Prime Minister Pushpa Kamal Dahal, facing a crucial vote of confidence in Parliament on Friday amidst withdrawal of support from parties including the CPN-UML, has approved an agreement to connect Nepal with China by rail before leaving office.

At cabinet meeting held on Thursday, PM Dahal decided to endorse an agreement with China under the Belt and Road Initiative (BRI), aimed at enhancing connectivity between Nepal and China through rail.

“The Cabinet meeting held on Thursday decided to approve the ‘Strengthening the Development Cooperation in Building the Trans-Himalayan Multidimensional Connectivity Network’ agreement between Nepal and China,” said Communication Minister Rekha Sharma, who is also the government’s spokesperson.

Government sources said that this decision, particularly regarding railway connectivity and road expansion towards China, carries more operational than political significance.

According to a government official, “This decision aligns with Nepal’s participation in the BRI.”

However, a minister downplayed its immediate impact, stating, “This is an initial decision; details of project implementation and BRI modalities are yet to be finalized.”

Prime Minister Dahal’s move, made just before his departure from office, is viewed not only as progress towards implementing BRI projects but also crucial for initiatives like the Kerung-Kathmandu railway and broader infrastructure development along the Nepal-China border.

Earlier, ahead of signing a power-sharing agreement with UML, the Nepali Congress had resolved to “only accept grants and not loans under the BRI project.”

The government was also set to decide on implementing the 2017 BRI agreement with China, which has been pending at the cabinet.