NOC team to visit Mumbai for talks

KATHMANDU, AUG 26 -

A six-member team of Nepal Oil Corporation (NOC) is departing to Mumbai on Tuesday to hold second-round meeting with the Indian government for the development of Amlekhgunj-Raxaul petroleum pipeline. The delegation is led by NOC Managing Director Chandika Prasad Bhatta.

The two-day meeting, beginning August 27, will discuss financial, commercial and technical parts of the proposed 43-km cross-border pipeline, said Bhanu Khanal, chief of NOC’s Amlekhgunj depot, who is also a member of the delegation.

The first-round meeting between NOC and Indian Oil Corporation (IOC) ended last Thursday agreeing to acquire land and pay compensation.

As there is no clear decision whether the project may be developed under a grant or the $1 billion credit which India has announced it will give Nepal, the meeting will finalise the financial modality also, said NOC sources. So far, NOC officials are optimistic the Indian government would build the project as a gift to Nepal.

Detailed engineering and surveys are expected to begin after funding matters are finalised. Indian Prime Minister Narendra Modi had pledged to expedite the project during his visit to Nepal in early August.

A field survey conducted by the two sides has shown that the pipeline will pass through 25km of farmland and 16km of jungle.

Nepal has to acquire a 1.8km long patch in the Indian territory of which 1km lies along a railway track and the rest consists of agricultural fields.

Both NOC and IOC have decided to lay the pipeline far from human settlements fearing a political backlash. The pipeline laying work is

projected to be completed in six months and cost around Rs 2 billion.

IOC had proposed building a cross-border pipeline in 1995. Subsequently, a memorandum of understanding was signed between NOC and IOC in September 1996 at the junior executive level. In 2004, another agreement was reached at the chief executive level.

The pipeline is expected to reduce transportation costs by 40-50 percent, control leakage and ensure hassle-free transfer and quality of petroleum products.

Nepal imported petroleum products worth Rs 131 billion last fiscal year, up 22.6 percent year on year.

Source: The Kathmandu Post