Speed up pipeline project, PAC tells govt

KATHMANDU, Aug 30: Public Accounts Committee (PAC) of the parliament has instructed the government to move ahead seriously on the construction of cross-border oil pipeline. In order to cut the cost of fuel transportation and check pilferage, the construction of an oil pipeline is considered necessary.



The instruction from PAC, which has lawmakers from almost all political parties, has come at a time when the government has been avoiding a decision on the oil pipeline project, which has been envisaged to run between Amlekhgunj and Raxaul depots.[break]



“Transportation of fuel through tankers has proven to be costly and has not been able to assure fuel security,” PAC said in its instruction issued to the government. Construction of an oil pipeline can help the country avoid fuel scarcity, leakages and high transportation cost, it said, urging the government to gear up and construct oil pipeline with high priority.



Referring to various studies, PAC said the pipeline would help Nepal reduce its fuel transportation cost by 40 percent, which in turn will relieve consumers a great deal. It will also generate additional revenue for the government, reduce technical loss, theft and pilferage and damage to road besides making supplies cleaner and cheaper.



Most importantly, it is expected to end fuel shortages that hit the country every now and then.



Both Nepal and India have agreed in principle to lay a 41-kilometer cross-border oil pipeline, originally proposed by Indian Oil Corporation (IOC) over a decade ago. However, the two sides have not inked any deal to kick start the project.



As per the understanding reached so far, Nepal and India have agreed to develop the project under a ´separate ownership, joint operation´ model.



Initially, the two governments had agreed to develop it as a joint-venture project between Nepal Oil Corporation (NOC) and IOC.



At present, NOC says it will construct 39 kilometer of the pipeline on the Nepali side of the border with IOC´s technical inputs. IOC, for its part, will construct a two-kilometer pipeline system on the Indian side and install pumping stations in Raxaul.



As the pipeline on both sides of the border will function as a single system, the two corporations have agreed to operate it jointly under a bilateral Pipeline Treaty.



However, both sides have acted slow avoiding to sign the deal and implement the project so far.

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