December 28: Private railway companies have not been able to provide services for transporting goods to Nepal due to the delay in amending the Nepal-India Rail Service Agreement.

The Container Corporation of India Limited (CONCOR), a sister concern of the Indian Railways, enjoys monopoly in transporting Nepal-bound goods from India and third countries. As it faces no competition from the private sector, the company has been charging transportation fare arbitrarily.

The railway service agreement gives CONCOR the sole right to transport goods to Nepal and therefore the company maintains its monopoly. Besides CONCOR, no other company can transport goods to Nepal via railway. Eight private railway companies of India are willing to provide their services but they are not allowed to do so until the agreement is amended.

In the rail service pact signed between the two countries in  2004, the Indian side had put a precondition that CONCOR would provide transportation service through railway.

The lack of Nepal’s attention to minute details while signing the agreement has given special advantage to CONCOR, says Ashok Kumar Temani, former chairman of the Transport and Cargo Committee of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI).

Although Nepal is making attempts to include other railway service providers for transporting goods to Nepal via India, it has not been able to do so. The Indian side has reportedly not shown any interest to allow the private sector to enter the competitive market.

A senior official at the Ministry of Industry, Commerce and Supplies told New Business Age on condition of anonymity that the India side has been avoiding the issue with various excuses.

“The Indian side has been delaying the amendment saying it requires homework,” said the official.

Nepali importer Pradeep Kedia says that CONCOR has been over-charging transportation fare for Nepal-bound goods.

“CONCOR has been charging exorbitant fare because it enjoys monopoly. There is an immediate need to include other companies in the competitive market to end the hegemony of CONCOR,” says Kedia.

Vice Chair of Province 2 Chapter of FNCCI Ashok Kumar Baidhya also believes that the entry of other service providers for transporting goods to Nepal would increase competition among them and reduce the transportation cost.

An official of Nepal Intermodal Transport Development Committee said that CONCOR has been charging up to 40 percent more than the normal fare for transporting goods to Nepal.

“The fare charged by CONCOR is exorbitant considering the distance it has to cover to deliver the goods to Nepal,” said the official who did not wanted to be named.

CONCOR has transported 32,258 containers from Kolkata and Visakhapatnam to Nepal border between  April to November this year. During the last fiscal year, the company transported a total of 59,214 containers to Nepal.

The two countries had discussed about amending the agreement during the recent meetings of officials India and Nepal. However, deputy spokesperson of the commerce ministry Urmila KC informed that they could not reach a conclusion on the topic.

“The meeting was held virtually due to coronavirus. The two sides have agreed to amend the pact after necessary homework,” she said.