Mumbai, April 8: The expert team set up by the Centre to prepare a report on "India Hydrocarbon Vision 2020" has estimated an investment of around Rs 85,000 crore in creating infrastructure for ports, product tankage and pipelines. This will be needed to meet the requirements arising from the increased refining capacity in 2020.The government had announced the setting up of this team early this year with the objective of accelerating the reforms process in the oil sector and setting clear guidelines in place. The group was specifically asked to make an assessment of infrastructure requirements and planning for developing of ports, shipping tonnage, railways, product pipelines and tankages as also policy measures necessary to expand and upgrade infrastructure.
The team has envisaged that the total expenditure for putting up additional port facilities would be to the tune of Rs 13,000 crores. This has been estimated at an average cost of constructing an oil jetty at Rs 120 crores each and similar cost forsingle buoy mechanism (SBM) to the tune of Rs 700 crores apiece including submarine pipelines. The SBMs are proposed to be constructed at Mundra, Krishnapattinam, Nagapattinam, Cochin, Vizag etc and the oil jetties at Mangalore, Kakinada, Gopalpur, Goa and Karwar in Karnataka.
The total cost of construction of additional tankage of 270 lakhs kilolitres would be in the region of Rs 43,000 crore based on an average construction cost of Rs 16,000 per kilolitre between 2002 and 2020. However, if 15 days coverage is considered by 2020, the cost would be halved to Rs 21,500 crore. The total tankage availability by 2002 would be 86 lakh kilolitres going up to 27 million kilolitres in 2020.
As for pipelines, the estimated cost of newly proposed crude pipelines of 4,620 km and product pipelines of 9,840 km would be around Rs 29,000 crore considering the average cost of laying pipeline at Rs 2 crores per km during the period 2000-2020. This would involve an enormous network where the crude pipelines would includeHaldia-Barauni, Pipavav-Koyali, Mundra-Sultanpur etc.
The expert team has recommended the following policies for implementation on a long term basis:
In order to safeguard national interest against fluctuation of the international oil market, a policy needs to be evolved stipulating minimum days cover required in the country both for finished product and crude separately. A compensation package for additional inventory carrying cost and return on additional investment on infrastructure by oil companies should be firmed up on a long term basis. The tariff structure for each port should be rationalised under the guidance of tariff authority on major ports (TAMP) for the purpose of uniformity. Wherever jetties/single buoy mechanism/other non-marine facilities are provided by the oil industry, a scheme of rebate on wharfage should be worked out by TAMP so as to provide adequate return on investment to the oil industry. The allocation of land for development of port terminals andadditional infrastructure facilities for the port should be given to oil industries on nominal basis at reasonable price/rent. A policy guideline by the Centre should be circulated to all states/railways for allocation of land for the oil industry on a priority basis. All facilities in the petroleum sector including refineries, pipelines, tankages, bottling plants, jetties etc should be given infrastructure status for exemption of duties/taxes. To avoid criss-cross movements of petro-products because of differential tax between adjacent states, an uniform sales tax/octroi structure should be adopted throughout the country. This will not only help conserve petro-products and the environment but also ultimately result in reduction of prices.The panel made the following assumptions for creation of railway infrastructure while acknowledging that there was no representative from the Railway Board:
Because of increased cost of transportation of POL products by rail and cheaper mode by bothpipelines and road in the future, transport of POL products by rail will come down sharply. It is envisaged that railway share of POL product transport would come down from the 45 per cent to 30 per cent by 2020. The track capacity and non-availability of locomotives would be a major hindrance in rail movement resulting in increased turnaround time of tank wagon rakes. Railways insistence to oil companies and customers for purchase of tank wagons under the "own your wagon scheme" owing to lack of funds will encourage the oil majors to lay additional pipelines and customers to increase their POL movement by road.The team also felt that even if the percentage of POL transport by rail reduces, there would be a substantial increase in movement of POL traffic in terms of quantity. Therefore, the Railways should take immediate steps to increase track capacity, invest in more locomotives and take steps to convert metre gauge to broad gauge tracks.
The panel has estimated that even at 30 per centlevel of POL transport by rail, the total tonnage of movement would be 90 million tonnes as against the present 40 million tonnes. The Railways should gear up for undertaking this additional load.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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