Economy

ECTS system marching forward effectively

 

nepal-india

Kathmandu, 10 January (2019) – In a bid to solve the problems of Nepal’s exporters and importers with cumbersome customs transit procedures, the Govt. of Nepal and the Govt. of India entered into a Memorandum of Intent on 6th June 2017 to pilot the use of an electronic cargo tracking system (ECTS) to facilitate traffic-in-transit between India & Nepal. The Asian Development Bank was entrusted with the responsibility of selecting a service provider through a global bidding system to execute the project. The Asian Development Bank selected Transecur Telematics (part of Bhimsaria Group) through the global tender.

On 18th April 2018, Kolkata Customs inaugurated the ECTS service for Nepal’s Cargo with a flagging off ceremony. This was followed by another flagging off ceremony in respect of a new route for transit of goods through a multi-modal system on 25th April 2018 enabling transit of containers on a train originating in Kolkata and terminating in Batnaha container terminal. The Kolkata project bombed due to resistance of Indian CHAs and transporters, who saw the electronic GPS system as a threat to their monopoly position. Joint Secretary of Dept. of Commerce & Supplies, Mr. Ravi Shanker Sainju, had been quoted saying, “However, traders have not cooperated with the government for effective implementation of ECTS”

In the meantime, the position in Vizag was no better with over 1500 containers continuing to languish since months, due to the cumbersome documentary requirements and absence of Consulate of Nepal in Vizag. Pushed to improve the ease of doing business, Nepal Government requested the ADB & Govt. of India to launch a modified transit procedure from Vizag. The ECTS project was reshaped to provide an automatic procedure for transit under ECTS. On 28th August 2018, the new transit procedure was ceremonially launched with the first train carrying transit containers to Nepal.

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After the first month of operation, the ADB has submitted its first Interim Report to the Govt. of Nepal and India. The new procedure for transit has had a miraculous impact on the “ease of doing business” for Nepal’s traders. In contrast to the earlier system which required 30 procedures and 22 signatures on a CTD for transit, now Nepal’s traders do not have to file any CTD nor require services of Nepal’s Consulate General. Even the Legal Undertaking and Insurance Policy has been dispensed. The traders are also freed from the need to engage any intermediaries (Indian CHA and Transporter) for undertaking transit of goods. The entire documentation for transit of container is provided by the shipping line and permission for transhipment is being obtained by them from Indian Customs at Vizag. The complexity of the procedure under the Treaty of Transit has completely disappeared. Import for Nepal’s traders has truly become a seamless process, which only begins by filing a declaration at the ICD at Birgunj. Containers are now transiting into Nepal in just over 10 days, cutting average transit time by 50%

 Performance Comparison

Average days for Kolkata Transit Average days for Vizag Transit
20 days

 

 

10 days 14 hours

In the meantime, it is learnt that deep vested interests are working hard to stall the program. The Indian Association of CHAs handling Nepal Cargo have appealed to the Indian Govt. to suspend the program as their livelihood is being affected! Clearly, there are many interest on both sides of the border at work.

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