India expected to announce major aid package for Nepal

June 6, 2006
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During the four-day visit of Prime Minister Girija Prasad Koirala to India beginning Tuesday, New Delhi is expected to announce a major aid package amounting Rs 75 billion, according to reports.

Upon receiving information about “Himalayan Marshall Plan” being mulled by India through diplomatic channels, Nepali officials worked overtime to channel the assistance in priority areas.

Kantipur daily reported that apart from budgetary support in the next fiscal year, Nepal would seek Indian assistance in hydropower, roads and aviation sector. During the bilateral negotiations, the government will be seeking Indian assistance for the development of at least one big hydropower project to tackle the worsening power crisis in the country.

Nepal is planning to propose three mega projects, 600 MW Budhi Gandaki, 400 MW Arun III and 300 MW Upper Karnali for Indian investment. Out of them, Indian said is said to be interested to invest in Upper Karnali project, which will cost around USD 500 million, the daily reported, quoting sources.

According to reports, Nepal will also be proposing financial support worth four billion rupees for construction and maintenance of 600 km roads in the hilly region and construction of 23 bridges along the East-West highway. India has already agreed to provide support in the construction of additional 1,500 km of road in the terai region.

Similarly, the government is likely to request the government of India to defer the payment of huge outstanding dues by the state-owned Nepal Oil Corporation to the Indian Oil Corporation. Nepal wants the dues worth Rs five billion to be converted into a long-term loan, reports said.

Other items in Nepal’s “wish list” include waiver of outstanding military hardware dues, scrapping of the 4 percent additional duty imposed on imports from Nepal, detailed survey of East-West railway and establishment of a poly-technic institute in the far-western region, among others.

Meanwhile, reports say premier Koirala will meet and hold discussions with Indian Presidetn A P J Abdul Kalam, his Indian counterpart Dr. Manmohan Singh and other senior Indian officials on Wednesday. He is also scheduled to meet with senior Indian political leaders during his four-day Delhi sojourn, according to reports.