Instead, in a novel proposal under Government review, Petronet India will hold 51 per cent stake in the Rs 4,400-crore project, with RPL and Essar Oil holding 26 per cent and 13 per cent each. The stakes of these two private companies have been computed based roughly on their individual refining capacities. The balance will be taken up by a financial institution.

RPL will commission a refinery with a capacity of 21.5 million tonnes, while Essar's project, to go on stream next year, is being planned at 10.5 million tonnes. The products from these two refineries will form a major part of the input for the pipeline and, therefore, the Government thinks it fit to allot stakes to them instead of the threepublic-sector units (PSUs).

The equity structure for the pipeline has been hanging fire for over two months, and unconfirmed reports have indicate that IOC, HPCL, and BPCL have been clamouring for a share of the pie. This would be in addition to the stakes of Petronet, RPL, and Essar Oil. Sources said that the Government would have been hard pressed to allot an acceptable stake to six participants, and has hence decided to deviate from the conventional route.

This would have meant giving Petronet a 26 per cent stake as is the practice for its other pipelines. Such a move could have, however, spawned a tug-of-war between the other five participants, which would have been difficult to resolve amicably.

"The three oil PSUs have nothing to lose by not participating in the equity of the pipeline. The holding company, Petronet, will represent their interests with a 51 per cent stake, and this is an important point as it holds only 26 per cent in other pipeline projects," the sources said. These include thenetworks planned from Vadinar to Kandla and from Cochin to Karur where, along with Petronet, IOC and BPCL hold 26 per cent of the equity.

The Central India Pipeline network will begin from Jamnagar and reach Koyali, where a new product-storage terminal of IOC's Gujarat refinery is being planned. Rajkot is proposed to be an intermediate delivery point en route.

The products of the Gujarat refinery will be injected into the system at Koyali. The provision of connecting the Central India Pipeline with IOC's Koyali-Ahmedabad and Koyali-Navagam pipelines at Koyali has also been made for flexibility in the supply source.

From Koyali, the pipeline will extend to Ratlam, where it will be bifurcated into two networks. The northern trunk pipeline will go to Kota and terminate at Gwalior, while a 180km branch pipeline is planned from the Ratlam-Kota section.

The other network, the southern trunk pipeline, will pass through Itarsi and thereon to Nagpur. It shall either be terminated here or be extended up toHyderabad, depending upon the viability of the Nagpur-Hyderabad section. Branch pipelines are planned for Indore and Bhopal from the Ratlam-Itarsi section.

The cost of the Central India Pipeline project has been estimated at around Rs 4,400 crore, and assuming a debt-equity ratio of 3:1, the stakeholders will have to contribute Rs 1,100 crore.

Last October, RPL had submitted its pipeline plan, which involved constructing a 550km network from Jamnagar to Indore via Ahmedabad. In the second phase, the company planned to extend this from Indore to Hyderabad via Bhopal and Nagpur. Two branch pipelines were also part of the proposal -- one from Ahmedabad to Patna via Udaipur, Kota, Gawalior, Kanpur and Allahabad, and the other from Ahmedabad to Hazira.

Petronet objected to the plan in a communique to the petroleum ministry as this project was planned by RPL on its own, unlike others which came under the Petronet umbrella. The apprehension then was that oil PSUs would also build pipelines on their own withoutrouting them through Petronet. The other problem was that the RPL plan could even jeopardise some projects of Petronet like Koyali-Ratlam, Bina-Jhansi-Kanpur and Paradip-Rourkela-Ranchi-Allahabad.

While this issue was being sorted out, Essar Oil submitted a proposal for a pipeline from Jamnagar to Ahmedabad and thereon to Meerut via Ratlam, Kota and Faridabad. A spurline was also planned from Kota to Jhansi, Kanpur and Allahabad. A committee was set up to examine these projects and those planned by Petronet, and it was decided that while finalising the modified Central India Pipeline, the northern branch would terminate at Gwalior.