KATHMANDU, Jan. 12 (Xinhua) -- Nepal Oil Corporation (NOC) and Indian Oil Corporation (IOC) are to decide this week whether to form a joint venture company or adopt another modality to build a cross-border pipeline, said NOC managing director Digambar Jha.

    According to Tuesday's eKantipur.com report, NOC and IOC had recently discussed a new modality for the pipeline project as the earlier plan to implement it as a joint venture had raised doubts over its effectiveness and feasibility.

    As per the new modality, the two sides will construct the pipeline separately in their respective territories.

    The pipeline will than be linked after signing a bilateral pipeline treaty. Out of the 40-km length of the planned Raxaul-Amlekhgunj oil pipeline, 38 km lies in Nepal and 2 km in India.

    According to the report, Nepali Commerce and Supplies Minister Rajendra Mahato directed NOC to choose the modality that would benefit the country. He also asked NOC to finalize the modality without any delay.

    "The project has been lingering for the last 13 years, and still there is no sign of its being implemented as everything has to be done all over again," a source said.

    A pre-feasibility study (in 2004) and a technical study (in 2006) had projected the bilateral pipeline project as economically viable, provided it is operated unhindered for 20 years.

    The project, which was first proposed by IOC in 1995, is intended to reduce the fuel transportation costs by over 50 percent.

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