Nepal, India agree to speed up petro pipeline project

Talks in Delhi end with an agreement to start a detailed technical survey, land acquisition and tender process as soon as possible

Jun 8, 2016-Nepal and India have agreed to speed up the construction of a long-planned cross-border oil pipeline. The 41-km pipeline linking Raxaul and Amlekhgunj is expected to ensure regular fuel supplies as it will eliminate the vagaries of transportation by tanker. The pipeline project was first proposed in 1995.

High-level talks held in the Indian capital Delhi on Monday and Tuesday concluded with an agreement to start a detailed technical survey, land acquisition and tender process as soon as possible. 

Nepal has also agreed to appoint a focal person to coordinate with India during the construction of the pipeline and a field officer to facilitate the tasks on the ground. 

India had asked Nepal to name a focal person saying that it could not deal will the myriad government agencies that would be involved in the construction project.

Shreedhar Sapkota, secretary of the Supply Ministry and leader of the Nepali delegation, said that the construction of the pipeline would proceed without hindrances. “The two sides have agreed to speed up the project, and it will move ahead without any obstruction,” said Sapkota.

Nepal had requested India to construct the pipeline during Indian Prime Minister Narendra Modi’s visit to Kathmandu in 2014, and the southern neighbour agreed to build it. Subsequently, in August 2015, Nepal and India signed a memorandum of understanding to launch the project. Out of the pipeline’s total length of 41 km, about 39 km will lie within Nepali territory.  

As a large part of the pipeline will be built on the Nepal side, how fast the project will be completed depends on how efficiently work is conducted here, officials said. 

“There has been no progress in land acquisition on the Nepali side which will delay the project,” a Nepali official quoted an Indian official as saying at the meeting. 

Nepal was totally crippled by the blockade which caused a fuel crisis, and a pipeline is urgently required to avoid a repeat of such a devastating event, Nepali officials said. If the pipeline is constructed, protests and such other obstructions will not affect fuel supplies.

The Rs4.4-billion project is expected to be completed within 30 months after work begins. Indian Oil Corporation (IOC) will be injecting Rs3.2 billion into the project as a grant while Nepal Oil Corporation (NOC) will invest the rest of the amount for the upgradation of its Amlekhgunj depot.

The pipeline will transport petrol, diesel and kerosene. Under the first phase of the project, a pipeline will be laid from Raxaul to Amlekhgunj. In the second phase, it will be extended to Kathmandu.

IOC had proposed constructing a cross-border pipeline in 1995 and signed a memorandum of understanding with NOC at the junior executive level a year later. In 2004, the two sides upgraded the agreement to the chief executive level. However, due to a number of legal hurdles, the project failed to take off.

Published: 08-06-2016 08:30

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