Nepal | April 10, 2020

MoS plans to build petroleum storage facilities in all provinces under PPP model

Himalayan News Service

Kathmandu, October 19

The new petroleum storage facilities that the government has planned to build in each province will be developed based on the Public Private Partnership (PPP) model, according to Minister for Supply Deepak Bohara. He further informed that the Ministry of Supply (MoS) will publish a notice within a month calling for proposals from private sector bodies who are interested to build the petroleum storage facilities.

The government has a major plan to set up one petroleum reserve tank in each of the seven provinces and has been working on it lately.

“We will build these fuel storage tanks as per the PPP model. The ministry will call for proposals from interested private sector bodies within a month and expedite the construction process of petroleum reserve tanks in all provinces this year,” Bohara told The Himalayan Times, adding that MoS, however, will provide required land to all selected private companies to construct the oil storage tanks.

However, once the construction of these petroleum storage tanks is completed they will be operated in BOOT (Build, Own, Operate, Transfer) model. “After the selected companies complete the construction of the petroleum storage tanks, they will be allowed to operate them and make profit for around 15 years. After the given timeframe, the private companies will have to transfer the ownership to the government,” said Bohara.

Meanwhile, Nepal Oil Corporation (NOC) has already announced that it would invest Rs five billion for infrastructure development and land procurement for setting up one petroleum reserve tank in each province. Talking to The Himalayan Times earlier this week, NOC Managing Director Gopal Bahadur Khadka had claimed that NOC would complete the land procurement process within this fiscal year.

NOC aims to increase storage capacity to 388,000 kilolitres from the existing 71,000 kilolitres by constructing oil storage tanks in different provinces. Under its plan, NOC aims to develop reserve tanks of 55,000 kilolitres in province 1; 36,000 kilolitres in province 2; 137,000 kilolitres in province 3; 40,000 kilolitres in province 4 and 65,000 kilolitres in province 5. Likewise, petroleum storage tanks of 30,000 kilolitres will be installed in province 6 and with 25,000 kilolitre capacity in province 7.

Meanwhile, Minister Bohara also informed MoS has recently given approval to Nepal Police, Nepal Army, Armed Police Force and National Trading Ltd to open a total of 20 petrol pumps on their own. “The ministry this year will focus on developing infrastructure to increase storage capacity of petroleum products and ensure their smooth supply in the market.”


A version of this article appears in print on October 20, 2016 of The Himalayan Times.

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