternative.

“We have decided to extend the KRCL contract by a month,” said Balaram Mishra, chief administrator of the Department of Railways. “We have sent a financial proposal to the KRCL, asking it to reduce its service charge so that we can extend the commercial contract. Had the extension not been made, the country’s sole cross-border railway could have halted operation as the original contract was valid only until December 26.”

The railway had come into operation from April 2022 when it was jointly flagged off by then Prime Minister Sher Bahadur Deuba and Indian Prime Minister Narendra Modi. It was considered a milestone in strengthening cross-border connectivity between Nepal and India.

Officials said that they expect the KRCL to reduce its fees. The railway is running at a loss and the finance ministry is also not helping. “We have not received even a single penny in the past 18 months,” Niramjan Jha, general manager of the Nepal Railway Company, said. “So we are requesting the KRCL to reduce its fees.”

“If the KRCL is ready to restructure the fees, we will extend the contract by three months. We are also thinking of operating the rail by striking a service contract with other Indian rail operators and individuals,” said Jha.

The KRCL has been helping the NRC run rail operations for the past nine months. As the KRCL’s commercial contract is expensive and both Indian and Nepali sides are planning to operate the rail line up to Bijualpura, Nepal needs more technical manpower. “We know carrying passengers does not make profit,” said Jha. “To earn money, we have to focus on freight service.”

The length of the railway from Jayanagar to Bijalpura will be 52 km, according to officials. The Jayanagar-Kurtha-Bijalpura-Bardibas railway is one of the five cross-border links being planned between Nepal and India. Besides this, India has already expressed its commitment to extending cross-border rail to Kakarbhitta, Biratnagar, Janakpur, Bhairahawa, and Nepalgunj by linking them to the closest Indian railway stations.

Work is underway for laying another new railway line from Raxaul to Kathmandu. Besides the Jayanagar-Kurtha-Bijalpura railway link, India is working on expanding another railway from Biratnagar to Bathnaha (India), which will be about 18 km. According to officials, before formal resumption of the newly expanded railway service, the two sides will complete technical work, including test drive, speed trial, and track inspection.

“Without money, you can only imagine how we operated for the past 18 months. We have not received a single penny for the operation of this cross-border railway. We have requested the finance ministry to release funds several times but they don’t listen to us,” complained Jha.

The KRCL has been providing 28 different railway technicians

including engine drivers whom the local railway administration has had to offer hefty perks and salaries.

As the Nepali side does not have adequate technical manpower to

operate the railway, the local authority has been handling only

groundwork and staff management and relying on the Indian firm for the rest. In terms of connectivity, this is Nepal's first cross-border broad gauge railroad and the first rail link between the two countries to be operationalized since the rail services were halted in 2014 for infrastructure-upgrade.

As of now, the chances of Nepal bringing Indian railway technicians are slim for a variety of reasons. But if the train services were to be halted, people-to-people connectivity between India and Nepal would be severely affected.

In June 2022, India's "Bharat Gaurav Train" on the Ramayana circuit brought over 500 Indian tourists to the 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 feature prominently in future bilateral discussions.

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

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.

“I would like to reiterate that we are facing an acute shortage of funds as well as technical and trained manpower,” said Jha. “If we can arrange for those, we are sure to make a profit.”