In a move to deepen economic ties with Nepal, India today agreed to build a pipeline from Bihar to Kathmandu for supply of petrol, diesel and ATF.
Prime Minister Narendra Modi yesterday signalled India's willingness to build the Rs 200-crore pipeline to supply fuel during his visit to Himalayan nation, the first by an Indian Prime Minister in 17 years.
"The Nepalese side requested and the Indian side agreed to take up the project for the construction of Raxaul (in Bihar) to Amlekhgunj (in Nepal) petroleum pipeline in the first phase and extend it to Kathmandu in the next phase to facilitate the transport of petroleum products," a joint press statement issued after the two-day visit said.
Nepal is dependent on India for meeting all of its fuel requirement. Petrol, diesel, domestic LPG and jet fuel (ATF) are currently trucked from Indian Oil Corp's (IOC) depot at Raxaul in Bihar to Nepal.
In 2006, a 41-km pipeline from Raxaul to Amlekhgunj in Nepal was proposed for transportation of the fuel. The pipeline was to be funded 50:50 by IOC and Nepal Oil Corp (NOC). The project, however, never took off as Nepal refused to fund its share of cost.
IOC in the meanwhile has decided to shift its oil storage depot from Raxaul to Motihari and the pipeline origin point too may have to be shifted to Motihari. Motihari- Amlekhgunj pipeline will be about 81-kms long and cost Rs 200 crore.
"It is not a very big pipeline but we have to secure statutory clearances from authorities in India as well as Nepal before work on the pipeline can begin," said a senior IOC official.
The Raxaul-Amlekhgunj project was to cost about Rs 100 crore excluding the cost of land acquisition and the new line would cost almost double of that, he said.
Nepalese Commerce Minister Sunil Bahadur Thapa had raised the issue when he met Oil Minister Dharmendra Pradhan on July 30.
"IOC is our main supplier of petroleum products. I have reopened the subject (of laying the pipeline) with the Minister (Pradhan). We want IOC to lay the pipeline," he had told PTI after the meeting.
Nepal was keen on the pipeline from Motihari to Amlekhganj in view of the traffic congestion and frequent complaints of pilferage and adulteration during trucking.
The IOC official said the pipeline will now be built by the company.