KATHMANDU, Nov 21: The government is planning to start negotiations with India soon to formalize the modality for starting third country trade via the Visakhapatnam port -- the newly acquired transit port which is believed to cut the costs of Nepal´s third country trade.
A highly placed Commerce Ministry source said Nepal will write to India soon, expressing its willingness to utilize the port, and request India for bilateral talks to finalize the modality for accessing the port and doing trade through it.
"We were planning to discuss the matters related to it first at the Secretary-level Intergovernmental Committee meeting scheduled for this month. However, since the meeting has been canceled because of health problems of Indian Commerce Secretary, we are exchanging letters for picking up the issue," the source told myrepublica.com.
Nepal had secured transit rights at Visakhapatnam port a couple of months ago. An understanding to this effect was signed during the visit of Prime Minister Madhav Kumar Nepal to New Delhi in August, while a formal agreement was sealed during the visit of Indian Commerce Minister in Kathmandu in October.
"A committee will soon be formed to negotiate out the modality of its operation," said the source. He elaborated that the two countries would have no problems in finalizing this arrangement, especially as they already have a modality of operating a port transit in Kolkata.
Nonetheless, Nepali side will focus on doing away with complications that exist in Kolkata port and further simplify the transit operations.
Also, Nepal will be requesting India to provide it a permanent space at the port for supporting the storage and movement of containers. It will also seek a separate dock to receive and park vessels ferrying Nepali consignments. "This is very necessary to do away with demurrage cost," said the source.
India has pledged docking space number 13 in Kolkata port to Nepal, allowing it to develop the dock and use it for receiving ships ferrying only Nepali consignments. It has also been allowed to rent out the dock, whenever it is free, for other Indian parties. But, Nepal never developed the dock and the space has been left unutilized.
"However, we plan to develop a dock in Visakhapatnam. As it supports direct operation of larger vessels and the trade via this port is also growing fast, we believe Nepal can reap multiple business benefits from it," said the source.
Visakhapatnam is one of the fastest growing ports in India and is located at a distance of some 1,300 km from Birgunj dry port. Although it is farther than the Kolkata port, officials believe its better, capacity to support entry and exit of larger vessels and proximity to major ports in western countries will cut delivery duration and costs of third country trade.
It will free traders from the constraints they have been facing at present at Kolkata port due to its capacity to support movement of only smaller vessels. Because of this constraint, Nepali traders were required to re-ship their export consignments in larger vessels in Singapore. This prolongs shipment duration and adds costs.
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