Visakhapatnam Port‚ petroleum pipeline agreements likely
KATHMANDU:
Nepal and India are most likely to sign agreements on facilitating movement of cargoes from Visakhapatnam Port and construction of cross-border petroleum pipeline during Indian Prime Minister Narendra Modi’s visit to the country during SAARC Summit from November 26 to 27.
“Officials of the both countries are laying the groundwork to finalise the letter of exchange (LoE) that would allow Nepal to transport goods from Visakhapatnam Port using road and rail services. We are also preparing to sign the agreement on construction of Amlekhgunj-Raxaul petroleum pipeline,” Minister for Commerce and Supplies Sunil Bahadur Thapa told The Himalayan Times.
According to Minister Thapa, the Indian government has recently sent its comments on the LoE that paves the way for the country to ferry goods from Visakhapatnam Port. Nepal and India are expected to sign the LoE on transit for movement of traffic to/from Visakhapatnam Port during Indian PM Modi’s visit to Nepal, he said.
MoCS officials are all set to forward the LoE to India after incorporating the latter’s comments.
“Once the LoE is approved, the MoCS and its Indian counterpart will prepare the operation modality so that Nepalis can formally start using the port to bring in goods from third countries,” said Jib Raj Koirala, joint secretary of the MoCS, adding, “We can replicate the modality of Kolkata Port.”
Once this is done, Nepal will gain access to another seaport to import third-country goods. Currently, the southern neighbour has been allowing use of Kolkata Port to import goods from third-countries.
The government of India had principally agreed to allow Nepal-bound cargos to use Visakhapatnam Port in 2009 during then prime minister Madhav Kumar Nepal’s visit to India but the procedural works to bring that agreement into effect is yet to be finalised.
In fact, Nepal had sent altogether five LoEs related to trade and transit, but only the LoE on movement of traffic to/from Visakhapatnam Port to Nepal by road and by rail is in the final stage of implementation.
Similarly, the technical team of IOC that is in Nepal for the bi-lateral talks on construction of 41-km cross border petroleum pipeline from Amlekhgunj of Nepal to Raxaul of India has been working with Nepali counterpart to finalise the financial modality and modus operandi (operation modality). IOC Executive Director of Pipeline Division VS Ganguli and Executive Director of Supplies and Distribution SS Bose are in Nepal to finalise the financial modality of the project.
India had originally proposed to build the pipeline under the B2B model during the bi-lateral talks held last Saturday, which means Indian Oil Corporation (IOC) will extend a grant of IRs 1.5 billion to build the pipeline for Nepal Oil Corporation (NOC).
Another financial modality is ‘turnkey’. Under this modality, IOC would use the grant extended by Indian government to build the pipeline for NOC and the final option is for Nepal to use the line of credit facility from Exim Bank of India to construct the pipeline and expand the depot at Amlekhgunj.
It is reported that joint panel of NOC and IOC plan on recommending the financial modality to their respective governments by Friday and the agreement will be signed by preparing operation modality of the project.
Source: THT
