Govt mulls pvt financing to build oil storage plants

- Post Report, Kathmandu

Feb 24, 2017-

The government is considering private finance initiatives to construct petroleum storage plants in all provinces. Under the initiative, a private sector company would finance and provide a public service, popularly known as the public-private partnership financing model. 

The government is also planning to involve the Chinese government in some of the infrastructure, said the Ministry of Supplies.  

The government has initiated a process to construct storage plants in all the seven provinces to stock petroleum products for at least 90 days. More than Rs117 billion has been estimated to build the plants each with a storage capacity of 530,000 tonnes of petroleum and 70,000 tonnes of cooking gas—eight times bigger than the current storage plant. 

Secretary at the Ministry of Supplies Prem Kumar Rai said the government was in the process of acquiring land for the purpose. According to him, the Nepal Oil Corporation (NOC) will also make an investment to build the storage plants in Chitwan and Rupandehi districts. 

“We will bring onboard the private sector. However, the modality is yet to be finalised,” he said, adding that the ministry would also request for the Chinese government funding. Beijing had agreed to help Nepal build oil storage plants during then prime minister KP Sharma Oli’s visit to China last year.

Rai said that the Indian Oil Corporation had also expressed its interest to build the storage plants. 

The NOC has also expedited the land procurement process for the construction of the infrastructure. The enterprise has invited bids to acquire land in Dhading and Jhapa districts. However, the NOC has been criticised for purchasing private land in haste rather than seeking the government-owned land.

During the meeting of the Parliamentary Industry, Commerce and Consumer Welfare Protection Committee last Wednesday, lawmakers also raised concerns over misappropriation of the state coffers in the name of acquiring the privately-owned land. 

Lawmaker Bhesh Kumari Raut blamed the concerned authorities for deliberately delaying the construction of the storage plants. “In the name of purchasing privately-owned land, a number of officials are setting their sights on exorbitant kickbacks,” Raut said.  

The NOC is acquiring 20 bighas of land in Jhapa and 300 ropanies of land in Dhading. 

“The land in Dhading has been overvalued at Rs2.7 million per ropani against the actual cost of Rs800,000. Similarly, the land in Jhapa has been priced at Rs1.4 million per kattha against the actual running price of Rs600,000.” 

Published: 24-02-2017 09:36

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