The devastating floods in Bhotekhosi River that swept through Rasuwa and downstream areas have left a trail of destruction across Nepal’s vital trade and energy infrastructures, with preliminary government estimates putting the economic damage at more than Rs 200bn.
Although the full scale of the destruction is yet to be assessed, as rescue and search operations are currently underway, initial reports indicate that private houses, roads, bridges, hydropower projects, large swathes of cultivable land, electricity infrastructure, commercial goods and other physical assets have been swept away or severely damaged.
With hundreds of lives lost, major trade infrastructure destroyed, hydropower capacity knocked offline, hundreds of vehicles and containers swept away, and roads, bridges, homes and land devastated, the Rasuwa floods have emerged as one of Nepal’s most economically consequential disasters in recent years.
The devastation comes around a year after the economic losses of around Rs 100bn during the GenZ protest on Sept 8 and 9 last year.
Minister for Infrastructure Development Sunil Lamsal has estimated preliminary losses of the Bhotekoshi flooding at more than Rs 200bn. Experts, however, say the figure could rise substantially once a detailed assessment is completed.
The destruction has been particularly severe along the trade corridor connecting Nepal with China through the Rasuwagadhi border point. The flood has washed away different sections of the Galchi-Rasuwagadhi road. The Department of Roads (DoR) has estimated that around 40 kilometers of the road have been completely destroyed. At least 22 concrete bridges and five Bailey bridges in Rasuwa, Nuwakot and Dhading have also been swept away by the floods, according to preliminary details from the department.
Officials and traders fear one of the country’s vital overland trade routes with China could be affected for an extended period. China is Nepal’s second-largest trading partner with bilateral trade worth more than Rs 400bn annually. Nepal imported goods worth Rs 425.24bn from China in the last fiscal year, while its exports during the year stood at Rs 1.89bn. The Rasuwagadhi-Kerung, which was also affected by last year’s floods, had emerged as the most dependable trade routes with China in recent years.
The flood has also struck at a particularly damaging time for traders. More than half of the goods imported from China for the upcoming Teej, Dashain and Tihar festivals are estimated to have been stored at the Rasuwa customs area when the flood struck. More than 200 containers were reportedly swept away, including 60 containers that had already cleared customs and were awaiting transport to Kathmandu. Traders had diverted a larger share of imports through Rasuwagadhi after the Tatopani border route was closed because of road damage.
The automobile sector has also suffered major losses. Industry people say More than 700 vehicles imported for the Dashain and Tihar shopping season are estimated to have been swept away. More than 200 BYD cars, 180 MG cars, 60 Foton and 81 imported by MAW Vriddhi from China are believed to have been washed away by floods.
The flood has dealt another major blow to the power sector. According to the Ministry of Energy, Water Resources and Irrigation, 12 hydropower projects have been damaged, forcing around 431.1 megawatts of generation capacity offline. This is roughly 10 percent of the country’s total electricity generation capacity. The damage extends beyond generating plants. Six transmission lines have been disrupted and the Trishuli 220 kV substation has been completely damaged. Electricity supply has been fully disrupted in Rasuwa and partially disrupted in Nuwakot, Dhading and Gorkha, with poles, transformers and other distribution infrastructure damaged in several locations.
The economic impact is already spilling into financial markets. Shares of hydropower companies affected by the disaster came under heavy selling pressure on Wednesday, while the Hydropower sub-index fell 2.83 percent. Shares of Rasuwagadhi Hydropower were down by 14.66 percent, while Chilime Hydropower declined 9.28 percent. The damage has also affected non-life insurers because insurers are expected to bear part of the losses from insured hydropower projects, vehicles and other assets.
Meanwhile, major political parties have appealed to the international community for assistance.
An all-party meeting held Thursday morning issued a 10-point joint resolution and made an appeal for international assistance.
“We appeal to the United Nations, development partners, international non-governmental organizations, friendly nations and the Nepali diaspora, among others, to provide the necessary humanitarian, technical and financial assistance for rescue, relief, rehabilitation and reconstruction following the unimaginable destruction,”
Minister for Finance Swarnim Wagle said the ministry has initiated high-level consultations with international development partners to outline funding strategies for recovery and reconstruction. “The World Bank has already pledged Rs 25bn, while neighboring India and China, and the Asian Development Bank (ADB) has also proposed assistance,” Wagle said after the all-party meeting on Thursday.
