Nepal has sought India's financial and technical assistance to determine the viability of the proposed 141-kilometer Raxaul-Kathmandu railway, which would create the first direct rail connection between India's border and Nepal's capital. The completion of a final location survey by India's Konkan Railway Corporation last year have raised concerns about the project's 4.81% financial rate of return, which is significantly lower than local banking rates, that suggests a 25-year payback period for the estimated Rs400 billion ($3 billion) investment. 

During recent bilateral meetings in New Delhi, India, for the 9th Project Steering Committee (PSC) and 7th Joint Working Group (JWG), Nepali officials requested Indian perspectives on making the project more financially viable while acknowledging its broader economic benefits and geopolitical significance. 

The ambitious railway project will require 42 kilometers of tunnels and 124 major bridges. Konkan Railway Corporation has proposed using a broad-gauge system with a maximum designed speed of 120 km/h The proposed route will start from Raxaul and pass through Jitpur, Nijgadh, Sikharpur, Sisneri, and Sathikhel before reaching Chobhar in southern Kathmandu.  

Authorities are considering whether the railroad's length and construction costs can be reduced. The railway will also focus on cargo services while offering passenger transport to improve the project's economic feasibility. Former Promoting cargo services via railway would also enable Nepal to get cheaper products from India and third-country imports via Indian ports, said Mr. Rohit Bisural, former director general of the Department of Railway of Nepal.  

The final funding model and India's specific role in construction remain undetermined as both countries continue discussions on this landmark cross-border initiative. 

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Nepal weighs costs of Raxaul-Kathmandu rail, seeks Delhi’s help

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