The meeting will last for two days, during which officials from Nepal Oil Corporation (NOC) and Indian Oil Corporation (IOC) will finalize the capital, technical and institutional structure of a joint venture company that they will form to execute the project.
NOC chief Digambhar Jha told myrepublica.com that the IOC team is arriving here later Tuesday and the two sides will negotiate the structure and modus operandi of the JV company and also the technicalities of construction and operations of the pipeline.
Going by a three-month old cabinet decision, the NOC has already proposed IOC to join into the project with 30 percent share investment. It has also forwarded a draft of an agreement that will govern the JV and also the operations of the pipeline.
Government officials, however, expressed skepticism over the start of the negotiations on the project, which they considered ´politically sensitive´ and need government´s approval at every step, at a time of present political void.
Jha, however, said it was being initiated as per the decision of the cabinet. "Besides, the need of the pipeline has become so stark, I do not think any government will refute it in the present context," he said.
Amlekhgunj-Raxaul pipeline is a decade-old project that was first mooted by the IOC in 1995. Although the two governments have principally agreed on it and signed agreements to pursue it repeatedly, Nepal has lingered the project due to the lack of clear-cut vision from political leaders.
A technical study conducted by USAID in 2006, meanwhile, has tagged the project as financially viable. It has estimated that the cost of constructing the pipeline could stand at about Rs 1 billion. Given the land acquisition and other factors, NOC says the project cost could actually go as high as Rs 2 billion.
However, technical details and cost of the project would be known only when the JV develops a detailed project report.
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