Date:19/05/2006 URL: http://www.thehindubusinessline.com/2006/05/19/stories/2006051900630700.htm

Back `Allow 10-yr tax holiday for gas pipeline projects'

Our Bureau

New Delhi , May 18

The Federation of Indian Chambers of Commerce and Industry has urged the Government to allow a 10-year tax holiday for oil and gas pipeline laying projects.

The chamber has suggested a similar tax holiday under Section 80IA of the Income Tax Act for storage terminals and other related facilities for transportation and storage of petroleum products.

In a memorandum to the Finance Ministry and the Ministry of Petroleum and Natural Gas, the chamber has pointed out that commissioning petroleum production and refining capacities would be of use only if pipelines, storage terminals and other related facilities for transportation and storage of petroleum products are created.

`Will solve unemployment'

The incentive would also help in resolving the problems of unemployment, as construction of 1,000 km of pipeline is estimated to take an average of 26,000 man-years with a construction time of around 10 years.

The chamber has stated that the country needs at least 5,000 km of additional gas pipeline network, apart from the planned construction of 17,000 km by the public sector.

It said that since laying of pipelines is in the larger interest of the people, such infrastructure should be declared as "public goods."