Nepal | August 05, 2020

Cost of building cross-border pipeline soars

Construction of Motihari-Amlekhgunj project expected to top Rs 5 billion due to delays

Sujan Dhungana
Share Now:

The cost of building the Motihari-Amlekhgunj oil pipeline has gone up by at least 15 per cent compared to earlier projection
following delay in construction of the project.

Owing to inflation of construction materials required for the project like pipes, rods, cement and labour costs, among others, in the past couple of years, the cost of the cross-border petroleum pipeline has climbed much higher today, informed a highly placed source at Nepal Oil Corporation (NOC).

“Execution of the Motihari-Amlekhgunj fuel pipeline project is taking longer than anticipated. The project cost today has already risen a lot and is bound to increase further if the project construction work is not started soon,” said the NOC official, adding that both Indian and Nepali authorities should coordinate to execute the project as soon as possible.

The two governments (Nepal and India) had signed an agreement of the pipeline project on August 2015 and the overall cost of the 36-kilometre-long project was estimated at Rs 4.40 billion. One of the provisions in the deal was to complete the project within 30 months.

However, two-and-a-half years have passed since Nepal and India signed the project agreement while the construction works of pipeline project is yet to commence.

According to the NOC official, the cost of the Motihari-Amlekhgunj oil project has increased by over Rs 600 million over the last two-and-a-half years. This means that constructing the pipeline project today will cost more than Rs five billion.

As per the agreement that the two countries had inked earlier, India would contribute Rs 3.2 billion in the project, while Nepal would inject the remaining cost. Thus, it is for sure that the increased project cost of the cross-border oil pipeline will also add financial burden on the government here.

Meanwhile, the project has gained momentum in the recent months and NOC officials are optimistic that construction of the project will start soon. The Indian Oil Corporation (IOC) and other agencies appointed by IOC for the project have already started unloading the pipes along the finalised route.

“As IOC had stated it could start construction works of the petroleum pipeline project once at least 10 kilometres of the project’s route was fully ready, we are expecting IOC to start the pipe laying process from the Parwanipur-Pathlaiya section (stretching almost 20 km), as issues related to encroachments along this part of the planned project route have been settled,” said Sushil Bhattarai, acting deputy managing director at NOC.

As the project was inked between the governments of the two countries, high-level government officials from both Nepal and India are likely to jointly inaugurate the construction of the project in the near future.

A version of this article appears in print on March 06, 2018 of The Himalayan Times.

Follow The Himalayan Times on Twitter and Facebook

Recommended Stories:

More from The Himalayan Times:

Former king Juan Carlos decides to leave Spain amid corruption allegations

Prosecutors looking into bribe allegations Pressure had been building on royals to take action Former king remains "at the disposal" of prosecutors The 82-year-old helped guide Spain back to democracy MADRID: Spain's former king Juan Carlos has decided to leave his country, a drama Read More...

Ruling party co-chairs stick to their guns

Oli to remain PM till general election, co-chair till General Convention: NCP leader Gokul Baskota Kathmandu, August 3 Co-chairs of the ruling Nepal Communist Party (NCP) Pushpa Kamal Dahal and KP Sharma Oli held talks today in an attempt to break the current impasse in the party, but failed to Read More...

Airlines seek permission to resume flights

Airline companies have to resubmit their proposal for slots if flight operations are halted for more than 60 days Kathmandu, August 3 The government's decision to resume domestic and international flights from August 17 has prompted airline companies to start submitting their proposals to the Ci Read More...

Dhading bans sand mining during monsoon

Dhading, August 3 In view of increasing deaths related to river mining, the authority in Dhading decided to impose a complete ban on sand mining from rivers in the district during the monsoon season. There is already a rule that bans mining of river products using heavy equipment during the ra Read More...

File photo of Melamchi Water Supply Project tunnel.

‘Technical error caused Melamchi tunnel accident’

Kathmandu, August 3 A committee formed to investigate Melamchi tunnel incident has concluded that one of the sluice gates on the tunnel of the Melamchi Water Supply Project had broken due to a technical error. A project engineer and a driver had died due to the flood resulting from the breakag Read More...

reproductive health, Minister of State for Health and Population, Padma Kumari Aryal

Work responsibly, Minister Aryal directs employees

Kathmandu, August 3 Minister of Land Management, Cooperatives and Poverty Alleviation Padma Kumari Aryal has directed government employees to work responsibly as the ministry has the responsibility of protecting the property of over 30 million people of the country. She said this at the annual Read More...

PM visits under-construction museum at his private residence

Bhaktapur, August 3 Prime Minister and Co-chair of the ruling Nepal Communist Party (NCP) KP Sharma Oli today visited his private residence at Balkot and met with people from different walks of life. This is the third time the prime minister has visited his private residence after being electe Read More...

‘Harsher punishment against acid attackers’

Kathmandu, August 3 Women and Social Welfare Committee of the House of Representatives has directed the home ministry to make some amendments to the legal arrangement and punishment related to incidents of acid attack, pointing out the need of timely revision. After the discussion held on ‘a Read More...