KATHMANDU, 17 NOV Â 2014 – The Nepal Oil Corporation (NOC) is set to offer the Indian Oil Corporation (IOC) to construct the proposed pipeline along the alignment of Pathlaiya-Raxaul Highway which the state oil monopoly believes is the most cost efficient of all the available options.
â€œThe route is estimated to be 38 km long as compared to 41 km along any other alternative routes,â€ said a high-evel NOC official, talking of the proposalâ€™s final draft.
The government will be much relieved in terms of compensation costs if this route is considered, according to the official. â€œThe government will have almost no liability for paying the compensation amount.â€
Of the two other alternatives, one that runs through Pathlaiya-Raxaul Highway, which also incorporates agricultural land, is said to be 26 km long and 10 metre wide. Considering this option for the project would cost an estimated Rs 1.60 billion in compensation to acquire land.
Similarly, the third option includes laying the pipeline alongside of the highway, also covering certain area of the railway track. With a sizeable area already being encroached by local people, the government could face a lot of trouble clearing the railway track, said the NOC official.
The government had formed an expert committee comprising representatives from both sides to recommend appropriate model for the cross-border pipeline project during signing ceremony of the deal between Nepal and India.
In addition to clearing the route for the project, the NOC is set to urge the Indian side to complete the pipeline construction within 30 months.
The NOC source said that the draft also incorporates IOCâ€™s pre-condition that the NOC must purchase petroleum products from the IOC for the next 25 years if it were to take up the entire investment of the pipeline construction.
The draft has also left open the option to let the private sector use the pipeline, saying that they can buy products by paying necessary tariffs.
According to the NOC, the final assessment report will be submitted to the Ministry of Commerce and Supplies in the next few days. The IOC will also submit the report to the Indian government. Both countries would then finalise the draft, following which the financial matter would be settled at a higher level.