Nepal | May 30, 2020

NOC to re-start bitumen business

Himalayan News Service
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  • Nepal Oil Corp is planning to supply Indian bitumen rather than producing it in the country

Kathmandu, March 2

Nepal Oil Corporation (NOC) is preparing to resume its bitumen business by the end of the ongoing fiscal year.

The state-owned enterprise stepped out from the bitumen business in 1996 after the corporation’s bitumen production plant located at Amlekhgunj ran into losses.

However, considering the rising number of complaints about the low quality of this road surfacing material in the domestic market, NOC is gearing up to restart the bitumen business. But this time, NOC plans to start supplying Indian bitumen in the domestic market rather than producing bitumen in the country itself.

Bitumen is a mixture of hydrocarbons and is basically used for road surfacing and roofing.

“The NOC board has already authorised the corporation to begin bitumen trade with India and Indian Oil Corporation (IOC) is ready to start supplying bitumen to NOC,” informed Birendra Goit, spokesperson for NOC, adding that the corporation will finalise the transportation and marketing mode of bitumen within next one-and-a-half months and start importing bitumen by the end of the ongoing fiscal year.

Meanwhile, NOC recently formed a committee to study and prepare the modality of bitumen business and trade. The committee is expected to submit its study report to NOC management within next one month.

As per Goit, bitumen imported by NOC will have quality assurances and discourage the supply of poor quality bitumen in the domestic market, which has been resulting in shorter lifespan of roads.

“The use of poor quality bitumen in surfacing roads in Nepal has made the country’s roads prone to getting damaged quickly,” said Goit, adding that good quality bitumen will ensure durability of roads.

NOC, however, is yet to determine the amount of bitumen to be imported from India and its price.

Meanwhile, NOC officials opined that the Department of Roads (DoR) should recommend the use of NOC-imported bitumen to its road contractors. “This will ensure durability of roads and also ensure that the NOC-imported bitumen gets better market.”

The bitumen business will help to diversify NOC’s role and is expected to improve the financial condition of the entity.

“It is a must to make NOC a financially strong firm, as it  has been in recent times initiating mega projects related to petroleum infrastructure development,” added Goit.

A version of this article appears in print on March 03, 2018 of The Himalayan Times.

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