IOC sends new proposal for pipeline

HIMALAYAN NEWS SERVICE

KATHMANDU: The Indian Oil Corporation (IOC) –– the sole supplier of petroleum products to Nepal –– has sent a new proposal for the construction of a pipeline from its Raxaul

depot to the Amlekhgunj depot of Nepal Oil Corporation (NOC).

NOC has forwarded the proposal to the Ministry of Commerce and Supplies for further decision, said acting managing director at NOC Suresh Kumar Agrawal.

Indian Oil Corporation has estimated a total cost of Rs 1.6 billion to construct the pipeline, he said, adding that IOC has sought 18 to 24 months to complete the construction of the pipeline.

The proposal sent by IOC has mentioned that it will be responsible for all the technical aspects of the construction, whereas Nepal Oil Corporation will have the responsibility of managerial tasks. Indian Oil Corporation has agreed to provide a loan to construct the pipeline, according to secretary at the Ministry of Commerce and Supplies Lal Mani Joshi. “IOC has made a proposal whereby NOC will have to clear the loan in seven years after the construction of the pipeline is completed.”

The Ministry of Commerce and Supplies will submit the proposal to prime minister Dr Baburam Bhattarai since he is undertaking the responsibilities of the ministry in the absence of a concerned departmental minister, said secretary Lal Mani Joshi.

Nepal had formally sought the southern neighbour’s help for the cross-border pipeline project at the Inter-Governmental Committee meeting in New Delhi that was held last December. However, no progress

has been made so far regarding the grant to construct

the pipeline between the

two countries, according

to Joshi.

Earlier, the project was planned to be constructed through a joint venture company with the participation of Nepal Oil Corporation and Indian Oil Corporation.

Nepal should initiate the process of acquiring land for the construction, said acting managing director Agrawal.

The proposed cross-border 41-km pipeline project will have 39-km stretch in Nepal and two-km stretch, with pumping and equipment installations, in the Indian territory, according to the feasibility study that was prepared by NOC.

The pipeline project has been in discussion since 1995. NOC had also carried out a pre-feasibility study in 2004 and a technical study in 2006 but the project could not materialise due to pressure from petroleum transporters and the unwillingness of the government, a NOC source claimed.