The Telegraph
Since 1st March, 1999
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Haze over pipeline thickens

New Delhi, April 3: The Numaligarh-Siliguri pipeline appears to have got bogged down in a sea of red tape, delaying a project that is widely seen as a much-needed lifeline for the gasping Numaligarh Refinery (NRL).

Clearance for the Rs 464-crore plan, sent by the petroleum ministry to the public investment board (PIB) in the first week of January, has not come through yet. Once it does, the proposal will go to the cabinet for approval and is expected to take 21 months to be completed.

The railways have been opposing the plan on the ground that it will lose large chunk of the freight business. However, statistics show that it has not been able to live up to its promise of carrying products from the refinery, which has limited its output to around 2 million tonnes against its actual capacity of 3 million tonnes. Operating at sub-optimal levels is hitting its profitability too.

The petroleum ministry has reasoned that the railways stand to get more business if the refinery ramps up production on the back of a pipeline. One estimate puts the additional volume to be carried by wagons from Siliguri, the point of the terminal, at 1 million tonnes.

The railways have countered this argument by saying there is a single line running to the Northeast, which limits the number of trains that can be run on the route; it also has to give priority to movement of foodgrain.

The ministry has used this to buttress its point that a pipeline will spare the track for the movement of more foodgrain and other essentials to the Northeast region.

The inability of the railways to provide adequate number of wagons for products has led to a massive pile-up in the storage tanks of the refinery. In monsoon, when the increase in stocks waiting to be transported assumes unmanageable proportions, production at the refinery is brought down ' sometimes stopped altogether.

The movement of trains is thrown out of gear due to the flooding of tracks. The pipeline, on the other hand, will ensure movement without the danger of disruptions. The 16-day shutdown of Numaligarh Refinery due to the floods that ravaged Assam last monsoon is expected to erode its bottomline by around Rs 30 crore.

About 80 per cent of the products made at the refinery are sold outside the Northeast through an arrangement with parent Bharat Petroleum Corporation (BPCL). Most of the retail outlets in the Northeast region are owned by Indian Oil Corporation (IOC), which limits procurements to its own refineries in the area.

BPCL brings products from Numaligarh to the northern and eastern parts of the country, where it has a strong retail network. A pipeline could boost this chain.

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