The $1.5 billion financing of the Iran-Pakistan (IP) gas pipeline project has been posing a great challenge to Pakistan since the project is being pursued against the US’s wishes.
On its pressure, India has already abandoned the project a few years ago while the recent backing out of a consortium led by a Chinese bank has left the Economic Coordination Committee (ECC) in troubled waters. However, the ECC has formed a committee to look for other options as the energy-starved country seems resolute to carry out the project at any cost. The Petroleum Ministry has proposed four options in this regard, including funds generation through the gas infrastructure development cess, looking for another consortium of companies, a government-to-government arrangement with Iran or involving the governments of China and/or Russia.
The first option may face a massive reaction as gas consumers are already overburdened with the commodity’s higher price since imposition of the 10 percent cess on February 1. Any further taxation would break the back of the already crushed masses. Likewise, the likelihood of involving another consortium of companies to do the needful is slim because of the US sanctions on Iran, as a result of which the otherwise rewarding project has lost its charm. The third option of a government-to-government arrangement with Iran may also run up against non-availability of sufficient funds. Despite Pakistan’s request to Iran a little while ago, it could not offer more than $300 million to Pakistan for the IP project.
The fourth option, however, looks promising. China has shown interest in the extension of the pipeline to its territory. It can be approached for financial assistance. Similarly, the increasing engagement between Russia and Pakistan has already led Russia to offer Pakistan its support through involvement of its companies in development of the IP project. Mutual cooperation with both these major countries can be established. Their involvement would also help Pakistan sustain the US pressure against the project while Iran would also receive the much-needed support of the two major powers that are also members of the UN Security Council.
The IP project is critical for the survival of our beleaguered economy. Foreign Minister Khar’s latest statement on the IP project reflects the same urgency. The government should leave no option unexplored and no stone unturned. The Chinese bank’s withdrawal might be an outcome of US pressure. However, that pressure does not further the US-promoted option of the TAPI gas pipeline project, dependent on stability in restive Afghanistan. Facing a similar uncertainty due to the unrest in Balochistan, the IP project also calls for a political settlement in the troubled province. – Dailytimes