NEPAL DELEGATION TO USTDA TRANSPORTATION

UNCLAS SECTION 01 OF 02 KATHMANDU 000743

SIPDIS

SIPDIS

DEPT FOR SCA/INS,
DEPT PASS TO USTDA (MBASSETT)

E.O. 12958: N/A
TAGS: ECON EAIR EINV ELTN NP
SUBJECT: NEPAL DELEGATION TO USTDA TRANSPORTATION
CONFERENCE IN MUMBAI SEEKS FOREIGN INVESTMENT


BACKGROUND
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1. (U) Embassy Kathmandu was pleased to have one of its
Emboffs accompany a two-member government delegation from
Nepal to the United States Trade and Development Agencies'
(USTDA) "Transportation Solutions for South Asia Trade"
conference held in Mumbai, India, March 7-9, which
highlighted transportation infrastructure development needs
in South Asia. The conference brought together government
delegates from Afghanistan, Bangladesh, Bhutan, India,
Maldives, Nepal, Pakistan and Sri Lanka, as well as
representatives from 18 U.S. companies and the Asian
Development Bank and World Bank. Government delegates
presented transportation infrastructure projects for their
respective countries in group sessions and U.S. companies had
the opportunity to schedule one-on-one appointments with the
delegations of their choosing. (Delegates from Kazakhstan,
Kyrgyzstan, and Tajikistan attended the conference as
observers.)

NEPAL DELEGATION OUTLINES AIRPORT UPGRADE PROJECTS AND
CHINA-INDIA LINKS
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2. (U) Mr. Kamal Kumar K.C., Officiating Director General of
the Civil Aviation Authority of Nepal (CAAN),and Mr.
Radakrishna Pradhan, Under Secretary, National Planning
Commission, outlined a number of possible projects in Nepal
open to foreign direct investment. Mr. K.C. explained
Nepal's major airport improvement projects, which included:
upgrading Pokhara (central Nepal) airport from a domestic to
international airport with a longer runway; extending the
runway at Bhairawaha (southwest Nepal) airport; and upgrading
to Nepal's only international airport, Tribhuvan
International Airport (TIA),located in Kathmandu. Mr.
Pradhan explained His Majesty's Government of Nepal's (HMGN)
plan to become a trade and transit link between India and
China by building eight north-south roads through Nepal to
link the two major economic powerhouses. He also noted plans
for direct road and rail links between the major Indo-Nepal
trade border town of Birgunj and Kathmandu. Building an
approximately 12 kilometer tunnel would reduce to around
three hours the current eight-to-ten hour trip over
mountainous roads between Birgunj and the capital. The
airport and road/rail projects all require significant
funding to be implemented and Nepal is seeking foreign direct
investment for them.

U.S. COMPANIES INTERESTED IN SELLING TECHNOLOGY AND EQUIPMENT
FOR NEPAL'S AIRPORTS
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3. (U) Four U.S. companies, which requested meetings with
the Nepal delegation during the scheduled one-on-one
sessions, were primarily interested in selling information
management technologies and security equipment for use in
Nepal's airports. While the technology and equipment offered
by the U.S. companies would be beneficial to Nepal, the lack
of HMGN funds would likely prevent any significant purchases.
A representative from Lockheed Martin was marketing
Lockheed's air traffic management technology. Mr. K.C.
lamented the decaying state of TIA's Japanese radar system
and explained that CAAN would like to be in a position to buy
a new radar system along with air traffic management
technology. Oracle offered an information management
software solutions package for airports, which Mr. K.C. said
would be beneficial for TIA's billing systems as all bills
for landing rights were currently done manually. A
representative from the security company Ingersoll Rand
inquired whether CAAN was interested in purchasing electronic
access equipment to complement the wiring Ingersoll installed
at TIA in 2000. The actual electronic access equipment was
never purchased due to lack of government funding. Mr. K.C.
explained that electronic access equipment had yet to be
acquired and remained an item on CAAN's wish list. The
railcar brake manufacturer Ellcon-National was curious if
Nepal had any plans to develop freight rail beyond the border

KATHMANDU 00000743 002 OF 002


towns of Nepal. Mr. Pradhan explained there were no such
immediate plans.

COMMENT
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4. (SBU) The two delegates from Nepal actively participated
in the conference and networked with U.S. company
representatives and government officials from the other
countries. Mr. K.C. was planning to follow up with
representatives from Oracle and Ingersoll Rand on cost
proposals. Nepal's lack of national funds and currently
unfavorable investment climate however, will continue to
dampen HMGN plans for its aviation, road and rail
infrastructure projects.
SCHLOSSER