Nepal | July 16, 2020

Imports for petro pipeline project get customs waiver facility

Sujan Dhungana
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A view of Nepal Oil Corporation Limited Central Office, Babarmahal, Kathmandu, on January 4, 2017. Photo: Sureis/THT Online

Kathmandu, July 26

The government has decided to give customs waiver facility for equipment that will be used for the construction of Nepal-India petroleum pipeline.

Sushil Bhattarai, the Nepal coordinator of the Raxaul-Amlekhgunj oil pipeline project, informed that Nepal Oil Corporation (NOC) has recently received a letter from the Ministry of Finance (MoF) allowing customs waiver on all necessary equipment for the cross-border oil pipeline.

However, the construction of the 41-kilometre oil pipeline project is yet to start.

“This decision of the government means that equipment like pipes, knot bolts, excavators, pipe-fitting machines and equipment, among other construction materials required for the project will get customs waiver facility,” Bhattarai said, adding that this decision of the government will expedite the construction work once it begins as necessary equipment for the project will not have to face customs hurdles.

A month ago, the Ministry of Supplies (MoS) had written to MoF seeking customs waiver facility for equipment imported for the fuel project.

However, it is to be noted that the construction works of the oil pipeline project are yet to commence though the two countries had inked the agreement on the project on August 24, 2015.

As of now, the two parties — NOC and the Indian Oil Corporation (IOC) — have only completed the Detailed Engineering Report (DER) of the Raxaul-Amlekhgunj pipeline, while the Nepal side is yet to complete the Environmental Impact Assessment (EIA) of the project and clear encroachments along the finalised route of the pipeline project.

However, things seem to have moved little ahead as the IOC in March called for a global tender for the procurement of pipes to be laid along the finalised route of the pipeline project (Birgunj Customs-Birgunj Bypass-Gandak-Parwanipur-Jitpur-Simara-Pathlaiya-Amlekhgunj).

As per Bhattarai, different Indian companies are currently manufacturing pipes for the project as per the common standards approved by NOC and IOC.

Meanwhile, NOC has sought permission from the government to use the defunct Birgunj Sugar Mills as the warehouse to store the imported pipes and other equipment for the pipeline project. “We have asked MoF to allow NOC to store pipes and other equipment related to the petroleum project at the Birgunj Sugar Mills, which has remained shut for almost two years,” informed Bhattarai.

Though NOC officials are still unsure about the actual date when the construction works of the oil project will commence, they are optimistic that it will begin soon.

The Raxaul-Amlekhgunj oil pipeline is a much-hyped project, which was first proposed in 1996. However, the project edged closer to reality during Indian Prime Minister Narendra Modi’s visit to Kathmandu in 2014.

The petroleum pipeline project, which is estimated to cost INR 2.75 billion, is expected to be crucial to ensure regular supply of petroleum products in the domestic market and reduce fuel transportation cost.


A version of this article appears in print on July 27, 2017 of The Himalayan Times.

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