Nepal | August 12, 2020

Govt fails to seal concrete deal on ‘fuel storage’ with China

Himalayan News Service
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Kathmandu, June 22

Though Prime Minister KP Sharma Oli has signed various agreements with China, the government has failed to seal a concrete deal on the much-hyped fuel storage pact with the northern neighbour.

Nepal and China on Thursday agreed to study the possibility of building oil storage facilities in the sites identified by Nepal with support from China. However, this agreement is just the continuation of what the two governments had agreed during the previous visit of Prime Minister Oli to China in March, 2016.

This failure of the government to ink a concrete deal on the concerned issue is certain to hit the government’s plan to expand fuel storage facilities across the country that it plans to do through Chinese assistance.

Government officials said that the inability of Nepal to identify necessary land for the development of fuel storage facilities in planned sites affected the government’s plan to seal a concrete deal on fuel storage with China.

Nepal had requested the Chinese government to develop fuel storage facility during PM Oli’s earlier visit to China. Since then, the government has only identified Khaireni of Tanahu, Battar of Nuwakot, and Panchkhal of Kavre as possible sites
for the development of fuel storage facilities.

“Not much work regarding the storage facility was done prior to the formation of new government to capitalise the plan to build fuel storage facilities as planned,” informed a government official seeking anonymity, adding that a concrete deal with China on fuel storage facilities was not possible with Nepal doing less homework on its side.

With limited resources and technical knowledge in hand, the government had sought Chinese technical and financial assistance for the construction of fuel storage facilities. Considering the increasing demand of petroleum products in the country, the government plans to develop fuel storage facilities that can cater to domestic demand for at least three months.

Meanwhile, Sushil Bhattarai, acting deputy managing director of Nepal Oil Corporation (NOC), said that Thursday’s agreement between the two governments, though not concrete, will help expedite the process of building fuel storage facilities across the country.

“A separate committee has been formed to identify areas viable for constructing fuel storage facilities across proposed sites. Once necessary land is identified, the technical committees of both the nations will sit together to decide on the following,” said Bhattarai.

Construction of fuel storage facilities by the Chinese government is also a part of NOC’s plan to enhance the petroleum storage capacity to 415,000 kilolitres from the existing 72,000 kilolitres.

A version of this article appears in print on June 23, 2018 of The Himalayan Times.

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