Seven-year old construction plan was delayed due to controversial land purchase deal related to former NOC chief Gopal Bahadur Khadka

Nepal Oil Corporation (NOC) has stepped up its effort for the construction of petroleum storage plants in Bhairahawa, reviving its seven-year old controversial plan for this purpose.

Pradeep Yadav, a senior official of the NOC and project manager, said the state-owned oil monopoly is investing Rs 3 billion to construct the storage plant in 13.7 bighas of land situated on the bank of Rohini River. According to him, the NOC on Wednesday laid the foundation stone to start the preliminary works including construction of retaining wall, embankment and land filling at the project site.

In its new plan, the NOC is constructing storage plants to stock more than 9,000 kiloliters of petroleum products. Yadav informed that three tanks each with capacity to stock 2,100 kl of diesel, two plants each with capacity to store 1,600 kl of petrol and three tanks each with capacity to stock 70 kl of kerosene will be constructed under this project.

The storage construction plan courted controversy after the then NOC Chief Gopal Bahadur Khadka was found embezzling millions of rupees while procuring land to set up fuel storage facilities in 2017. Following the incident, the parliamentary Industry, Commerce, Labour and Consumer Welfare Committee asked the authority not to construct the storage plant on the bank of the river, citing the possible risk due to the flooding in Rohini River.

However, NOC seems firm to carry forward its plan in the same location. The state-owned oil monopoly is reported to be investing huge amounts just to keep its storage infrastructure safe from flooding in the river.

Former NOC Chief Khadka was accused of amassing disproportionate assets worth more than Rs 180 million through an unfair land purchase deal. Last year, the Special Court convicted him guilty in the case.

Out of the purchased 14.7 bighas of land, the NOC is constructing its storage plants in 13.7 bighas of the land. According to Yadav, they will finalize the design of storage plants by October, while the construction will start from December. The corporation aims to complete the construction works by mid-April 2026.

The government through its policy and program for the fiscal year 2016/17 has adopted a policy to maintain petroleum stock sufficient to meet domestic demand for at least 90 days. However, it has not been materialized till date.

According to the NOC, it has stepped up efforts for the construction of a new storage plant citing low storage capacity of its Bhalbari Depot, located between Bhairahawa and Butwal. The depot was set up to dispatch around 10 tankers a day, while it is now under pressure to supply an excessive quantity than its actual capacity.