Envisioned as a vital, shortened trade corridor connecting Nepal to its northern neighbor, China, the project has spent nearly half a decade stuck in budgetary limbo.
While the tunnel has been featured in national budgets for the past four to five years, a comprehensive study has yet to be finalized. Presenting the budget for the upcoming fiscal year 2083/084, Finance Minister Dr. Swarnim Wagle announced that the government will complete the Detailed Project Report (DPR) and officially initiate the construction process within the year. However, significant procedural delays, incomplete detailed studies, and a lack of secured financial management continue to overshadow the ambitious timeline.
A project of this scale demands massive capital, which experts note is well beyond the capacity of the Nepali government to fund solo. Consequently, Nepal has long been lobbying Beijing for financial backing.
During a previous state visit to China by then-Prime Minister KP Sharma Oli, the two nations signed a Memorandum of Understanding (MoU) to construct the tunnel way via Chinese grant assistance.
Currently, Chinese technicians are reportedly in the final stages of the tunnel's preliminary survey and design. Nepal is actively pushing the Chinese side to transition this data into a formalized DPR so construction can begin. However, Beijing has historically shown reluctance to fully commit to the detailed study and construction phases, largely due to the massive financial undertaking required.
Preliminary assessments peg the total cost of the project at Rs 30 billion. China’s hesitation is primarily attributed to the sheer volume of investment required for a pure grant-funded project, though Nepali officials remain optimistic about a breakthrough. In the fiscal year 2080/081, the government allocated Rs 1.25 billion for survey, design, and initial works. Due to zero progress, those funds were ultimately frozen and diverted to other projects.
Despite the slow start, the geopolitical and economic rewards of the project remain monumental. Currently, the Tokha-Chhahare route is 34 kilometers long which will come down to 4 kilometer if tunnel is made.
By shaving 30 kilometers off the treacherous mountain journey from Tokha to Chhahare, the tunnel is expected to drastically slash transit times and transport costs, proving to be a major milestone for bilateral trade and imports between Nepal and China.
