India and Nepal have decided to go ahead with the proposal for a 41-km petroleum pipeline between the two countries at a cost of around Rs 100 crore. The pipeline is to be laid between Raxaul in Bihar to Amlekhgunj in Nepal.
Initially proposed by Indian Oil Corporation (IOC) in 1995, the project was aimed at cutting the transportation costs by half. It was also meant to help the land-locked Nepal in solving its fuel-shortage problem. India is to give financial and technical knowhow assistance for the project.
A pre-feasibility study and technical study was carried out in 2004 and 2006, respectively. However, there has been hardly any progress in the project so far. One of the factors for the delay was the reported indecision of the Nepal Oil Corporation regarding building the pipeÂline all by itself or in partnership with IOC. Both countries also discussed ways to increase trade and investment as well as the security concerns expressed by Indian investors.
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