India and Nepal on Tuesday decided to take forward the proposal to build a 41-km petroleum pipeline between the two countries at a cost of around Rs 100 crore. The pipeline is to be laid between Raxaul in Bihar to Amlekhgunj in Nepal.
After a meeting with his Nepalese counterpart Mr Purushottam Ojha, the Commerce Secretary Dr Rahul Khullar, said, “It is a project we have to look at and find money for.”
However, he added, “It will take time. These things don't get sorted out in a day. We have identified the project and moved on to the next stage. So give it some time.”
The pipeline will save transportation costs and has many advantages, Mr Ojha said, adding, “Currently petroleum products are transported to Nepal through tanker trucks from the Raxaul depot of Indian Oil Corporation. The pipeline will also save us from delays due to traffic jams on the way. The talks (on the pipeline) are going on the positive track.”
The project was initially proposed by IOC in 1995 and was aimed at cutting the transportation costs by half. It was also meant to help the land-locked Nepal in solving its fuel-shortage problem. India is to give financial and technical knowhow assistance for the project.
Study & indecision
Though a pre-feasibility study and technical study was carried out in 2004 and 2006 respectively, there has been hardly any progress in the project so far. One of the factors for the delay was the reported indecision of the Nepal Oil Corporation regarding building the pipeline all by itself or in partnership with IOC.
Both countries also discussed ways to increase trade and investment as well as the security concerns expressed by Indian investors regarding investing in Nepal. Mr Ojha said, “Due to supply side constraints in trade we aspire for more investments from India.”
Issues relating to transit trade including procedural simplification of transit clearance as well as ways to increase trading and investing directly, rather than through third countries, were also taken up.
Both sides will meet in January to discuss matters including Nepal's proposal for trade assistance projects such as building infrastructure (including bridges and hydel power projects) and laboratory facilities in Nepal, Dr Khular said.
The other issues discussed included India's demand that Nepal increase the margin of preference granted to Indian goods vis-à-vis imports from other countries; and phasing out of Nepal's Agricultural Reform Tax on the farm products from India; as well as Nepal's demand that India eliminate additional duty on 162 of its agro products exports to India.
Sources said New Delhi has agreed to do away with the Duty Refund Procedure for the benefit of traders from Nepal.