In a significant move just before facing a vote of confidence in Parliament, Nepal's outgoing Prime Minister, Pushpa Kamal Dahal 'Prachanda', granted approval for an agreement to establish rail connectivity between Nepal and China. This decision, made under China's ambitious Belt and Road Initiative (BRI), is seen as having more operational significance than political implications, aligning with Nepal's participation in the multi-billion-dollar infrastructure project led by Chinese President Xi Jinping.

According to government sources quoted by the MyRepublica news portal, the Cabinet meeting held on Thursday gave the green light for the "Strengthening the Development Cooperation in Building the Trans-Himalayan Multidimensional Connectivity Network" agreement between Nepal and China. Rekha Sharma, the government's spokesperson and Communication Minister, confirmed the approval.

However, the immediate impact of this decision is downplayed by a minister, who emphasized that the project's implementation details and BRI modalities are yet to be finalized. Nonetheless, the move is considered crucial for initiatives like the Kerung-Kathmandu railway and broader infrastructure development along the Nepal-China border.

Unfortunately for 'Prachanda', his loss of the vote of confidence in Parliament on Friday came after the Communist Party of Nepal-Unified Marxist Leninist (CPN-UML) withdrew its support. As a result, a new government, led by former Prime Minister K P Sharma Oli, will now be formed.

The approval of the China rail deal by 'Prachanda' just before leaving office is seen as progress towards implementing BRI projects in Nepal. It is also deemed essential for initiatives such as the Kerung-Kathmandu railway and broader infrastructure development along the Nepal-China border.

Prior to signing a power-sharing agreement with the CPN-UML, the Nepali Congress had resolved to accept only grants, not loans, under the BRI project. The pending 2017 BRI agreement with China was also on the government's agenda for implementation. It is worth noting that the BRI has raised concerns globally regarding China's debt diplomacy, through which huge loans are provided to smaller countries for potentially unsustainable infrastructure projects. An example of this is Sri Lanka's Hambantota port, which was leased to China for 99 years in a debt-for-equity swap after Sri Lanka failed to repay the Chinese loan.

India has expressed its objections to the BRI's flagship project, the $60-billion China-Pakistan Economic Corridor, as it passes through Pakistan-occupied Kashmir. The project remains a point of contention between India and China.

As Nepal undergoes a political transition, the approval of the China rail deal raises both hope for infrastructural development and concerns over the financial implications. The details of project implementation and the modalities of the BRI remain to be finalized by the new government under K P Sharma Oli's leadership.