Railways Oppose Oil Pipeline Projects
The railways ministry has mounted a campaign within the government to scuttle proposals of oil companies on two pipeline projects in South India. It feels that the proposals amount to duplicating investments on carrying petroleum products which will result in a reduction of freight business for Indian Railways. The ministry has written to the Planning Commission and the petroleum secretary and railway minister Nitish Kumar is expected to raise the issue in the Union cabinet shortly, Rail Bhavan sources said.
Bharat Petroleum has planned a pipeline between Cochin and Karur near Coimbature costing around Rs 450 crore, while Hindusthan Petroleum wants to lay a Mangalore to Bangalore pipeline for transporting petroleum products at a cost of around Rs 800 crore. The railways are opposing both these projects.
"We do not oppose oil pipeline projects in areas where rail facilities are inadequate. For instance, we did not oppose the Bombay to Manmad pipeline project. But in places like South India where we have surplus capacity, there is no sense in investing huge amounts to create new capacities for moving petroleum products", a Rail Bhavan source said.
"Now that public sector oil companies have been declared Navratnas, they do not need approval of the Public Investment Board. Oil companies are free to work out their own strategies without considering the implications on the economy as a whole", he said. The railway ministry has said that the initial investment on lying the pipelines are so huge that there is no justification in creating additional transportation capacity. "We have to subsidise items like foodgrains and charge more on items like petroleum products and steel. How does the government expect us to subsidise certain items on one hand and then use the argument of higher freight in oil products to allow lying of pipelines ?" the source asked.
The oil companies have also indicated that the demand for petroleum products will shoot upto 112 million tonnes a year in year 2002-03 from 80 million tonnes a year at the end of 1996-97. The ministry of petroleum has assured the railways that it will make available an incremental supply of 3 million tonnes of petroleum products every year till the end of the Ninth Plan period. It has also indicated a requirement of 4,600 additional tank-wagons in the ninth plan period to move the incremental supply of 15 million tonnes by year 2002-03. The oil companies and the railways will invest in equal proportions to create the additional capacity of tank-wagons.