EXCLUSIVE: Preparation going on to sign BRI implementation agreement, Foreign Minister Shrestha going to China

Kathmandu: Prime Minister Pushpa Kamal Dahal ‘Prachanda’ -led government has prepared to sign the Belt and Road Initiative (BRI) implementation agreement with the Chinese government as per a high-level source.

Though PM Dahal had done his homework to implement the agreement with China, it has been kept a secret even from the member parties of the coalition and high administrators.

According to a source, the draft for the agreement has been almost ready. PM Dahal, Minister of Foreign Affairs Narayan Kaji Shrestha, and Finance Minister Barshaman Pun are only aware of the draft.

Minister Shrestha has prepared to sign the agreement for implementing the BRI in the upcoming week during his visit to China. Minister Shrestha is going for his first foreign visit after taking responsibility for the Foreign Ministry. He is going on a 5-day visit to China on coming Sunday.

The source claimed that Finance Minister Barshaman Pun and Chinese Ambassador for Nepal Chen Song had long discussions two times to finalize the investment modality.

The Nepali side demanded the investment of China, under BRI, to be a grant. But, after the disagreement with China, Nepal requested China to keep the interest rate in the periphery of 1%.

The primitive draft was made during the previous visit of Minister Shrestha to China, as the Home Minister and Deputy Prime Minister during the previous coalition government. Despite the agreement on the fundamental agreements, Nepal and China disagreed on a few points.

Nepal made a BRI agreement with China in 2017 A.D. 9 plans were submitted to China for this project. But, none of the plans have begun even after the agreement reached its 7 years.

The investment modality seems to be the barrier to not implementing the BRI. Although the preparations are going on for the implementation, the modality seems to be creating a barrier.

PM Dahal-led government has requested to implement the BRI as a grant. The government even requested to convert the loan, sanctioned for the construction of the Pokhara International Airport, into a grant.

But, the Chinese side is not agreeing to this request. China wants to fix the interest rate of the loan for the BRI projects in between 2-3 percent. This interest rate, for the International credit and Long-term infrastructure development, is too expensive.

In the same context, this week, the Spokesperson of the Chinese Embassy requested not to use words like debt trap for Chinese support.

The source said that Finance Minister Pun requested the Chinese Ambassador to set the interest rate to less than 1 percent if it was obligatory to take the loan and could not be converted into a grant.

The preparations are going to reach a point of agreement and complete the signing procedure before the China visit of the Foreign Minister. But, no information has been provided to coalition parties, CPN (UML), Rastriya Swatantra Nepal (RSP), Janata Samajbadi Party (JSP), CPN (Unified Socialist), and high-level administrator.

The source said, ‘Both the parties have understood the implementation of the BRI agreement to become easier due to the breaking of coalition with the Nepali Congress and formation of new coalition, including the RSP.’

China appears to be uninterested in providing grants for the BRI project. Nepali Congress has been taking a stand about not being able to implement the BRI with the high interest rates of China and China needs to provide grants to move forward with the project. CPN (UML) has not clarified its stand regarding the agreement.

There is no option other than waiting to know the decision of the PM Dahal-led government agreeing or disagreeing with the high-interest loan of the Chinese side.