While none of the officials of the three companies -- Petronet, HPCL and MRPL -- was available for comment on the issue, the reports doing the rounds in Delhi suggest that MRPL is "peeved" as it has not been given the right to nominate either a chairman or managing director for the pipeline. The government is believed to have made it clear that this prerogative would be confined to Petronet and HPCL where each would nominate either the chairman or MD.

MRPL has apparently been pressing for this right for quite a while now and the government's stand could have prompted the company to reduce its stake in MBPL. Also, the fact that HPCL is the co-promoter of MRPL may have compelled the two companies to pare their equitycontributions for the project.

It may be recalled that the MRPL board had, only recently, given the go-ahead to take a 26 per cent stake in the pipeline. Till then, there were unconfirmed reports that the company was having second thoughts on participating in the equity as HPCL had already agreed to subscribe to its 26 per cent portion.

With HPCL and MRPL set to reduce their stakes in the project to a combined 26 per cent, Petronet India will now have to seek alternative partners for the pipeline who will subscribe to the balance 48 per cent of the equity. Experts say that financial institutions like State Bank of India and the Infrastructure Leasing & Financial Services could be keen to participate as also the EPC (engineering, procurement and construction) contractor for the project. In fact, for the since time since its inception two years ago, Petronet has decided to offer the EPC contractor a stake in its Rs 535 crore Cochin-Karur pipeline.

The Rs 1,100 crore project (inclusive of alliedinfrastructure) is being commissioned by Petronet-MHB, the joint venture of Petronet India, HPCL and MRPL. It is expected to be fully operational by the end of 2002. The three companies were to hold 26 per cent of the equity each (at a debt-equity ratio of 3:1 which works out to individual equity contributions of around Rs 68 crore).

MBPL will be 364 km long and designed for the final throughput of 8.5 million tonnes. However, other facilities like a pumping system and loading facilities are currently designed for a throughput of 5.6 million tonnes. The pipeline will transport motor spirit, superior kerosene oil, high speed diesel, aviation turbine fuel and naphtha from MRPL.

It will cater to the consumption zones of Karnataka and Andhra Pradesh and would be configured as: