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			<title>Special report: The future of Pakistan-Iran relations</title>
			<link>https://tribune.com.pk/story/1047339/special-report-the-future-of-pakistan-iran-relations</link>
			<comments>https://tribune.com.pk/story/1047339/special-report-the-future-of-pakistan-iran-relations#comments</comments>
			<pubDate>Mon, 15 Feb 16 12:57:11 +0500</pubDate>
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				<![CDATA[our.correspondents]]>
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			<category><![CDATA[Business]]></category>
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			<description>
				<![CDATA[Will Iran emerge as Pakistan’s major trading partner after the lifting of international sanctions?]]>
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				<![CDATA[Pakistan may not be able to receive gas from Iran even after most sanctions on the latter have been lifted, because it seems that the United States is keen to restrict Russia’s access to the European market.

Influential British daily The Guardian had reported in August 2013: “[Syrian President Bashar al] Assad refused to sign a proposed agreement with Qatar that would run a pipeline from the latter’s North field, contiguous with Iran’s South Pars field, through Saudi Arabia, Jordan, Syria and on to Turkey, with a view to supply European markets — albeit crucially bypassing Russia.”

Read the full story here

&nbsp;



Will Iran emerge as Pakistan’s major trading partner after the lifting of international sanctions?

Perhaps, it will. But as the old English saying goes, there’s many a slip ‘twixt the cup and the lip.

In an ideal world, the removal of international sanctions from a resource-rich neighbouring country should result in a sudden spike in the volume of bilateral trade. But international trade depends on financing from banks on both sides of the border. And in the short term, at least, Pakistani banks are expected to remain wary about doing business in Iran despite the lifting of many international sanctions.

Read the full story here

&nbsp;



Though the United States and other global powers have lifted most of the sanctions from Iran, the fate of oil trade between Pakistan and the neighbouring Islamic republic is still uncertain.

According to officials, it will become clear whether Pakistan will be able to resume oil imports when banking channels are opened.

Earlier, two refineries – Pakistan Refinery Limited (PRL) and Bosicor – had been importing crude oil from Iran until 2010 and later purchases came to a halt as banks refused to open letters of credit after the imposition of sanctions on Tehran.

Read the full story here

&nbsp;



With the dismantling of most sanctions on Iran, the Pakistan-Iran Joint Border Commission, in its 19th meeting in Quetta, vowed that it would now give legal cover to all trade between the two neighbours.

The decision may give a welcome boost to Pakistan’s economy that is expected to save at least Rs10 billion annually due to decrease in oil smuggling.

Talking to The Express Tribune, Balochistan Customs Collector Saeed Khan Jadoon said diesel was being smuggled through the Makran division, especially the Panjgur, Kech and Gwadar routes. “We run short of manpower, so we can’t effectively control smuggling,” he said.

Read the full story here

&nbsp;



Desperate to take the much-awaited step towards reviving trade relations, Pakistan is mulling enforcing its five-year bilateral trade roadmap, already envisaged with an ambitious target of $5 billion, up from the present $270 million.

Unlike the past, Pakistan now wants to move away from certain commodities and wants to expand and diversify its exports.

The key potential trade areas Pakistan is eyeing are rice, horticulture, sports goods, surgical equipment, information technology, textile goods and construction material.

Read the full story here]]>
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			<title>India should bypass Pakistan for gas pipeline with Iran: Assocham</title>
			<link>https://tribune.com.pk/story/947967/india-should-bypass-pakistan-for-gas-pipeline-with-iran-assocham</link>
			<comments>https://tribune.com.pk/story/947967/india-should-bypass-pakistan-for-gas-pipeline-with-iran-assocham#comments</comments>
			<pubDate>Mon, 31 Aug 15 06:32:29 +0500</pubDate>
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				<![CDATA[web.desk]]>
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			<category><![CDATA[Pakistan]]></category>
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			<description>
				<![CDATA[Assocham says proposed pipeline projects involving Pakistan may not materialise due to critical political situation]]>
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				<![CDATA[The Associated Chambers of Commerce and Industry of India (Assocham) has suggested that India should take advantage of the removal of western sanctions on Iran and should bypass Pakistan to import natural gas from Iran.

"Lifting of western sanctions on Iran throws up a great opportunity for India to transport natural gas from Iran to Porbandar port in Gujarat, bypassing Pakistan -- the main sticking point for other multilateral projects of Turkmenistan-Afghanistan-Pakistan-India (TAPI) and Iran-Pakistan-India (IPI)," the industry body said.

Read: After Iran deal: Wrangling intensifies over gas pipelines in Pakistan

The trade association also recommended that the undersea pipeline project should bring Iranian gas to India via the Arabian Sea. Further, it said India should increase its merchandise trade with Iran by signing a preferential trade agreement (PTA), citing the example of one with Pakistan that has boosted its exports to Iran and increased bilateral trade as well.

"With the IPI pipeline still stuck and the TAPI pipeline yet to take off, the South Asia Gas Enterprises Pvt (SAGE) has proposed an under sea pipeline bypassing Pakistan's exclusive economic zone (EEZ) to transport up to 1.1 billion standard cubic feet per day of gas from Chabahar in Iran and Ra's al Jifan in Oman to Porbandar in Gujarat with a spur line to Mumbai later. The 1,200km to 1,300 km pipeline is set to cost around $4.5 billion," the chamber pointed out.

Assocham Secretary General D S Rawat remarked that the proposed pipeline projects involving Pakistan may not materialise due to the critical political situation. "Given the kind of serious political problems, the proposed pipeline projects involving Pakistan, it is feared, may remain a pipe dream. All other viable alternatives to enhance India's energy security must be explored," he said.

The consortium of Indian public sector companies, ONGC Videsh, Oil India and India Oil Corporation, had discovered gas in the Farzad-B block in Iran in 2008 and subsequently, prepared a field development plan to recover about 12.8 trillion cubic feet of gas. However, according to Assocham, the plan had to be abandoned following sanctions on Iran. India has already spent $90 million on exploration.

Read: Iran's strategic port offer to help India bypass Pakistan

The SAGE pipeline, also called Middle East to India Deepwater Pipeline (MEIDP) project, would start from Chabahar on the southern coast of Iran and Ra's Al Jifan on the Oman coast. The pipeline, which would run deep in the Arabian Sea, would bring gas to Porbandar in South Gujarat.

The Pak-Iran trade saw considerable progress from 2006-07 to 2008-09 in which bilateral trade rose to an unprecedented level of $1,321.32 million from $573.76 million.

This article originally appeared on The Economic Times]]>
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			<title>IP pipeline: Sanctions had not halted work on project, says expert</title>
			<link>https://tribune.com.pk/story/934737/ip-pipeline-sanctions-had-not-halted-work-on-project-says-expert</link>
			<comments>https://tribune.com.pk/story/934737/ip-pipeline-sanctions-had-not-halted-work-on-project-says-expert#comments</comments>
			<pubDate>Sat, 08 Aug 15 22:30:35 +0500</pubDate>
			<dc:creator>
				<![CDATA[zafar.bhutta]]>
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			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=934737</guid>
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				<![CDATA[Says nuclear agreement will give fresh impetus to cooperation in energy field .]]>
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				<![CDATA[The historic nuclear deal with global powers is expected to strengthen Iran’s position as a regional player and the lifting of sanctions will give a big boost to cooperation in the energy field as well as in other sectors of the economy.


“Of course, Iran’s position has strengthened after the nuclear agreement, but remember Iran is a more diversified economy [unlike Saudi Arabia], and removal of sanctions will lead to growth in many sectors of the economy. It’s not just oil and gas,” said Mahdi Kazemzadeh, CEO of UK-based firm Afraz Advisers, in an emailed response to queries sent by The Express Tribune.

Afraz Advisers is the world leader in providing international oil and gas companies with deep insight into the Iranian energy sector.

Speaking about the Iran-Pakistan (IP) gas pipeline, Kazemzadeh said work on the project had not stalled because of sanctions, but in fact it was mainly due to the inability of Pakistan to finance its end of the project and build the pipeline.

Replying to a question, he pointed to the regional imbalance in gas supply, saying many of Iran’s neighbours in the Persian Gulf would need to import natural gas in coming years. These nations included the United Arab Emirates, Kuwait and someday ever Saudi Arabia, and Iran had the capacity to supply them with gas with the coming on stream of energy-rich South Pars field.

Iran is looking to attract over $100 billion in its upstream oil and gas sector over the next decade in a new scheme of contracts and one-fifth of the amount will be spent on priority fields in the country’s west close to Iraq.

In the downstream sector, Iran is seeking over $62 billion to build the capacity to export around 100 billion cubic metres of gas by 2020 besides meeting domestic demand.

According to Kazemzadeh, the removal of international restrictions on Tehran will also reflect favourably in energy prices as resumption of Iranian supplies is expected to put a downward pressure on prices that will persist in the long run.

Discussing the possibility of gas export to European Union countries, Kazemzadeh said, “I see an enormous potential to revive the Nabucco pipeline project or something similar; I was at a high-level conference in Vienna where many Iranian officials laid out their ambition to export gas to Europe in the next five to ten years.

“The interesting thing is that the EU commissioner for energy is just as keen as I’d say.”

He said that there is no doubt China and Russia would have the advantage to press on with their plants, but Iran was an enormous market with space for everyone.

Published in The Express Tribune, August 9th, 2015.

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			<title>Engaging Iran</title>
			<link>https://tribune.com.pk/story/926831/engaging-iran</link>
			<comments>https://tribune.com.pk/story/926831/engaging-iran#comments</comments>
			<pubDate>Sun, 26 Jul 15 18:02:48 +0500</pubDate>
			<dc:creator>
				<![CDATA[editorial]]>
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			<category><![CDATA[World]]></category><category><![CDATA[Editorial]]></category>
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			<description>
				<![CDATA[There could be a lot more to bilateral ties with Iran than just the gas pipeline project]]>
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				<![CDATA[In recent times, there has been plenty of evidence to suggest that the world, in times to come, is going to be defined by the activities of regional blocs or countries acting together in a number of diverse fields in order to fulfill their mutual interests. The pace of regional integration has witnessed an uptick. We recently saw the formation of the Asian Infrastructure Investment Bank, while The New Development Bank operated by the BRICS countries, provides another instance of emerging national economies coming together to demonstrate their financial health. Pakistan, too, has been in the mix of things as far as some of these new developments go. However, we need to realise that given Pakistan’s geographic and economic potential, there is more to regional integration than just focusing on promoting ties with China or Afghanistan.



Given recent developments vis-a-vis the Iran nuclear deal, the diplomatic lethargy displayed by Pakistan comes as a surprise. While Prime Minister Nawaz Sharif met his counterparts from Russia, China, Afghanistan and India on the sidelines of Shanghai Cooperation Organisation summit recently, the one meeting that did not take place and should have, was with Iranian President Hassan Rouhani. Pakistan must start focusing on its southwestern neighbour immediately instead of waiting for economic sanctions on Iran to be lifted next year. Groundwork for improving economic ties, especially when it comes to meeting our energy needs, must start right away before Pakistan is left behind in the race to invest in that country. While taking lessons from history and exercising required diplomatic caution, Pakistan could take the logical route to developing ties with Iran in the wake of the sanction-lift and explore opportunities for investment and exploration of natural resources. We should go beyond the gas pipeline project and develop other meaningful and profitable business ventures. But that would only happen if Pakistan rids itself of diplomatic lethargy, and approaches Iran in a positive manner to work for mutual benefit. If certain quarters in the country hold that there is only limited scope for a mutually beneficial relationship with Iran, then they are sadly mistaken. There could be a lot more to bilateral ties with Iran than just the gas pipeline project.

Published in The Express Tribune, July 27th,  2015.

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			<title>What the Iran agreement will mean for Pakistan?</title>
			<link>https://tribune.com.pk/story/923305/what-the-iran-agreement-will-mean-for-pakistan</link>
			<comments>https://tribune.com.pk/story/923305/what-the-iran-agreement-will-mean-for-pakistan#comments</comments>
			<pubDate>Mon, 20 Jul 15 19:33:57 +0500</pubDate>
			<dc:creator>
				<![CDATA[Shahid Javed Burki]]>
			</dc:creator>
			<category><![CDATA[Opinion]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=923305</guid>
			<description>
				<![CDATA[With deal in place, Pakistan should be able to move forward with the construction of the Iran-Pakistan gas pipeline]]>
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				<![CDATA[In reporting on the agreement between Iran and the six large powers on July 14, The New York Times found a parallel between what the US president had achieved in 2015 and what then president Richard Nixon was able to do 40 years earlier. For both, their actions represented giant leaps of faith. Nixon’s travel to Beijing and his meeting with Chairman Mao Zedong, brought China out of the closed wall it had erected around itself. Mao was dead a couple of years after the Nixon visit and was replaced by the reformist Deng Xiaoping. Mao’s successor succeeded in initiating a pace of economic growth that was unprecedented in human history. In about four decades, the Chinese economy had increased 35-fold. By late 2014, according to the IMF, China had overtaken the United States and had become the world’s largest economy. President Nixon could not have imagined that his one action would bring about such a revolution in the structure of the global economy.

If the initiative taken by President Obama is Nixonian in scope, what would be its result? The first thing that will undoubtedly happen is that it would end Iran’s forced isolation. In that respect there is a parallel between “Nixon in China” to “Obama with Iran”. The initial phase of isolation was self-imposed. The Muslim clerics who founded the Islamic Republic of Iran in 1979 believed that for them to protect their revolution they had to close down their country and society. This isolation was reinforced when the Western powers imposed stiff sanctions on Iran to force it to abandon its perceived plans to acquire nuclear weapons. The sanctions worked.

The heavy toll they took on the Iranian economy and the sufferings the citizenry had to bear persuaded the Islamic regime to sign the July 14 agreement with the United States and its negotiating partners. Tehran accepted the conditions which will make it impossible for it to develop nuclear bombs for the next 10 years — the period during which time it will not be able to purify uranium to the weapon-grade level, nor would it be able to use plutonium for making nuclear bombs. The agreement has ensured that what is called the “break-out” period — the time taken to make a bomb once the decision is taken to go that route — is at least one-year long. That will be the case if Iran decides to walk out of the agreement.

One major difference between the China and Iran moves is that while the former did not run into serious opposition from the international community, the same is not true for the Iran initiative. The latter is bitterly opposed by Israel, not just by Binyamin Netanyahu, the country’s hardline prime minister, but the entire Israeli political establishment. Also unhappy are the Arab monarchies in the Gulf who have always looked with suspicion and fear at the Shiite state of Iran. It is this opposition that is likely to have consequences for Pakistan.

Islamabad came under considerable pressure from these states to join their campaign against the rebels in Yemen. Pakistan’s response was clever and well thought-through. The matter was put before the National Assembly that turned down the request. This drew an angry response from the leaders of the Gulf States; one of them — a minister from the United Arab Emirates threatened to take unspecified actions against Pakistan. His statement drew an angry response from the authorities in Pakistan.

How will the Arab monarchies react to the agreement? They may decide to aid the forces of sectarian extremism in some of the countries in which they have influence. Pakistan is one such country. There are numerous madrassas in Pakistan that receive funds from the Arab states. Several of these are involved in sponsoring extremist activities in Pakistan. That this was happening was recognised by the Pakistani authorities when they drafted the National Action Plan to counter terrorism. However, because of quarters that were benefitting from the flow of money from the Arab world, the government was slow to act; it did not take the promised action.

But the positive impact on Pakistan of the deal will far outweigh some of the negative consequences. With the deal in place, Pakistan should be able to move forward with the construction of the Iran-Pakistan gas pipeline. Iran has in place a pipeline up to its border with Pakistan. However, Islamabad was reluctant to move on its side of the border because of the fear of American retaliation. Now that Tehran has been promised the easing of sanctions, that fear is gone. In fact, it is possible that India may also join the project. It, too, is desperate to receive a regular and reliable flow of gas.

With Iran gradually rejoining the international economic system, Pakistan can once again begin to plan on creating a regional association that would include the non-Arab Muslim states such as Afghanistan, Turkey and the Central Asian nations. The Chinese will be receptive to the idea; they have already committed large sums of money to Pakistan to construct the China-Pakistan Economic Corridor (CPEC). A system of roads linking this region to the CPEC should become not only possible but economically attractive. In short, the Iran deal may prove to be a game-changer for Pakistan.

Published in The Express Tribune, July 21st,  2015.

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			<title>Business forum: ‘IP pipeline to bring industrial revolution’</title>
			<link>https://tribune.com.pk/story/922874/business-forum-ip-pipeline-to-bring-industrial-revolution</link>
			<comments>https://tribune.com.pk/story/922874/business-forum-ip-pipeline-to-bring-industrial-revolution#comments</comments>
			<pubDate>Fri, 17 Jul 15 17:56:31 +0500</pubDate>
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				<![CDATA[our.correspondent]]>
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			<category><![CDATA[Pakistan]]></category>
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				<![CDATA[APBF President Ibrahim Qureshi said the project was the most feasible financially]]>
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				<![CDATA[The All Pakistan Business Forum (APBF) has welcomed the nuclear deal between Iran and western countries and hoped it will pave the way for implementation of the Iran-Pakistan gas pipeline project, bound to bring an industrial revolution in Pakistan. APBF President Ibrahim Qureshi said the project was the most feasible financially, as well as from the point of view of proximity, and succumbing to any pressure would further worsen the already crippling power crisis. He said now the supply of gas to Pakistan from Iran could be possible within two years. He, however, asked the government to re-negotiate the gas tariff with Tehran because under a clause of the agreement, the tariff can be re-negotiated one year before the supply resumes. OUR CORRESPONDENT

Published in The Express Tribune, July 18th,  2015.

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 ]]>
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			<title>Iran deal — opportunities and challenges</title>
			<link>https://tribune.com.pk/story/922741/iran-deal-opportunities-and-challenges</link>
			<comments>https://tribune.com.pk/story/922741/iran-deal-opportunities-and-challenges#comments</comments>
			<pubDate>Fri, 17 Jul 15 17:15:27 +0500</pubDate>
			<dc:creator>
				<![CDATA[editorial]]>
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			<category><![CDATA[Editorial]]></category>
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				<![CDATA[Being an immediate neighbour, Pakistan is to benefit from the re-entry of a sanction-free Iran into the world markets]]>
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				<![CDATA[The recently concluded nuclear deal between Iran and six world powers, when it would finally take effect sometime early next year, is likely to give an added flip to global demand for goods and services, while at the same time, it would also hopefully induce a major boost to the regional economy. And being an immediate neighbour, Pakistan, too, is likely to benefit from the re-entry of a sanction-free Iran into the world markets. The prospects for Pakistan are immense, but the challenges too are equally formidable. Therefore, it is very important that we approach these welcome developments in a business-like manner but in complete self-interest, both in economic as well as political terms, while pursuing a balanced foreign policy that is based on the principle of friendship with all and enmity towards none. Sounds impossible, but that is the task ahead because in the immediate run we would be required to strike a balance between our close traditional relationship with the Arab world and its self-perceived Middle Eastern rival, Iran.

Luckily, our decision to take a neutral position in the ongoing Saudi-led Arab world attacks on Yemen’s Houthis, who are allegedly being backed by Iran, has won us significant goodwill in Tehran without annoying the former to any worrisome degree. But it is going to remain a tightrope walk in the months and years ahead. Even before the sanctions were imposed on Iran, our economic relations with our south-western neighbour were hardly anything to write home about. Politically as well, the relations were not ideal. In fact, until about the US invasion of Afghanistan in November 2001, the two countries were on the opposite sides of a 10-year-long low-intensity war that was going on between Taliban-ruled Kabul on the one hand and the Northern Alliance on the other. The ongoing sectarian killings in Pakistan have also remained a matter of discord between the two countries for decades.

Well, the past was another century. The present is today. And today an energy-starved Pakistan is happy that the lifting of sanctions against Iran would revive the construction of the Iran-Pakistan gas pipeline without any further delay. Beijing is currently financing the construction of a gas pipeline from Nawabshah to Gwadar, which would then be linked to nearby Iran through an 80-kilometre long pipeline that eventually would be extended through the China-Pakistan Economic Corridor (CPEC) to our northern border near Kashgar in China. Iran’s major imports have been wheat, semi-finished iron, corn and rice. Its major exports include crude oil, gas and refined oil.

To start with, we could negotiate with Iran an export-import arrangement with wheat, rice, cement and gas making up the bulk of our two-way trade. Iran is expecting an investment of $100 billion after the lifting of sanctions, China is already growing at an accelerated rate, India is following it closely and Beijing has committed $46 billion worth of investment in Pakistan for the CPEC. Consequently, the entire region in the immediate vicinity of Pakistan would seem to be on the threshold of an economic take-off.

However, in order to make the most of the Corridor, Pakistan would need to establish normal trading relations with India as well. After lifting of sanctions, the land-locked Central Asian markets could be easily accessed through Iran by traders worldwide, as well as by India. But a transit route through Pakistan would still be a more viable option for India. And if this route were to be connected to the CPEC, the entire region would benefit immensely with Pakistan reaping the most. Therefore, our policymakers, especially those who view our economic policies through the inappropriate prism of self-imagined security threats, should realise that it would be a lot less painful to neutralise countries inimical to Pakistan by creating their vested interest in mutual economic relations than choosing to remain in perpetual confrontation with them.

Published in The Express Tribune, July 18th, 2015.

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			<title>A changing world</title>
			<link>https://tribune.com.pk/story/921496/a-changing-world</link>
			<comments>https://tribune.com.pk/story/921496/a-changing-world#comments</comments>
			<pubDate>Wed, 15 Jul 15 20:02:59 +0500</pubDate>
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				<![CDATA[editorial]]>
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			<category><![CDATA[World]]></category><category><![CDATA[Editorial]]></category>
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			<description>
				<![CDATA[If Iran and the US can do a deal, reach a compromise, then so can India and Pakistan]]>
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				<![CDATA[The deal that has been struck between Iran and the Western powers, including the US, is historic for a number of reasons, not the least being that an apparently impossible diplomatic impasse has been, if not resolved, then at least brought to a point where resolution is a distinct possibility. Iran is to keep its nuclear programme, but with severe limitations to ensure that it does not stray into weaponisation. There are going to be stringent and intrusive inspections and the deal includes a host of other caveats running to 150 pages.

In return, billions of dollars of Iran’s frozen assets are to be released and sanctions are to be progressively eased — with a ‘snap back’ clause if there is any backsliding. Quite predictably, Israel has reacted negatively to the historic development, calling the deal a mistake, and the American Republicans are of similar voice. President Barack Obama, however, was having none of this, saying he would veto any move by the Republicans to derail the deal.

The Arab world is not enchanted either and some commentators have speculated on the possibility of Saudi Arabia now seeking nuclear parity with Iran. Arab states are in something of a limbo, caught up in the battle in Yemen (where Iran is accused of running a proxy sectarian war) and they have nothing beyond oil to bring to the table. Oil prices are dropping like a stone; alternative sources of oil are emerging and alternatives to oil itself increasingly establishing themselves. Old certainties are fading.

Iran remains implacably belligerent towards Israel and there is no shortage of areas of cognitive dissonance surrounding the deal, but one of the great logjams of modern geopolitics has finally begun to give way. The reason why it is giving way is because the time was right for it to do so, and there is something in the deal for all the signatories, albeit in very different ways.

For Iran, there is what it sees as a restoration of its dignity among other intangible benefits, and for a nation where these things matter, that is no small advance. Iran sees itself as taking its place in the world once more, finally free of the shackles of sanctions, a shaking off of a past dominated by America — only to sign up for a future that is no less dominated by America, but with a different playbook. Iran has emerged as a tough player in a tough neighbourhood, not exactly everybody’s friend, but no longer the universal enemy it was stereotypically perceived to be.

For the Western nations, there is the possibility of entering an investment market that has been closed for 30 years and targeting a population that is young, well educated and hungry for the wares potentially on offer. They understand that prosperity is not coming at the flick of a switch, but there is a hope on the horizon that was not there a week ago.

Pakistan shares a long land border with Iran and has a basket of common interests, with energy at the top of the list. Iran urgently needs to sell energy; Pakistan urgently needs to buy it and an easing of the sanctions regime may remove the Damoclean sword of sanctions against Pakistan if the Iran-Pakistan gas pipeline project can be completed. The deal has been warmly welcomed in Islamabad and in practical terms, the infrastructure could be completed relatively quickly.

The deal took two years of bitterly contested negotiation to get to the point it has, and came close to breaking down on several occasions according to John Kerry, the American secretary of state. The key to getting there in the end came down to a single word — compromise. In that single word lies the key to the resolution of our own unhappy relationship with India. If Iran and the US can do a deal, reach a compromise, then so can India and Pakistan. Everything is possible and nothing is forever.

Published in The Express Tribune, July 16th, 2015.

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			<title>PML-N govt diverts IP pipeline funds to cover fiscal deficit</title>
			<link>https://tribune.com.pk/story/571529/pml-n-govt-diverts-ip-pipeline-funds-to-cover-fiscal-deficit</link>
			<comments>https://tribune.com.pk/story/571529/pml-n-govt-diverts-ip-pipeline-funds-to-cover-fiscal-deficit#comments</comments>
			<pubDate>Tue, 02 Jul 13 19:10:43 +0500</pubDate>
			<dc:creator>
				<![CDATA[our.correspondent]]>
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			<category><![CDATA[Business]]></category><category><![CDATA[World]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=571529</guid>
			<description>
				<![CDATA[Seeks to amend GIDC Act to allow it to manipulate gas prices at will.]]>
			</description>
			<content:encoded>
				<![CDATA[The PML-N government has seemingly put the Iran-Pakistan (IP) gas pipeline project on the backburner by deciding to use the funds generated through the imposition of the Gas Infrastructure Development Cess (GIDC) to bridge the fiscal deficit.


The previous government had imposed the GIDC on gas consumers to generate the $1 billion needed to finance the construction of the IP gas pipeline, but the PML-N government is seeking discretionary powers from Parliament to raise gas prices through the cess, in order to bring them at par with prices of other alternate fuels.

Officials said the move may result in a massive rise in gas prices for all consumers except domestic consumers – including the CNG and fertiliser sectors and captive power plants – if the government decides to rationalise gas prices and bring them at par with other alternate fuels like petrol and furnace oil.

Sources said the petroleum ministry had approached the Council of Common Interests (CCI) to seek consent from the provinces to allow the federal government to introduce a new bill in parliament which will amend the GIDC Act, 2011. The amendments will allow the centre to use the GIDC as a fiscal tool in rationalising gas prices.

The PML-N government is seeking ex post facto approval for the GIDC Act, 2011 as a money bill. The move will provide legal cover to the previous government’s decision to impose the cess, while allowing the new government to keep the money recovered from gas consumers since the cess was imposed on January 1, 2012. Sources say that the collection so far amounts to Rs40 billion.

A court had earlier declared the GIDC illegal and ordered the government to pay back all money recovered from consumers under this head. The Islamabad High Court had declared the GIDC Act, 2011 as ultra vires to the constitution, mainly because it had been promulgated without due approval from the CCI. However, the new government will work its way around that complication and keep charging the cess from consumers by legalising the GIDC and securing an ex post facto approval from the CCI.

The Oil and Gas Regulatory Authority currently is the only authority that can fix gas prices, and the federal government is obliged to follow its decisions in this regard.

The government also plans to take the provinces onboard, seeking an ex post facto approval from them to amend the second schedule of the GIDC Act, as was done through the Finance Act, 2012, in order to provide flexibility to the federal government to revise the rates of the cess subject to a maximum limit.

Published in The Express Tribune, July 3rd, 2013. 

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			<title>Relief for Pakistan: Iran to waive penalty on delay in work</title>
			<link>https://tribune.com.pk/story/564996/gas-pipeline-relief-for-pakistan-iran-to-waive-penalty-on-delay-in-work</link>
			<comments>https://tribune.com.pk/story/564996/gas-pipeline-relief-for-pakistan-iran-to-waive-penalty-on-delay-in-work#comments</comments>
			<pubDate>Tue, 18 Jun 13 19:08:52 +0500</pubDate>
			<dc:creator>
				<![CDATA[our.correspondent]]>
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			<category><![CDATA[Business]]></category><category><![CDATA[World]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=564996</guid>
			<description>
				<![CDATA[Minister hopes pipeline will be laid within the stipulated timeframe.]]>
			</description>
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				<![CDATA[As the Pakistan Muslim League-Nawaz (PML-N) government staves off pressure from the US and friendly Gulf countries and expresses a desire to go ahead with the Iran-Pakistan (IP) gas pipeline project, Tehran has offered Islamabad relief from a penalty which will be incurred if gas flow does not start by December 2014.


In the first official interaction between Iranian Ambassador Alireza Haghighian and new Petroleum Minister Shahid Khaqan Abbasi on Monday, the latter stressed that the IP pipeline was part of the energy plan for Pakistan and the government would pursue the project.

“As regards the construction timeframe, the Iranian government has shown flexibility in the gas sale-purchase agreement, which is highly appreciated,” he said.

“We hope to continue and complete the project within the stipulated time,” a source quoted Abbasi as saying.



According to sources, the gas sale-purchase agreement on the IP pipeline has a ‘take and pay’ clause, which says Pakistan will have to pay a penalty equal to the gas bill for 750 million cubic feet per day (mmcfd), valued at $8 million, if it backs out of the project.

Reiterating the government’s commitment, Abbasi said Pakistan valued the historic relations between the two countries and would strive to improve their ties.

The minister denied that there were any serious issues standing in the way of executing the project, except for a few technical and commercial details that needed to be finalised. He asked the two designated entities of Iran and Pakistan to regularly coordinate with each other for a swift resolution to the outstanding issues.

Emphasising that the IP gas pipeline project was a very important milestone, he suggested that technical teams meet more aggressively and put everything in place within the agreed time.

He said he was aware of the constraints and issues facing the project and was working to resolve them.

The Iranian ambassador, while praising the general elections and the peaceful transition of power to the new government in Pakistan, highlighted the historic and cordial relations between the two countries, especially the new venture for import of natural gas from Iran under the IP pipeline.

Earlier on May 27, Iranian Deputy Minister of Petroleum in International and Commercial Affairs A Khaledi, in a letter to the Pakistan government, had reminded Islamabad that following a government-to-government cooperation agreement, Iran and Pakistan were supposed to nominate entities to commence work on the IP gas pipeline immediately.

“This had already been done by Iran, but it is waiting for action from Pakistan. Since time is too short, your prompt instruction in this regard is highly appreciated,” the letter said.

Published in The Express Tribune, June 19th, 2013.

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			<title>Promising pipeline</title>
			<link>https://tribune.com.pk/story/562798/promising-pipeline</link>
			<comments>https://tribune.com.pk/story/562798/promising-pipeline#comments</comments>
			<pubDate>Thu, 13 Jun 13 17:58:38 +0500</pubDate>
			<dc:creator>
				<![CDATA[editorial]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category><category><![CDATA[Editorial]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=562798</guid>
			<description>
				<![CDATA[PML-N opted to make the country’s energy needs their priority rather than succumbing to the wishes of foreign forces.]]>
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				<![CDATA[The new government’s official announcement on June 12, as part of the Economic Plan for the coming fiscal year, that the Pakistan-Iran gas pipeline will not be scrapped, is welcome. In recent days, following the change in government, there had been much doubt over the future of a project which promises to deliver much needed energy to Pakistan. Reports that PML-N energy experts had found flaws in the project and, of course, the looming issue of the US and Saudi Arabia, disapproval meant that this venture was in some doubt.



However, the clear-cut assurance that the controversial pipeline would be proceeded with marks both maturity and wisdom by the PML-N government. The previous policies of doing away with major projects begun by preceding governments have, over the decades, inflicted a great deal of harm on the country and are, in many ways, responsible for the quandaries we face today in various sectors. The PML-N then needs to be lauded for its good sense. It has also stated that it hopes gas will start flowing into the country by December this year and that the project would move ahead during this fiscal year. This would, of course, be good news for all of us. The PML-N has brought down the cost of the project to $1.25 billion from the previously agreed amount of $1.5 billion. This, too, shows good thinking.

It is assumed that Mian Nawaz Sharif and his team are prepared to deal with the US pressure that will come their way. In a welcome move, they have obviously opted to make the country’s urgent energy needs their priority rather than succumbing to the wishes of foreign forces. Indeed, keeping in mind the energy shortfall, the Turkmenistan-Afghanistan-Pakistan-India gas pipeline project is also being seriously considered. The attention given to the energy sector and the ardent efforts to boost it are to be appreciated. It is good that this need has been put ahead of all other concerns, while devising policies for the future and moving on with initiatives set up for this purpose. We must hope the process continues in the future.

Published in The Express Tribune, June 14th, 2013.

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			<title>Change of heart: Ministry dithers over release of funds for IP pipeline</title>
			<link>https://tribune.com.pk/story/539050/change-of-heart-ministry-dithers-over-release-of-funds-for-ip-pipeline</link>
			<comments>https://tribune.com.pk/story/539050/change-of-heart-ministry-dithers-over-release-of-funds-for-ip-pipeline#comments</comments>
			<pubDate>Mon, 22 Apr 13 18:29:24 +0500</pubDate>
			<dc:creator>
				<![CDATA[zafar.bhutta]]>
			</dc:creator>
			<category><![CDATA[Business]]></category><category><![CDATA[World]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=539050</guid>
			<description>
				<![CDATA[Has collected $400m in infrastructure cess for the project.]]>
			</description>
			<content:encoded>
				<![CDATA[The Ministry of Finance is finding it difficult to set aside millions of dollars collected from gas consumers for the Iran-Pakistan gas pipeline project, as heavy spending by the past government on power subsidies and development projects for political gains has eaten into the resources of the ministry, making its financial standing weak.


The Pakistan Peoples Party (PPP)-led coalition government, which completed its tenure last month, had imposed gas infrastructure development cess on gas consumers to finance the IP pipeline and collected $400 million, sources say.

An assignment account was opened in a bank in the wake of a decision of the cabinet to deposit the cess, but the finance ministry failed to credit the amount into the account because of shortage of funds.

Sources pointed out that initially a cash call of $300 million was made to the ministry to transfer the amount to the assignment account, which would meet the needs up to June this year. However, the ministry did not deposit the cess, instead it insisted that it would release the funds at the time of payments to contractors.

According to estimates, $1 billion will be required before the end of December 2014.



Sources attributed the vulnerable financial position of the finance ministry to hefty power subsidies and excessive spending by the previous government for political gains.

In the current fiscal year, the PPP-led government froze power tariff to avoid the wrath of voters in upcoming elections and doled out Rs268 billion in power subsidies against the target of Rs185 billion.

Former prime minister Raja Pervez Ashraf also spent more than his discretionary fund earmarked in the budget, leaving the finance ministry with little to spend.

According to officials, like the gas infrastructure cess, petroleum development levy, which was imposed to develop the oil sector, was used to bridge the budget deficit.

“The government should have opened an assignment account soon after imposing the gas infrastructure cess to avoid its misuse,” an official suggested, but said Pakistan and Iran had not yet signed the award of pipeline construction contract to Iranian firm Tadbir Energy.

Officials said Pakistan had collected $400 million as cess and $500 million would be provided by Iran for the IP project. China is also expected to lend $500 million.

“If the government secures financing from these sources, it will have enough money to fund the $1.35 billion gas pipeline,” the official said.

As the cabinet has approved the provision of funds, the officials hoped that the cess would be released to meet the needs of the IP project.

“Considering the fact that achieving financial close of the project is necessary and moving ahead on a piecemeal basis is not an option, funds required to kick-start construction activities and the remaining funds should be released by the finance ministry immediately,” said the petroleum ministry.

When approached, the finance ministry spokesman confirmed that funds had so far not been credited to the assignment account. However, he said, “there is no shortage of funds and we are in the process of transferring the money.”

Published in The Express Tribune, April 23rd, 2013.

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			<title>IP pipeline: Iranian diplomat vows timely completion</title>
			<link>https://tribune.com.pk/story/535992/ip-pipeline-iranian-diplomat-vows-timely-completion</link>
			<comments>https://tribune.com.pk/story/535992/ip-pipeline-iranian-diplomat-vows-timely-completion#comments</comments>
			<pubDate>Mon, 15 Apr 13 19:43:22 +0500</pubDate>
			<dc:creator>
				<![CDATA[APP]]>
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			<category><![CDATA[Business]]></category>
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			<description>
				<![CDATA[110 million cubic feet of gas will be available to Pakistan per day under the project, says Darvishvand.]]>
			</description>
			<content:encoded>
				<![CDATA[Despite increasing pressure from the United States, Iranian Consul General Hassan Darvishvand has said that the long awaited Iran-Pakistan (IP) gas pipeline is to be completed “at all costs” by the end of 2014.


Darvishvand said that 110 million cubic feet of gas will be available to Pakistan per day under the project. This, he added, would solve much of the gas shortage in the energy-starved country, The Meher News Agency quoted. He said the pipeline, originating from Iran’s Faras province, would extend over a distance of 1,100 kilometres (km) within Iran, adding that a mere 100 km worth of work is left on the Iranian side of the project.

He said 780 km of pipeline will be laid within Pakistan and construction work began a month ago. The cost of the project in Pakistan was around $1.5 billion, out of which $500 million will be provided by Iran, while the rest of the cost will be met by the host country, he said.

Published in The Express Tribune, April 16th, 2013.

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			<title>Iran will provide $500m for pipeline work</title>
			<link>https://tribune.com.pk/story/530754/iran-will-provide-500m-for-pipeline-work</link>
			<comments>https://tribune.com.pk/story/530754/iran-will-provide-500m-for-pipeline-work#comments</comments>
			<pubDate>Thu, 04 Apr 13 04:04:11 +0500</pubDate>
			<dc:creator>
				<![CDATA[our.correspondent]]>
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			<category><![CDATA[Business]]></category>
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			<description>
				<![CDATA[Ministry denies allegation of kickbacks in award of contract.]]>
			</description>
			<content:encoded>
				<![CDATA[The Ministry of Petroleum and Natural Resources has said Iran will provide $500 million under a state-to-state arrangement for constructing a gas pipeline that will bring Iranian gas to Pakistan.

“No inquiry is being conducted at any level in the government into the award of the construction contract,” the ministry said categorically in a statement issued in response to some news reports.

According to the ministry, Iran has selected Tadbir Energy for construction of the pipeline, after an agreement was reached at the highest level following mutual consultation.

“To allege that $450 million has been received in kickbacks out of a total amount of $500 million is a … bogus claim,” the ministry said, adding that selected entities of the two governments were negotiating the engineering, procurement and construction contract. The contract has not yet been awarded to anyone.



The ministry stressed that the managing director of Interstate Gas Systems, Mobin Saulat, was not appointed immediately after the departure of MD Hassan Nawab. Saulat replaced another managing director who had taken charge after Nawab left.

“Two managing directors had served ISGS prior to Saulat’s appointment, which was made in accordance with the laid-down procedure, rules and regulations,” the ministry added.

Published in The Express Tribune, April 4th, 2013.

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			<title>Gas pipeline: Pakistan, Iran to meet to finalise construction contract</title>
			<link>https://tribune.com.pk/story/530752/gas-pipeline-pakistan-iran-to-meet-to-finalise-construction-contract</link>
			<comments>https://tribune.com.pk/story/530752/gas-pipeline-pakistan-iran-to-meet-to-finalise-construction-contract#comments</comments>
			<pubDate>Wed, 03 Apr 13 21:45:20 +0500</pubDate>
			<dc:creator>
				<![CDATA[zafar.bhutta]]>
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			<description>
				<![CDATA[Iranian team will arrive for talks to be held on April 15 and 16.]]>
			</description>
			<content:encoded>
				<![CDATA[Pakistan and Iran are set to resume talks in mid-April to finalise the award of a multi-million-dollar contract to an Iranian firm for laying a gas pipeline inside Pakistani territory, a process that has already been delayed because of some bottlenecks.


“An Iranian team will arrive in Islamabad on April 15 and 16 to finalise the award of contract to Tadbir Energy of Iran,” a source said.

The contract would have been awarded by the previous government, which completed its tenure on March 16, had the finance ministry approved the term sheet of contract, submitted by Tadbir Energy, and grant of sovereign guarantees on time, sources said.

The ministry gave the approval to the term sheet and sovereign guarantees quite late on March 15.

Pakistan was set to award the construction contract to Tadbir Energy at the time of the official launch of work on the project on the Pak-Iran border, which was inaugurated by President Asif Ali Zardari and Iranian President Mahmoud Ahmadinejad on March 11. However, no agreement was signed.



Earlier, Pakistani officials had held several rounds of negotiations with Tadbir Energy, the firm designated by Iran, for the construction of the pipeline and financing of $500 million offered by Tehran.

The two sides had agreed that the finance ministry would issue sovereign guarantees to Tadbir Energy to cover the construction contract and financing, which was one of the conditions for the engineering, procurement and construction contract.

The cabinet committee gave the go-ahead to the issuance of sovereign guarantees.

“In the final round of negotiations with Tadbir Energy on March 16 and 17 in Tehran, a Pakistani team told the Iranians that the finance ministry had finally approved the term sheet, paving the way for the award of contract,” an official said.

Initial agreement has already been reached with Tadbir Energy, but final accord is awaited. The cabinet has waived Public Procurement Regulatory Authority (PPRA) rules to award the contract directly to the Iranian firm.

Pakistani public sector firm Interstate Gas Systems (ISGS) and Tadbir Energy inked the initial contract in Tehran. Though western governments have imposed sanctions on Iran, Tadbir Energy does not fall within their ambit. It is controlled by the Imam Khomeini Foundation, one of Iran’s largest charitable groups.

Tadbir Energy will undertake all engineering, procurement and construction work on the first phase of the pipeline, starting from the Pak-Iran border, costing around $250 million.

In the second phase, the financing facility will be increased by up to $250 million, depending on discussions regarding the involvement of Tadbir Energy in gas distribution in Pakistan. It will act as the lead contractor along with local subcontractors.

Under the project, Iran will start supplying 750 million cubic feet of gas per day by the end of December 2014, which will be consumed by power plants to generate 4,000 megawatts of electricity.

The engineering and project management consultant, appointed in April 2011, has completed work on bankable feasibility study, interim front-end engineering design and route reconnaissance survey.

Published in The Express Tribune, April 4th, 2013.

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			<title>‘Pak-Iran gas pipeline is a boon for the country’</title>
			<link>https://tribune.com.pk/story/522033/pak-iran-gas-pipeline-is-a-boon-for-the-country</link>
			<comments>https://tribune.com.pk/story/522033/pak-iran-gas-pipeline-is-a-boon-for-the-country#comments</comments>
			<pubDate>Sat, 16 Mar 13 20:41:51 +0500</pubDate>
			<dc:creator>
				<![CDATA[our.correspondent]]>
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			<category><![CDATA[Sindh]]></category>
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			<description>
				<![CDATA[Federal minister for religious affairs defends govt’s decision to go ahead with the project.]]>
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				<![CDATA[Syed Khursheed Ahmed Shah, the federal minister for religious affairs, said on Saturday that he is confident about the government’s move to go ahead with the gas pipeline project with Iran, as this will create new job opportunities. 


He said this at a ceremony organised at a factory in Sukkur to distribute appointment letters to railway workers who had been offered permanent jobs. The government’s agreement last week to build a 1,600 kilometre-long gas pipeline has drawn criticism from the US, which feels that it violates sanctions imposed on Iran’s nuclear activities. Baloch leaders have also castigated the government’s recent decision to hand over the Gwadar port to Chinese companies. But Shah defended both of the moves.

“The founder of Pakistan Peoples Party (PPP), Zulfikar Ali Bhutto, stood up to threats from the international community and made the country a nuclear power. He went to the gallows with his head held high,” said Shah. “Similarly, President Asif Ali Zardari has signed a gas pipeline agreement with Iran and handed the Gwadar Port to a Chinese company despite threats of sanctions by the US.”

Shah added that the projects will create job opportunities for young people and bring prosperity to the country. “Poverty is the root cause of social evils. When everybody becomes prosperous, the crime rate will decrease. In short we are leaving the government amid threats of dire consequences, but we are happy that we have done something positive for the nation.”

Commenting on the completion of the government’s five-year tenure he said, “We have served the masses without any discrimination. The government offered permanent jobs to 11,000 railway workers working on temporary contracts. A total of 35,000 National Commission for Human Development workers and 105,000 lady health workers were also offered permanent jobs.”

Shah added that this was the main difference between dictatorship and democracy. “Dictators deprive people of jobs and legitimate rights, while democracies take care of their basic needs.” He then took a jab at Pakistan Muslim League-Nawaz  (PML-N) chief, Mian Mohammad Nawaz Sharif, saying that only the PPP has stood up to dictators. “If Nawaz is ready to say that heroin, Kalashnikov culture, extremism and terrorism are the gifts of the dictator General Ziaul Haq, then I will accept the PML-N chief as the king of democracy. Sacrificing one’s life for the country and democracy is not easy. Not a single dictator made sacrifices for the country. Only Bhutto did.”

Later, Shah distributed appointment letters to 73 railway workers who had been working on daily contracts for the last 11 years.

Published in The Express Tribune, March 17th, 2013. ]]>
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			<title>Iran-Pakistan gas pipeline: In snub to US, China offers $500m loan</title>
			<link>https://tribune.com.pk/story/520001/iran-pakistan-gas-pipeline-in-snub-to-us-china-offers-500m-loan</link>
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			<pubDate>Wed, 13 Mar 13 00:10:17 +0500</pubDate>
			<dc:creator>
				<![CDATA[zafar.bhutta]]>
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			<category><![CDATA[Pakistan]]></category><category><![CDATA[World]]></category>
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			<description>
				<![CDATA[Chinese, Iranian firms to help with construction.]]>
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				<![CDATA[The United States has made clear its strong stand against the Iran-Pakistan gas pipeline – but the first world power will perhaps be further irritated to hear that China is backing it with a $500 million loan to Pakistan.


“In a major development, China has offered [the] loan,” an official at the Pakistan Embassy in Iran told The Express Tribune. The remaining $500 million would be generated through the Gas Infrastructure Development Cess from gas consumers.

Pakistan had earlier planned to generate the billion dollars through the tax and Iran will be putting in $500 million.

The geopolitical sands appear to be shifting on more than one front as this development comes days after Pakistan handed over to China control of its key Gwadar port in Balochistan.



In one of the boldest snubs of consistent US pressure and warnings, Islamabad and Tehran formally launched the project on Monday in an elaborate groundbreaking ceremony held at the Pakistan-Iran border.

Petroleum ministry officials confirmed that Pakistan is in the middle of procuring compressors and pipelines from a Chinese company and Iranian company Tadbir will do the construction. Pakistani companies such as Sui Northern Pipeline Limited, Sui Southern Gas Company Limited and Frontier Works Organisation would be involved.

The board of directors at the Interstate Gas Systems met March 8 to consider awarding the contract for the pipelines and compressors to Chinese company Panyn Chu King Steel Limited that will provide the pipeline at the rate of $1,650 per tonne, including compressors. The board will be negotiating for discounts with the Chinese firm.

Meanwhile, an Iranian company had quoted the price of $1,980 per tonne. An official said that Iranian contract prices would be turned down because they are higher.

The 1,600-kilometre pipeline, projected to cost a whopping $1.5 billion would enable the export of 21.5 million cubic meters of Iranian natural gas to Pakistan daily. The country hopes to overcome its energy crisis with the 4,000 Megawatts capacity of this project.

&nbsp;

Published in The Express Tribune, March 13th, 2013.]]>
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			<title>Analysis: Iran-Pakistan pipeline a mutually convenient political stunt</title>
			<link>https://tribune.com.pk/story/520003/analysis-a-mutually-convenient-political-stunt</link>
			<comments>https://tribune.com.pk/story/520003/analysis-a-mutually-convenient-political-stunt#comments</comments>
			<pubDate>Tue, 12 Mar 13 22:04:31 +0500</pubDate>
			<dc:creator>
				<![CDATA[farooq.tirmizi]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category><category><![CDATA[Business]]></category><category><![CDATA[World]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=520003</guid>
			<description>
				<![CDATA[Even if everything goes according to plan, Iranian gas will not flow into Pakistan until January 2015.]]>
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				<![CDATA[Every time a project starts off without both parties having spelled out exactly how they plan to pay for it, it is usually a safe bet that the project will not actually go through. The presidents of both Iran and Pakistan have yet to fully answer the question: for a project that is bitterly opposed by the United States, where exactly do they plan to get the money from?


In a report released to clients on Monday, Bank of America Merrill Lynch, a New York-based investment bank, rated the chances of the pipeline project very slim, for reasons largely to do with the politics of the pipeline. The economics of the project itself are relatively sound, which makes it difficult to dismiss outright. Nonetheless, US and European opposition to the project seems an insurmountable obstacle at this point.

“We do not expect this pipeline to go ahead without at least an implicit go-ahead from the US. In the event that the US continues to oppose this pipeline, we do not see the Pakistan government risking sanctions from the US for the pipeline,” stated the report, compiled by Merrill Lynch’s research affiliate in Pakistan, KASB Securities.

So why go through with it? “We reckon this ground breaking could potentially go down as another popularity attempt by the outgoing Pakistan Peoples Party-led administration,” the report said.

Sound economics

The IP pipeline makes perfect commercial sense. Iran is desperate for a way to sell its hydrocarbon resources and Pakistan is starved of energy. The countries are right next door, making the pipeline not unduly expensive to build.

Bank of American Merrill Lynch estimates that the 750 million cubic feet per day (mmcfd) that the country would be importing from Iran would allow an additional 4,123 megawatts of electricity to be generated in Pakistan. The analysts estimate that the gas will go mostly to utilise the 2,232 megawatts of idle thermal power generation capacity, which would use up about 406 mmcfd, leaving 344 mmcfd for other uses, such as manufacturing fertilisers, or even use by domestic consumers.

And while Pakistan would pay Iran $3 billion a year, it would reduce its oil imports by $5.3 billion, resulting in a net annual reduction in energy imports by about $2.3 billion.

In theory, the pipeline can be paid for: of the estimated $1.5 billion cost of the Pakistan section of the pipeline, Tehran says it will provide a 20-year, $500 million loan, with the remaining amount coming from a gas infrastructure development cess (GIDC) to be levied by Islamabad on Pakistani consumers, by an average of about Rs100 per million British thermal units (mmbtu).

The political hurdle

There is, however, the small matter of US opposition to the project, which will render it effectively impossible for either government to find financing for. Despite all the talk of mutual cooperation between Pakistan and Iran, Islamabad has yet to come even close to violating US and European sanctions against Tehran. Pakistani banks refuse to finance any trade transactions between the two countries, resulting in bilateral trade plummeting 57% between 2010 and 2011. And that is before the harshest sanctions kicked in during 2012.

The banks’ recalcitrance has to do with the caution being exercised by the State Bank of Pakistan. Aware that US and UK regulators are threatening to cut off the ability to do business in dollars and pounds for financial institutions that defy the sanctions, the Pakistani central bank has decided to not to take a chance at all with risking the ire of Washington and London.

It is not just the banks, however. Pakistani energy companies have effectively stopped waiting for Iranian gas and have already begun a process to convert many of their oil-fired power plants to coal, as well as setting up new ones. The Hub Power Company, the Karachi Electric Supply Company, and even some of the captive power plants at textile factories in Punjab have effectively decided that it is better to invest in converting their plants to coal than to wait for Iranian gas, which is a politically dicey proposition at best and a mirage at worst.

Even if everything goes according to plan, Iranian gas will not flow into Pakistan until January 2015, by which time, many if not most privately owned oil-fired power plants will have converted to coal, which is marginally more expensive than Iranian gas, but has the virtue of having no political baggage. If its biggest customers have decided that Iranian gas is not worth it, then who does Tehran plan on selling to?

A mutually convenient stunt

Iran is feeling the sting of sanctions far more than most Pakistanis are aware. According to IMF estimates, oil production has dropped 22% to 2.8 million barrels per day. As a result, Standard &amp; Poor’s, the global credit rating agency, estimates that Iran has the highest “breakeven” price of oil – the price at which revenues from its oil would be sufficient to meet its budgetary needs – among the major oil-producing nations in the world.

Tehran needs oil prices to be above $130 per barrel to sustain itself, according to the S&amp;P. And this is even after harsh austerity measures that have seen subsidies slashed mercilessly. However, oil prices are likely to remain stagnant at well below those levels, according to a recent analysis published by Goldman Sachs, a global investment bank. And given increases in Iraqi oil production, the global market would not miss Iranian oil even if it completely stopped flowing.

In short, Iran is desperate for cash, and Pakistani leaders are desperate enough to be seen to be doing something about the energy crisis for both sides to at least stage the ground-breaking ceremony.

(Read: Pipeline priority)

Published in The Express Tribune, March 13th, 2013.]]>
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			<title>Pipeline priority</title>
			<link>https://tribune.com.pk/story/519681/pipeline-priority</link>
			<comments>https://tribune.com.pk/story/519681/pipeline-priority#comments</comments>
			<pubDate>Tue, 12 Mar 13 17:15:29 +0500</pubDate>
			<dc:creator>
				<![CDATA[editorial]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category><category><![CDATA[World]]></category><category><![CDATA[Editorial]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=519681</guid>
			<description>
				<![CDATA[The project, which will cost Pakistan $1.5 billion, must be welcomed wholeheartedly.]]>
			</description>
			<content:encoded>
				<![CDATA[Despite vociferous objections raised by the US, Pakistan and Iran have boldly gone ahead and inaugurated the gas pipeline, which is to bring in much-needed gas from Iran to meet Pakistan’s pressing energy requirements. The pipeline was inaugurated by presidents Asif Ali Zardari and Mahmoud Ahmadinejad at Chabahar on the Pakistan-Iran border, from where the pipeline will cross over into Pakistan. It will then travel 781 kilometres across its territory, bringing in the energy Pakistan so desperately needs to get its factories working again to full capacity, containing the economic crisis that has arisen from the energy shortfall, meeting the needs of domestic users and generally, getting the wheels that run the state whirring once again.

The project, which will cost Pakistan $1.5 billion, must therefore be welcomed wholeheartedly. It could, and should, prove crucial for the future of our country. Indeed, perhaps it should have been put in place sooner given the losses we have suffered in so many forms as a result of the energy shortfall which has continued for years. But even beyond this, there are reasons to celebrate with the two presidents who jointly raised their hands at the inauguration ceremony. The pipeline helps re-establish Pakistan’s sovereignty at a time when it stands badly dented. It also shows that Pakistan is willing to put its own interests ahead of all others, as indeed it should, and stand tall despite the pressures exerted by Washington. For this, the president and the government deserve credit. They have demonstrated that we are capable of putting ourselves first when making decisions.

The signing of the pipeline deal is also important for reasons beyond this. For one, it binds the region closer together — and such regional cooperation is vital for development and for progress in several areas. Islamabad and Tehran have shown that they understand this and as such, the pipeline deal could usher in cooperation in other areas binding nations closer together, thereby making it more possible for them to put the needs of their people at the very top of the priority list.

Published in The Express Tribune, March 13th, 2013.]]>
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			<title>Pak-Iran pipeline to fulfill 40% of Pakistan's energy needs: PM's Adviser</title>
			<link>https://tribune.com.pk/story/519665/pak-iran-pipeline-to-fulfill-40-of-pakistans-energy-needs-pms-advisor</link>
			<comments>https://tribune.com.pk/story/519665/pak-iran-pipeline-to-fulfill-40-of-pakistans-energy-needs-pms-advisor#comments</comments>
			<pubDate>Tue, 12 Mar 13 14:50:09 +0500</pubDate>
			<dc:creator>
				<![CDATA[]]>
			</dc:creator>
			<category><![CDATA[World]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=519665</guid>
			<description>
				<![CDATA[$1.3 billion project will be completed within 15 months says Mirza Ikhtiar Baig.]]>
			</description>
			<content:encoded>
				<![CDATA[Adviser to the Prime Minister Dr Mirza Ikhtiar Baig has said that the Pak-Iran gas pipeline would fulfill about 40% of Pakistan’s energy needs.

Baig, while talking to PTV on Tuesday, said the gas pipeline agreement between Pakistan and Iran was a milestone in the history of both nations, as it was the first step towards regional cooperation and economic integration.

He added that the pipeline would be completed at a cost of $1.3 billion within 15 months. The pipeline's funding would come from a range of sources.

He added that Iran would also establish an oil refinery in Gwadar to develop the coastal city and open the border between the two neighbouring countries to enhance trade.

Baig further said that President Asif Ali Zardari was interested in trade and economic ties with regional countries. He said that the Gwadar Port’s operational handover to a Chinese firm will promote Pakistan's trade and economic relations with Central Asian countries.]]>
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			<title>Going ahead with Pakistan-Iran pipeline will trigger sanctions: US</title>
			<link>https://tribune.com.pk/story/519577/going-ahead-with-pakistan-iran-pipeline-will-trigger-sanctions-us</link>
			<comments>https://tribune.com.pk/story/519577/going-ahead-with-pakistan-iran-pipeline-will-trigger-sanctions-us#comments</comments>
			<pubDate>Tue, 12 Mar 13 08:31:06 +0500</pubDate>
			<dc:creator>
				<![CDATA[afp]]>
			</dc:creator>
			<category><![CDATA[World]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=519577</guid>
			<description>
				<![CDATA[We've heard this pipeline announced about 10 or 15 times; we have to see what actually happens: State Department]]>
			</description>
			<content:encoded>
				<![CDATA[Pakistan risks sparking US sanctions if it pursues its plans with Iran to build a $7.5 billion gas pipeline linking the two nations, a senior US official said in a renewed warning Monday.

"We have serious concerns, if this project actually goes forward, that the Iran Sanctions Act would be triggered," State Department spokesperson Victoria Nuland said. "We've been straight up with Pakistan about these concerns."

Iranian President Mahmoud Ahmadinejad launched the construction of a much-delayed section of the gas pipeline with his Pakistani counterpart Asif Ali Zardari at a ceremony on the border of the two neighbours.

But Nuland added: "We've heard this pipeline announced about 10 or 15 times before in the past. So we have to see what actually happens."

The United States had been seeking alternative plans, saying the move with Iran would take it "in the wrong direction right at a time that we're trying to work with Pakistan on better, more reliable ways to meet its energy needs."

Nuland said the US was "supporting large-scale energy projects in Pakistan that will add some 900 megawatts to the power grid by the end of 2013."

Those projects included renovating the power plants at Tarbela, the Mangla Dam, as well as modernizing others plants and building new dams at Satpara and Gomal Zam, she added.

&nbsp;]]>
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			<title>Snub to US threats: Landmark moment</title>
			<link>https://tribune.com.pk/story/519495/snub-to-us-threats-landmark-moment</link>
			<comments>https://tribune.com.pk/story/519495/snub-to-us-threats-landmark-moment#comments</comments>
			<pubDate>Mon, 11 Mar 13 21:42:50 +0500</pubDate>
			<dc:creator>
				<![CDATA[zafar.bhutta]]>
			</dc:creator>
			<category><![CDATA[World]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=519495</guid>
			<description>
				<![CDATA[Zardari, Ahmadinejad launch Iran-Pakistan gas pipeline project.]]>
			</description>
			<content:encoded>
				<![CDATA[In one of the boldest moves snubbing consistent US pressure and threats, Islamabad and Tehran formally launched the Iran-Pakistan (IP) gas pipeline project with a resounding message for the world: do not define for us, we have our own definitions.


Addressing the inauguration and groundbreaking ceremony held at Gabd Zero Point on the Pak-Iran border, President Asif Ali Zardari said, “The IP gas pipeline project is a lifeline for Pakistan and it will bring prosperity in the region. Let us contribute towards prosperity and interdependence among neighbours through mutual cooperation.”

Iranian President Mahmoud Ahmadinejad said, “Iran is facing significant pressure regarding its nuclear programme. However, the IP gas pipeline project has nothing to do with our nuclear programme.”

He pledged that the IP gas pipeline project would bring peace in the region and therefore it should not be derailed.

Present at the ceremony were many prominent representatives of different countries including a 300-member strong Pakistani delegation led by President Zardari and comprising the country’s foreign minister, petroleum minister and National Assembly speaker and a number of prominent politicians.



“Islamabad faces immense challenges but the world does not understand our problems. They mean well of us but they don’t know how to help us. Hence we have to build ourselves,” said President Zardari.

“Do not put us into different definitions. We know our definition in the world”

Despite consistent US pressure and threats of sanctions, different countries including Oman, United Arab Emirates (UAE), Afghanistan and Turkmenistan extended diplomatic support to the IP project with their representatives present at the launch ceremony.

The 1,600-kilometre pipeline, projected to cost around a whopping $1.2-1.5 billion, would enable the export of 21.5 million cubic meters of Iranian natural gas to Pakistan on a daily basis.

Though this project has been inaugurated, it may face a bottleneck in the future if Pakistan Muslim League (PML-N) comes into power. The federal government had invited Punjab Chief Minister Shahbaz Sharif to attend the launching ceremony but he did not participate in the event, raising various questions regarding the fate of the project.

Although Pakistan and Iran were set to sign the Memorandum of Understanding (MoU) to inaugurate an oil refinery at the Gwader Port costing of $4 billion, no signing took place during the IP inauguration ceremony due to unknown reasons.

President Zardari maintained that detractors believed that democracy would not last in Pakistan but it did and “we gave five years to democracy”.

“Each region is trading with the other region and we have to trade with Iran,” Zardari said, as if responding pre-emptively to the US. “Our relations might get warm and cold but we cannot change our geographical location.”

Meanwhile, the Iranian president said that negative propaganda was launched against this project. “We will complete it soon and gas flow will start to Pakistan,” he vowed. He maintained that Pakistan and Iran had immense potential to trade.

He said there should be regional cooperation between different countries to bolster mutual cooperation and prosperity in the region.

Advisor to Prime Minister on Petroleum and Natural Resources Dr Asim Hussain said that the launching of the IP gas pipeline project was a turning point in the relations of the two countries. “This project will boost growth by 5%,” Hussain said adding that it would create over 10,000 jobs.

US expresses concerns 

US State Department spokesperson Victoria Nuland has reiterated Washington’s stance on the IP pipeline saying they had serious concerns about the project.

“We have serious concerns if this project actually goes forward; the Iran Sanctions Act would be triggered. We have been straightforward with Pakistan on this,” said the spokesperson.

Published in The Express Tribune, March 12th, 2013.]]>
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			<title>US maintains 'serious concerns' over Pak-Iran gas pipeline</title>
			<link>https://tribune.com.pk/story/519262/us-maintains-serious-concerns-over-pak-iran-gas-pipeline</link>
			<comments>https://tribune.com.pk/story/519262/us-maintains-serious-concerns-over-pak-iran-gas-pipeline#comments</comments>
			<pubDate>Mon, 11 Mar 13 17:53:37 +0500</pubDate>
			<dc:creator>
				<![CDATA[huma.imtiaz]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=519262</guid>
			<description>
				<![CDATA[If this project goes forward, Iran Sanctions Act will be triggered, says US State Dept spokesperson.]]>
			</description>
			<content:encoded>
				<![CDATA[US State Department spokesperson Victoria Nuland reiterated the US' stance on the Pak-Iran gas pipeline, saying they had serious concerns about the project that was formally inaugurated today.

"We have serious concerns if this project actually goes forward; the Iran Sanctions Act would be triggered. We have been straightforward with Pakistan on this," said the spokesperson.

"We have also been working on alternative projects. We've heard this pipeline announced 10-15 times before in the past. If this project goes forward we have serious concerns that sanctions will be triggered."

Nuland said if the project went forward, it would take Pakistan in the wrong direction.

President Asif Ali Zardari along with Iranian President Mahmoud Ahmedinejad inaugurated the multi-billion dollar pipeline in Chahbahar on Monday.

The contentious gas pipeline was inaugurated by Zardari as he pulled the rope to reveal the foundation-laying plaque on the Pak-Iran border for the 1,600 kilometre long pipeline.

The US has issued warnings to invoke economic sanctions already in place against Iran if Pakistan went ahead with its plans to import natural gas from the Islamic republic.

The United States has steadfastly opposed Pakistani and Indian involvement, saying the project could violate sanctions imposed on Iran over nuclear activities that Washington suspects are aimed at developing a weapons capability. Iran denies this.]]>
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			<title>Pak-Iran pipeline: KSE-100 index plumbs 441 points fearing sanctions</title>
			<link>https://tribune.com.pk/story/519117/anticipating-trouble-kse-100-index-falls-441-points-over-pak-iran-pipeline</link>
			<comments>https://tribune.com.pk/story/519117/anticipating-trouble-kse-100-index-falls-441-points-over-pak-iran-pipeline#comments</comments>
			<pubDate>Mon, 11 Mar 13 12:51:47 +0500</pubDate>
			<dc:creator>
				<![CDATA[afp]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=519117</guid>
			<description>
				<![CDATA[Stocks slumped by almost 2.5% as market experienced a panic-like situation over the pipeline, impending US reaction.]]>
			</description>
			<content:encoded>
				<![CDATA[Pakistan stocks slumped almost 2.5 percent on Monday on fears of possible US sanctions following the ground-breaking ceremony of a much-delayed $7.5 billion gas pipeline from Iran, traders said.

The Karachi Stock Exchange's benchmark KSE-100 index shed 441.62 points, or 2.46 percent, to close at 17,522.56 with 173.03 million shares traded.

"There was a panic-like situation in the market as investors fear United States may impose economic sanctions on Pakistan because of the gas pipeline," analyst Mohammad Sohail of Topline Securities told AFP.

"The market experienced turmoil all the day, it never recovered till it suspended trading."

A consortium is to start work today on the gas pipeline despite American warnings of possible sanctions.

Pakistani President Asif Ali Zardari held talks last month in Tehran with Iranian counterpart Mahmoud Ahmadinejad and supreme leader Ayatollah Ali Khamenei, who urged Islamabad to press ahead with the project.

Zardari's spokesperson said the world should realise the project was being commissioned "purely to meet economic needs of the country".

Pakistani analysts said a statement from the US State Department was expected later in the evening, which could determine the future course of the market.

"The market's future trends depend on what the US State Department says in its next statement about the gas pipeline," Sohail said.]]>
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			<title>High pressure: President inaugurates historic Pak-Iran gas pipeline</title>
			<link>https://tribune.com.pk/story/519089/president-inaugurates-historic-gas-pipeline</link>
			<comments>https://tribune.com.pk/story/519089/president-inaugurates-historic-gas-pipeline#comments</comments>
			<pubDate>Mon, 11 Mar 13 09:54:44 +0500</pubDate>
			<dc:creator>
				<![CDATA[reuters]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=519089</guid>
			<description>
				<![CDATA[Despite US pressure, foundation laying ceremony for the multi-billion dollar pipeline carried out on Pak-Iran border.]]>
			</description>
			<content:encoded>
				<![CDATA[President Asif Ali Zardari along with Iranian President Mahmoud Ahmedinejad inaugurated the multi-billion dollar Pak-Iran gas pipeline in Chahbahar on Monday, reported Express News. 

The contentious gas pipeline was inaugurated by Zardari as he pulled the rope to reveal the foundation-laying plaque on the Pak-Iran border for the 1,600 kilometre long pipeline.

A 300-member strong Pakistani delegation led by President Zardari and comprising the country’s foreign minister, petroleum minister and National Assembly speaker and a number of prominent politicians attended the historic ceremony.

Foreign ministry spokesperson Moazzam Ali Khan said several heads of states had also been invited at the inauguration — an event that will see the two neighbouring states sign a crucial yet controversial mega project aimed at easing Pakistan’s energy crisis. However, he refused to give any further details.

One official pointed out that the high-powered inauguration clearly indicated that Pakistan would pursue the project at all costs.

Iran has completed 900 km (560 miles) of pipeline on its side of the border and Iranian contractors will also construct the pipeline in Pakistan, Iran's national broadcasting network IRIB reported.

Tehran has agreed to lend Islamabad $500 million, or a third of the estimated $1.5 billion cost of the 750 km Pakistani section of the pipeline, Fars news agency reported.

The two sides hope the pipeline will be complete in time to start delivery of 21.5 million cubic metres of gas per day to Pakistan by December 2014.

The US has issued warnings to invoke economic sanctions already in place against Iran if Pakistan went ahead with its plans to import natural gas from the Islamic republic.

The United States has steadfastly opposed Pakistani and Indian involvement, saying the project could violate sanctions imposed on Iran over nuclear activities that Washington suspects are aimed at developing a weapons capability. Iran denies this.

India quit the project in 2009, citing costs and security issues, a year after it signed a nuclear deal with Washington.

You can view a slideshow of the inauguration ceremony here.]]>
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			<title>Deal on: Pakistan, Iran to launch gas pipeline project today</title>
			<link>https://tribune.com.pk/story/518977/deal-on-pakistan-iran-to-launch-gas-pipeline-project-today</link>
			<comments>https://tribune.com.pk/story/518977/deal-on-pakistan-iran-to-launch-gas-pipeline-project-today#comments</comments>
			<pubDate>Sun, 10 Mar 13 22:53:15 +0500</pubDate>
			<dc:creator>
				<![CDATA[kamran.yousaf]]>
			</dc:creator>
			<category><![CDATA[World]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=518977</guid>
			<description>
				<![CDATA[A 300-member strong Pakistani delegation led by President Zardari will attend the historic ceremony.]]>
			</description>
			<content:encoded>
				<![CDATA[In what appears to be a bold step and a clear snub to the United States, Islamabad and Tehran are all set to formally launch the multibillion dollar Iran-Pakistan (IP) gas pipeline project today (Monday).


The gas pipeline will be inaugurated by President Asif Ali Zardari and his Iranian counterpart Mahmoud Ahmadinejad at the Pakistan-Iran border, a foreign ministry official revealed on Sunday.

A 300-member strong Pakistani delegation led by President Zardari and comprising the country’s foreign minister, petroleum minister and National Assembly speaker and a number of prominent politicians will attend the historic ceremony.

Foreign ministry spokesperson Moazzam Ali Khan said several heads of states were also invited at the inauguration — an event that will see the two Muslim states sign a crucial yet controversial mega project aimed at easing Pakistan’s energy crisis. However, he refused to give any further details.



One official pointed out that the high-powered inauguration clearly indicated that Pakistan would pursue the project at all costs.

The US has publicly threatened to invoke economi  sanctions already in place against Iran if Pakistan went ahead with its plans to import natural gas from the Islamic republic.

But Pakistan has rejected such threats insisting that its plan to import national gas from Iran is vital to meet the country’s growing energy shortages.

“There is complete consensus among the stakeholders that Pakistan must not abandon the IP gas pipeline project,” the official said.

Asking not to be named, the official maintained that it was not possible for Pakistan to pull out of the project at the behest of the US.

“While the US is not willing to give us civilian nuclear technology, they expect us to stay away from the Iran gas pipeline. This is not possible,” he argued.

The official was of the view that although Washington was assisting Pakistan in a number of energy projects, but those could not be a substitute to the option Iran was offering.

It appears that not only Washington but also certain Arab countries including Saudi Arabia are believed to be concerned about Pakistan’s plans with Iran.

In an effort to pacify their concerns, Foreign Minister Hina Rabani Khar held crucial meetings with envoys of Saudi Arabia, Qatar and the United Arab Emirates (UAE) over the last few days.

Sources said Khar’s interaction with key Arab ambassadors was meant to allay their fears and convey a message that the crippling energy crisis has compelled Pakistan to pursue the crucial pipeline.

Khar also recently travelled to Doha in a bid to assure the Qatari authorities that Pakistan’s energy cooperation with Qatar would not be affected due to the IP gas pipeline project.

Discussions between Pakistan and Iran to lay a gas pipeline first began in 1994. The two neighbours signed the initial agreement back in 1999.

The 1,600-kilometre pipeline, projected to cost around a whopping $1.2-1.5 billion, would enable the export of 21.5 million cubic meters of Iranian natural gas to Pakistan on a daily basis.

Iran has already constructed more than 900 kilometres of the pipeline on its soil.

Tehran-based Tadbir Energy Development Group will reportedly undertake all engineering procurement and construction work for the first segment of the project, which starts from the Iran-Pakistan border and costs around $250 million.

The Iranian firm will also carry out the second segment of the project, and extend the financing later to $500 million.

The remaining amount is expected to be generated through Pakistan’s Gas Infrastructure Development Cess.

Published in The Express Tribune, March 11th, 2013.]]>
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			<title>In the pipeline</title>
			<link>https://tribune.com.pk/story/501112/in-the-pipeline</link>
			<comments>https://tribune.com.pk/story/501112/in-the-pipeline#comments</comments>
			<pubDate>Fri, 01 Feb 13 07:05:01 +0500</pubDate>
			<dc:creator>
				<![CDATA[editorial]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category><category><![CDATA[Editorial]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=501112</guid>
			<description>
				<![CDATA[In theory pipeline makes excellent sense, in reality it raises questions as far as matter of Pakistan-US ties goes.]]>
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				<![CDATA[In what will be one of its last meetings, the federal cabinet has opted to go in for the long discussed Iran-Pakistan gas pipeline, a multibillion-dollar project under which gas would be piped in from Iran into Pakistan. This venture, as Information Minister Qamar Zaman Kaira emphasised while speaking on the cabinet meeting, would help Pakistan overcome a drastic shortfall in its energy needs, thereby giving a much needed boost to the industrial sector in the country. In the past months, the issue of the need for the pipeline has been raised many times at various forums.

But, things are not quite as simple as they seem. While in theory, the pipeline makes excellent sense, in reality it raises questions as far as the matter of Pakistan-US ties goes. The US, which of course sees Iran as an enemy, has consistently opposed the project with Secretary of State Hilary Clinton describing it as ‘inexplicable’. From Pakistan’s point of view it is entirely explicable. Following the most recent cabinet meeting, US Ambassador to Pakistan Richard Olson has also, once more, expressed reservations over the venture. But of course, while in practical terms we need the US as an ally, Pakistan must also safeguard its own interests.

The pipeline from Iran could help it in many ways, and this should be a primary concern. Skilful diplomacy is needed and the months ahead will show the degree to which this is successfully exercised by Pakistan, which has only recently succeeded in repairing ties with Washington and easing some of the strains that had crept in through 2012.

We must ask also why this decision has been taken so late in the day. The matter is a delicate one; the present government has no time left to deal with it, and this raises the issue of whether it may not have been wiser and fairer at this stage to leave the question for the incoming government to settle, so that it could work out its strategy and determine how to tackle Washington while retaining our rights as a sovereign nation, determined to do the best for its people.

Published in The Express Tribune, February 1st, 2013.]]>
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			<title>Gas pipeline prospects</title>
			<link>https://tribune.com.pk/story/471172/gas-pipeline-prospects</link>
			<comments>https://tribune.com.pk/story/471172/gas-pipeline-prospects#comments</comments>
			<pubDate>Mon, 26 Nov 12 19:53:38 +0500</pubDate>
			<dc:creator>
				<![CDATA[editorial]]>
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			<description>
				<![CDATA[It is curious big-seller Iran &amp;amp; big-buyer India are both worried about Pakistan to build pipeline &amp;amp; protect it.]]>
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				<![CDATA[Iranian President Mahmoud Ahmadinejad says Iran will help Pakistan build its side of the gas pipeline, both in terms of finance and technological know-how, through a joint venture with Iranian companies and local gas utilities including Sui Northern Gas Pipelines and Sui Southern Gas Company. It is said that the pipeline alone will cost $1.2 billion while the entire Iran-Pakistan (IP) project is worth an escalated $7.2 billion. From the Iranian side, the offer carries a ballast of global politics: Iran says it will loan the $500 million if Pakistan pledges not to buckle under American pressure.

Neither Iran nor Pakistan are completely reliable when it comes to making pledges, Iran being hampered by internal political bickering and Pakistan rendered helpless by internal disorder and lawlessness, especially in the region that the pipeline would pass through. To begin with, India was part of the deal for Iranian gas: in fact, Iran was aiming to sell to the biggest buyer in South Asia, not so much Pakistan. India did not have a very good record of dealing with the ever-changing policies in Tehran but it has discovered that its alternative, the Turkmen-Afghanistan-Pakistan-India pipeline (TAPI), backed by America, is equally uncertain.

Therefore, in May 2010, New Delhi approached Tehran to resume talks but reiterated its issues with Pakistan, demanding safeguards within the contract to ensure the gas reached India. In 2011, Iran’s nuclear activities triggered a fresh round of sanctions but India and Pakistan have showed no signs of backing down. There is another aspect to the pipeline politics that is worth looking at: Pakistan has helped bring in China as the big buyer that Iran needs at the other end of the pipeline. After hitting Pakistan along the Mekran coast, the pipeline will go northwards and into Chinese Xinjiang. China may be wary of offending its largest trading partner America by coming out openly as a financier of IP but it can help in many other ways. In the end, India and China may both want a share of the Iranian gas; and that may have softened some opposition in Tehran to the entire project.



Sanctions scare states most able to dish out money and technology. China has stayed away; Russia came in tentatively, then backed off when a ‘realist’ faction in Moscow reassessed the damage Russia will have to sustain from sanctions imposed jointly by the EU and America. Pakistan has already been threatened with sanctions by US Secretary of State Hillary Clinton. Some articles of the India-American nuclear agreement mention conditionalities attached to India’s relationship with Iran but India is far better placed than China and Russia to resist the pressure, go along with Pakistan and get the gas from Iran. Both Pakistan and India, in dire need of energy together with Bangladesh, are increasingly sceptical of ever getting the America-backed TAPI pipeline.

If TAPI is at risk from disorder from the two transit states — Afghanistan and Pakistan — IP is threatened by Pakistan’s fast-eroding internal sovereignty. The pipeline project has already been shifted to the Mekran coast in Balochistan from Khuzdar where no one is safe after journalists have been killed and police officials have been forced to desert. It is almost certain that along the Mekran coast, too, the pipeline will come under attack from Baloch insurgents whose most virulent variety, in fact, comes from the southern part of the province. Over the years, they have developed expertise in blowing up gas pipelines. How Pakistan will react to sanctions by the US and the EU is uncertain as is the response from China after they are imposed.

Yet, Pakistan must remain steadfast in getting the Iranian gas. It will change the way Iran thinks about the region to its eastward side after it becomes more engaged economically with South Asia. On the other hand, this gas will be a factor of integration of the economies of South Asia, destined to seek piped energy from Iran and Central Asia. It is curious that the big-seller Iran and the big-buyer India are both worried about the capacity of Pakistan to build the pipeline and protect it against terrorist attacks after it has been built.

Published in The Express Tribune, November 27th, 2012.

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			<title>Relentless resolve: Iran vows gas pipeline by 2014</title>
			<link>https://tribune.com.pk/story/470027/relentless-resolve-iran-vows-gas-pipeline-by-2014</link>
			<comments>https://tribune.com.pk/story/470027/relentless-resolve-iran-vows-gas-pipeline-by-2014#comments</comments>
			<pubDate>Fri, 23 Nov 12 03:51:41 +0500</pubDate>
			<dc:creator>
				<![CDATA[news.desk]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category><category><![CDATA[World]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=470027</guid>
			<description>
				<![CDATA['We want to complete this project by 2014,' Ahmadinejad told a press conference in Islamabad.]]>
			</description>
			<content:encoded>
				<![CDATA[Iranian President Mahmoud Ahmadinejad on Thursday vowed to complete a multi-billion dollar gas pipeline to Pakistan on time, downplaying financial woes and US pressure to scrap the project.

Pakistan and Iran signed a deal in 2010 under which Tehran would supply gas from 2014, with sales to reach up to one billion cubic feet per day by mid-2015.

The project envisaged a pipeline, 900 kilometres in length built from Assaluyeh in southern Iran to the border with Pakistan.

Another 800 kilometres pipeline was also needed inside Pakistan to receive gas from Iran’s South Pars field in the Gulf.

“We want to complete this project by 2014,” Ahmadinejad told a press conference in Islamabad.

Published in The Express Tribune, November 23rd, 2012.]]>
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			<title>IP gas pipeline: Russia to know next week if they are in or out</title>
			<link>https://tribune.com.pk/story/432116/ip-gas-pipelinel-russia-to-know-next-week-if-they-are-in-or-out</link>
			<comments>https://tribune.com.pk/story/432116/ip-gas-pipelinel-russia-to-know-next-week-if-they-are-in-or-out#comments</comments>
			<pubDate>Thu, 06 Sep 12 01:52:09 +0500</pubDate>
			<dc:creator>
				<![CDATA[zafar.bhutta]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=432116</guid>
			<description>
				<![CDATA[Countr­ies to conduc­t final round of talks on gas supply from Iran.]]>
			</description>
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				<![CDATA[Pakistan and Russia are going in for final rounds of negotiations next week to decide whether energy giant Gazprom will participate in the project or not amid sanctions imposed by the US on Iran.

“If there is a breakthrough, Pakistan and Russia could sign a deal to award IP gas pipeline project to Russian energy giant Gazprom during the upcoming visit of Russia President Vladimir Putin to Pakistan next month,” a source said.

Russia Minister for Sports and Tourism Vitaly Mutko will chair the inter-governmental commission (IGC) meeting on Monday next week in Islamabad to negotiate deals to award contracts like IP and TAPI gas pipeline projects, CASA 1,000MW power import project and expansion of Pakistan Steel Mills.

“The delay in striking deals between Pakistan and Russia on IP gas pipeline project is due to international complications relating to Iran,” a source said adding that Russia is still interested in IP gas pipeline project despite opposition of US.

The Pakistani government had submitted detailed engineering design of IP gas pipeline project during a meeting of Pak-Russia joint Working Group Meeting held in last week of June.

Under the energy cooperation programme, Pakistan wants to award the contract of IP gas pipeline without bidding as it is facing financial difficulty in raising finance due to sanctions imposed on Iran. Russia has also offered financing for the transnational Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project.

At present, Pakistan is negotiating the construction of IP gas pipeline with three countries – Iran, China and Russia. China has not still responded to the offer while talks are on going with Iran.

“We will award the IP contract to the country which first extends finance for constructing the pipeline,” the official said.

Power projects

In the working group meeting, the Russian authorities offered $500 million for the Central Asia South Asia (CASA) electricity import project, which would bring electricity from Central Asian states. During the IGC meeting, the two sides would finalise modalities of the agreement.

Under the project floated in 2006, 1,000 to 1,300 megawatts of surplus electricity will be imported from Tajikistan and Kyrgyzstan. “US, World Bank and Islamic Development Bank (IDB) have also backed the project,” an official said.

Moscow has also agreed to finance rehabilitation of Guddu and Muzaffargarh power plants and a deal would be discussed during talks.

Pakistan Steel Mills expansion project

In addition to this, the two sides would discuss a deal for expansion of financially troubled Pakistan Steel Mills. They two countries last month had discussed ways of enhancing the capacity of steel mills with promise of Russian support.

Under the programme, the mill’s production capacity will be enhanced to 1.5 million tons per annum from existing 1.1 million tons. Initial cost of the project is estimated at Rs30.45 billion, though actual cost will be determined after a technical audit of the plant by a Russian company.

Published in The Express Tribune, September 6th, 2012.]]>
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			<title>Gas pipeline: Pakistan, Iran to discuss IP project progress today</title>
			<link>https://tribune.com.pk/story/426710/gas-pipeline-pakistan-iran-to-discuss-ip-project-progress-today</link>
			<comments>https://tribune.com.pk/story/426710/gas-pipeline-pakistan-iran-to-discuss-ip-project-progress-today#comments</comments>
			<pubDate>Mon, 27 Aug 12 04:17:35 +0500</pubDate>
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			<category><![CDATA[Pakistan]]></category><category><![CDATA[Business]]></category>
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			<description>
				<![CDATA[Technical, legal and financial experts to take part in the two-day meeting.]]>
			</description>
			<content:encoded>
				<![CDATA[In an apparent bid to expedite work on the Iran-Pakistan (IP) gas pipeline project, a group meeting of the two sides will be held today (Monday) to review the progress on the project.

A special Iranian team would participate in the two-day coordination meeting on the IP gas pipeline project that would commence in the federal capital. The joint working group comprises experts from technical, legal, financial and commercial sectors who will work out details with respect to the implementation of the mega project.

Sources said that these negotiations were crucial because if both sides were to reach an agreement during these talks, Iran would also offer to provide material for the project. Earlier, Iran committed to providing $250 million for the project through its commercial banks.

Engineering design of the project has been completed by a German firm who has given an estimated cost of the project. However, sources informed that this cost may also be reduced if local companies were encouraged to participate in the project.

The IP project would facilitate the import of 700 mmcfd gas every day through 2,100 km of pipeline and is expected to help curb the current energy crisis in the country.

Published in The Express Tribune, August 27th, 2012.]]>
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			<title>IP gas project: Who will finance Pakistan’s side of pipeline?</title>
			<link>https://tribune.com.pk/story/425793/ip-gas-project-who-will-finance-pakistan%e2%80%99s-side-of-pipeline</link>
			<comments>https://tribune.com.pk/story/425793/ip-gas-project-who-will-finance-pakistan%e2%80%99s-side-of-pipeline#comments</comments>
			<pubDate>Fri, 24 Aug 12 20:28:29 +0500</pubDate>
			<dc:creator>
				<![CDATA[zafar.bhutta]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=425793</guid>
			<description>
				<![CDATA[Pakistan and Iran to meet next month to finalise deal on laying Pakistan’s portion.]]>
			</description>
			<content:encoded>
				<![CDATA[As Russia and China have not given confirmed financing the IP gas pipeline project, Pakistan and Iran will resume talks in the first week of September to finalise the arrangement of finance to lay Pakistan’s side of the pipeline.


Russia and China are conducting due diligence of the project although there has been no response so far, said an official.

Pakistan will also urge the Iranian team to double its pledged amount to $500 million during the upcoming meeting of the working group on IP gas pipeline project. “Iran has already committed to raise $250 million financing for the gas pipeline project through its commercial banks,” sources said.

The project is expected to facilitate the import of 700 million cubic feet of gas every day through the 2,100 kilometre pipeline which will ease the current energy crisis in Pakistan.

Iran-Pakistan gas pipeline is expected to reach the zero border point in the first half of next Iranian calendar year beginning 20 March 2013. National Iranian Gas Company (NIGC) Managing Director, Javad Oji in a recent statement, said that work on the 56-inch Seventh Iran’s Gas Trunkline from Iranshahr, southeast of Iran to Pakistan border and Zahedan city is complete and it is expected to come on stream in September 2013.

Coordination committee to meet on Monday

In another group meeting, a special Iranian team will participate in the two-day coordination committee meeting on the IP gas pipeline project scheduled to meet in Islamabad on Monday to review progress of the project.

Pakistan and Iran had formed the joint working body to finalise a deal with the latter to lay Pakistan’s portion of the pipeline during a meeting held in Islamabad on July 17 and 18.

The Joint Working Group comprised experts from technical, legal, financial and commercial sectors to work out details with respect to implementation of the Iran-Pakistan gas pipeline project.

“This group will also examine the impact of US sanctions against Iran on IP gas pipeline project,” sources added. State-owned National Bank of Pakistan (NBP) and Oil and Gas Development Company Limited (OGDC) walked away from the project last year fearing US sanctions. In March this year, the world’s largest bank Industrial and Commercial Bank of China Limited (ICBC) after agreeing to finance Pakistan’s side of the pipeline also shied away.

“If the two countries reach an agreement, Iran would also provide material for the pipeline,” source added.

German based firm ILF has completed detailed engineering design of IP gas pipeline project and according to the interim feasibility report, the cost of the project is between $1.2 and $1.5 billion.

“If the project is materialised with the participation of local companies, the cost of the project fall while the cost would go up if foreign companies complete the project. Sources also hinted that local and Iranian companies could wrap up the project.

Published in The Express Tribune, August 25th, 2012.]]>
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			<title>Putin coming in Sept: Pakistan, Russia likely to strike deals for energy projects</title>
			<link>https://tribune.com.pk/story/412556/putin-coming-in-sept-pakistan-russia-likely-to-strike-deals-for-energy-projects</link>
			<comments>https://tribune.com.pk/story/412556/putin-coming-in-sept-pakistan-russia-likely-to-strike-deals-for-energy-projects#comments</comments>
			<pubDate>Tue, 24 Jul 12 20:11:23 +0500</pubDate>
			<dc:creator>
				<![CDATA[zafar.bhutta]]>
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			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=412556</guid>
			<description>
				<![CDATA[Russian companies may announce investment in oil, gas, mineral exploration.]]>
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				<![CDATA[Pakistan and Russia are likely to strike deals for financial and technical assistance for electricity and gas supply projects as well as expansion of steel mill during the visit of Russian President Vladimir Putin to Pakistan in September this year.


The visit of the Russian head of state is a follow-up to the Pak-Russia joint working group meeting held in the last week of June in Islamabad.

During Putin’s trip, the two countries are expected to sign a memorandum of understanding to push ahead with assistance for the power and gas supply projects. Representatives of Russian companies are also likely to accompany the president, who may announce investment in oil, gas and mineral exploration in Pakistan, officials say.

Under the energy cooperation programme, Pakistan has shown willingness to award a contract without bidding for the multi-billion-dollar Iran-Pakistan gas pipeline. Russia has also offered financing for the transnational Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project.

The government desires to strike gas project contracts on government-to-government basis only, with no role for private Russian firms. The cabinet may be asked to waive public procurement rules for the award of pipeline contracts to Russia.

The government has already floated tenders, inviting bids for construction and procurement of pipeline for the IP project, costing $1.5 billion. According to the tender terms, the firms that promise financing will get additional points.

“Russian energy giant Gazprom may also participate in the bidding with a pledge of financing,” a government official said.

At present, Pakistan is negotiating the construction of IP gas pipeline with three countries – Iran, China and Russia.

“We will award IP contract to the country which first extends financing for constructing the pipeline, staving off pressure from the United States,” the official said.

Iran has also come up with a plan to lay Pakistan’s portion of the pipeline based on a mechanism called ‘supplier’s credit’. According to the plan, Tehran will provide the pipeline and compressors on credit to Pakistan, which will make payments after two years.

Iran is also willing to provide $250 million on government-to-government basis and can extend a major part of financing from its commercial banks. Pakistan needs around $500 million to finance the pipeline.

Power, steel mill projects

“Moscow has also agreed to finance rehabilitation of Guddu and Muzaffargarh power plants and a deal may be reached in this connection during the Russian president’s visit,” an official of the Ministry of Water and Power said.

In addition to this, the two countries may enter into a deal for expansion of financially troubled Pakistan Steel Mills. During the working group meeting held late last month, they had discussed ways of enhancing the capacity of the steel mill with promise of Russian support.

Under the programme, the mill’s production capacity will be enhanced to 1.5 million tons per annum from existing 1.1 million tons. Initial cost of the project is estimated at Rs30.45 billion, though actual cost will be determined after a technical audit of the plant by a Russian company.

Russia has linked provision of financing for the project with award of contract to its state-owned firm VO Tyazhpromexport.

In the working group meeting, the Russian authorities offered $500 million for the Central Asia South Asia (CASA) electricity import project, which would bring electricity from Central Asian states.

Under the project floated in 2006, 1,000 to 1,300 megawatts of surplus electricity will be imported from Tajikistan and Kyrgyzstan. “US, World Bank and Islamic Development Bank (IDB) have also backed the project,” an official said.

Published in The Express Tribune, July 25th, 2012.]]>
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			<title>Gas import: Iran to lay Pakistan’s portion of pipeline</title>
			<link>https://tribune.com.pk/story/410162/gas-import-iran-to-lay-pakistan%e2%80%99s-portion-of-pipeline</link>
			<comments>https://tribune.com.pk/story/410162/gas-import-iran-to-lay-pakistan%e2%80%99s-portion-of-pipeline#comments</comments>
			<pubDate>Thu, 19 Jul 12 00:08:34 +0500</pubDate>
			<dc:creator>
				<![CDATA[zafar.bhutta]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category><category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=410162</guid>
			<description>
				<![CDATA[Workin­g commit­tee formed to finali­se terms of agreem­ent.]]>
			</description>
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				<![CDATA[Avoiding pressure from the United States, Pakistan and Iran have committed to press ahead with the gas pipeline project and constituted a joint working committee to finalise a deal for laying Pakistan’s portion of the pipeline by Tehran.

Iran has also offered to set up an oil refinery in Pakistan. Earlier, it had discussed a plan to lay an oil pipeline to Gwadar where a refinery would be set up to process crude oil.

Until one and a half years ago, two Pakistani refineries had been importing Iranian crude oil on three-month credit, but supply stopped afterwards as banks showed reluctance to open letters of credit following imposition of US sanctions on Tehran.

According to sources, these developments came during two days of talks in Islamabad, which concluded on Wednesday.

Sources told The Express Tribune that Iranian authorities reiterated their resolve to provide technical and financial help for constructing the gas pipeline.

“A joint working group has been formed to consider different options for Iran to lay the pipeline,” a source said, adding Tehran had already committed to provide $250 million and was willing to arrange more financing through Chinese commercial banks.

“The working group will also discuss the option of financing offered by Iran,” the source said. German-based firm ILF has completed detailed engineering design of the pipeline and according to an interim feasibility report, the project will cost $1.2 billion to $1.5 billion.

“If local companies participate in the project, the cost will come down and if foreign firms undertake the venture the cost will go up. There is also an option under which local and Iranian companies will join hands to complete the project,” the source said.

“Though Iran is an option to strike deal on government-to-government basis, we are also discussing the construction of the pipeline with China and Russia,” he said.

Meanwhile, the Pakistan-Iran joint committee on oil, gas and energy held a meeting on July 17 and 18 in Islamabad to discuss bilateral cooperation in oil and gas sectors.

The Iranian team was headed by Dr Ahmad Khalidi, Deputy Minister of Internal Affairs, Ministry of Petroleum while Pakistani team was led by Abid Saeed, Additional Secretary Ministry of Petroleum and Natural Resources.

The Iranian side expressed its intention to invest in hydrocarbon exploration and production including upstream and midstream sectors. It also invited Pakistani companies to invest in oil and gas exploration and production in Iran.

Published in The Express Tribune, July 19th, 2012.]]>
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			<title>UN curbs cloud hopes for Iran power deal</title>
			<link>https://tribune.com.pk/story/398763/un-curbs-cloud-hopes-for-iran-power-deal</link>
			<comments>https://tribune.com.pk/story/398763/un-curbs-cloud-hopes-for-iran-power-deal#comments</comments>
			<pubDate>Mon, 25 Jun 12 04:23:34 +0500</pubDate>
			<dc:creator>
				<![CDATA[our.correspondent]]>
			</dc:creator>
			<category><![CDATA[Business]]></category><category><![CDATA[World]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=398763</guid>
			<description>
				<![CDATA[Officials say project is more viable than Tapi gas pipeline.]]>
			</description>
			<content:encoded>
				<![CDATA[Pakistan’s plan to import 1,000 megawatts of electricity from Iran might be thwarted by further UN sanctions and relentless pressure from the United States, senior water and power ministry officials said on Sunday.

A senior functionary told The Express Tribune that the Pakistan-Iran power deal depends on the policies of UN on Iran, which has faced increasing criticism in recent times for its alleged activities regarding nuclear weapons. He added that the ministry fears the US will also try and force Islamabad to give up its power import plan.

Iran said earlier it was ready to increase the power import plan to up to 500MW if Pakistan so desired. This would mean considerable revenue for Tehran and equal amounts of discomfort for the US.

The infrastructure required to materialise this deal includes the construction of a power house in the Iranian city of Zahedan, a grid station in Quetta, and a 700-kilometre transmission line to connect the two power stations. Work on the said projects is to start soon.

So far, the project has received an encouraging response from both countries. Iran has agreed to cover the entire cost of the project, amounting to $800 to $900 million, which may take over four years to become functional. It has also accepted Islamabad’s proposed tariff of 9 to 10 cents per unit.

The agreement was reached in the last week of May during the visit of a delegation led by Pakistan Electric Power Company’s then chief Rasool Mehsood to Tehran.

A foreign office official said Pakistan has few options left. Faced with a debilitating gas and electricity shortage, the country is already in the grip of an economic crisis. The official claims Pakistan’s decision to sign an agreement with Iran to import about 750 mmcfd of gas to produce around 4,000MW of electricity is a matter of sheer necessity.

The 2,775-kilometre gas line is not only lengthier than the power transmission one, but also expected to take more time to be completed: by 2014.

Experts are wary of US efforts to try and persuade Pakistan into opting for the Turkmenistan, Afghanistan, Pakistan and India (Tapi) project instead of the Pak-Iran gas pipeline. They say the former is surrounded by the uncertainty of a prolonged conflict in Afghanistan.

“Keeping in view our immediate needs, the US proposal is not a suitable proposition at all,” said the foreign ministry official. “We have already informed Washington of the dire consequences of abandoning the Pak-Iran project on our economy.”

Though the Tapi project might offer more attractive tariff rates, officials in the oil and natural resources ministry insist the project cannot be depended on entirely nor can the Pak-Iran venture be abandoned when it is so near to completion.

Published in The Express Tribune, 25th, 2012.]]>
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			<title>IP gas pipeline not on back burner: Dr Asim</title>
			<link>https://tribune.com.pk/story/373334/ip-gas-pipeline-not-on-back-burner-dr-asim</link>
			<comments>https://tribune.com.pk/story/373334/ip-gas-pipeline-not-on-back-burner-dr-asim#comments</comments>
			<pubDate>Thu, 03 May 12 03:26:48 +0500</pubDate>
			<dc:creator>
				<![CDATA[sumera.khan]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category><category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=373334</guid>
			<description>
				<![CDATA[Government committed to timely completion of the pipeline project to meet its energy requirements, the minister said.]]>
			</description>
			<content:encoded>
				<![CDATA[Islamabad has not put the Iran-Pakistan gas pipeline on the back burner and the project will be completed by 2016, said Petroleum Minister Dr Asim Hussain while responding to lawmakers’ questions in the Senate question hour on Wednesday.


The government is committed to the timely completion of the pipeline project to meet its energy requirements, the minister said. Various national and international lenders have shown their consent for financing the project and the country is on track to complete it within the stipulated time, he added. With the completion of the pipeline, the country will save $1 billion per year, taking total savings during the project’s 25-year contract period to $25 billion, the minister said.

Discrimination in appointments

On a query regarding discrimination in appointments made in Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipelines Limited (SNGPL), the minister said that 1,148 people have been appointed in the two companies since 2008.

In SSGC, 112 executives and 239 subordinates were appointed from all provinces while 163 executives and 935 subordinates were appointed from all provinces, Azad Jammu and Kashmir, Fata and the federal capital in SNGPL.

Hajj arrangements

The directorate general of Hajj in Jeddah has hired 47 buildings, with a cumulative capacity of 18,794 pilgrims, in the ‘white’ category, at a cost of 3,600 Saudi riyals per person, said Religious Affairs Minister Khursheed Shah while responding to a question.

An additional 55 buildings are being hired, with a cumulative capacity of 30,522 pilgrims, he added.

Published in The Express Tribune, May 3rd, 2012.]]>
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			<title>No pressure from Riyadh on Iran pipeline: FO</title>
			<link>https://tribune.com.pk/story/363985/no-pressure-from-riyadh-on-iran-pipeline-fo</link>
			<comments>https://tribune.com.pk/story/363985/no-pressure-from-riyadh-on-iran-pipeline-fo#comments</comments>
			<pubDate>Fri, 13 Apr 12 04:03:28 +0500</pubDate>
			<dc:creator>
				<![CDATA[our.correspondent]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=363985</guid>
			<description>
				<![CDATA[Spokesperson says Iran and S Arabia relations not linked.]]>
			</description>
			<content:encoded>
				<![CDATA[The foreign ministry on Thursday denied that Riyadh was pressurising Islamabad on the Iran-Pakistan (IP) gas pipeline project.


“Saudi Arabia is our important development partner. I can tell you that there is no pressure from Saudi Arabia on the IP gas pipeline project,” foreign office spokesperson Abdul Basit said at his weekly briefing on Thursday.

He was reacting to reports that a Saudi deputy foreign minister, during his recent visit to Islamabad, delivered an important message offering Pakistan alternative options to meet its growing energy demands in return for staying away from the multi-billion dollar IP gas pipeline.

The project is scheduled to complete by 2014 but its fate hangs in the balance due to simmering tensions between the US and Iran.

The US has already threatened Pakistan with dire consequences if it goes ahead with the project.

“Iran is also a brotherly country and there are no linkages between our relations with Saudi Arabia and our relations with Iran,” Basit said.

Tehran and Riyadh have a history of mistrust, posing a serious challenge for Pakistan to maintain a delicate balance in its bilateral relations with them.

“We consider both the countries as our friends and brothers and attach highest of importance in further deepening our relations with them in all spheres,” the spokesman maintained.

Peace with India

Irrespective of the tragedy at a military camp in Siachen, Pakistan wants to resolve all outstanding disputes with India, Basit said.

“Siachen is already part of the dialogue process. There is nothing new about it. As far as Pakistan is concerned we have always maintained that all issues between Pakistan and India should be resolved, especially the core dispute of Jammu and Kashmir,” he added.

The spokesperson said Pakistan hoped that the ongoing peace process with India would be able to move beyond the confidence building measures and settle issues bedevilling relations between the two countries.

“At the end of the day, the effectiveness and credibility of any dialogue process hinges on its results. We hope that this dialogue, as our foreign minister said on many occasions, is result-oriented,” he added.

Published in The Express Tribune, April 13th, 2012.]]>
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			<title>Pakistan eyes Russia for controversial gas project</title>
			<link>https://tribune.com.pk/story/356944/pakistan-eyes-russia-for-controversial-gas-project</link>
			<comments>https://tribune.com.pk/story/356944/pakistan-eyes-russia-for-controversial-gas-project#comments</comments>
			<pubDate>Thu, 29 Mar 12 09:55:44 +0500</pubDate>
			<dc:creator>
				<![CDATA[afp]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=356944</guid>
			<description>
				<![CDATA[Pakistan team to hold talks with relevant officials, different companies, including Russian gas giant Gazprom.]]>
			</description>
			<content:encoded>
				<![CDATA[Pakistan said Thursday it would seek Russian funding for a multi-billion dollar gas pipeline from Iran amid Chinese reluctance to invest in the project over fears it could be hit by sanctions.

The quest for alternative sources of funds began when the Industrial and Commercial Bank of China (ICBC) failed to sign up to a consortium to finance Pakistan’s $1.5 billion share of the project.

“Pakistan’s technical delegation will visit Moscow early next month to have discussions on this subject,” said Foreign Ministry Spokesman Abdul Basit.

The Pakistan team will hold talks with relevant officials and different companies, including Russian gas giant Gazprom, Basit said.

A Petroleum Ministry official confirmed that Russia was a possible source of funding, given that there has still been no formal response from ICBC.

The United States wants Islamabad to abandon the project because of sanctions against Iran over its controversial nuclear programme, but Pakistan has insisted it is vital in helping to overcome a debilitating energy crisis.

Pakistan and Iran signed a deal in 2010 in which Tehran would supply natural gas to its eastern neighbour from 2014, with sales to reach 750 million cubic feet (21 million cubic metres) to one billion cubic feet per day by mid-2015.

Pakistan, which produces just 80% of its own electricity needs, has presented the $7.5 billion gas project as a partial answer to the energy crisis, which has led to blackouts and has suffocated industry.]]>
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			<title>The Iran pipeline</title>
			<link>https://tribune.com.pk/story/355566/the-iran-pipeline</link>
			<comments>https://tribune.com.pk/story/355566/the-iran-pipeline#comments</comments>
			<pubDate>Mon, 26 Mar 12 20:04:59 +0500</pubDate>
			<dc:creator>
				<![CDATA[editorial]]>
			</dc:creator>
			<category><![CDATA[Editorial]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=355566</guid>
			<description>
				<![CDATA[Iran pipeline would allow one billion cubic feet per day, TAPI pipeline would allow import of 10 billion annually.]]>
			</description>
			<content:encoded>
				<![CDATA[President Asif Ali Zardari’s state visit to Dushanbe, to meet with the heads of state of Tajikistan, Afghanistan and Iran may be one of the most consequential of his presidency. With Pakistan’s energy crisis becoming ever more grave, the need for power has never been more acute. It was heartening, then, that the president insisted that Pakistan would go ahead with both the Iran gas pipeline and the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline. As welcome as these words are, there is every chance that they will collide with the immovable forces of superpower politics and the threat of militancy. Of the two proposed pipeline projects, the Iran gas pipeline is by far the more viable option. It is more affordable than the TAPI pipeline and also faces less threat of being blown up by extremists. The TAPI pipeline would run through Herat and Kandahar in Afghanistan and Quetta in Pakistan, which makes the chances of sabotage more of a certainty than a possibility.

The Iran pipeline, on the other hand, faces the equally deadly American veto. The US, through Secretary of State Hillary Clinton, has already floated the threat of sanctions should Pakistan go through with the proposal. The US has also been making use of back channels to put funding for the project into peril. A Chinese bank withdrew its promise of money for the pipeline after quiet US intervention. Now, if the two countries want to continue with the pipeline, they will have to come up with the funding themselves. So given how essential the pipeline is for Pakistan’s future, it is time we call America’s bluff and ensure the project is completed.

Presently, Pakistan is facing a gas shortage of one billion cubic feet per day and, short of massive price increases that would more than double the cost of gas to consumers, the only way to meet the demand is through these pipelines. Once the gas pipelines are functional, the TAPI pipeline is estimated to allow Pakistan the import of 10 billion cubic metres of gas every year, while the Iran pipeline would facilitate the import of one billion cubic feet per day. The Americans might threaten to shut off the aid spigot, but this is one occasion where we need to keep our long-term interests in mind, even if they lead to a clash with Washington.

Published in The Express Tribune, March 27th, 2012.]]>
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			<title>Dushanbe quadrilateral meeting: Looking past US curbs, govt pushes ahead with IP project</title>
			<link>https://tribune.com.pk/story/355092/dushanbe-quadrilateral-meeting-looking-past-us-curbs-govt-pushes-ahead-with-ip-project</link>
			<comments>https://tribune.com.pk/story/355092/dushanbe-quadrilateral-meeting-looking-past-us-curbs-govt-pushes-ahead-with-ip-project#comments</comments>
			<pubDate>Mon, 26 Mar 12 00:14:04 +0500</pubDate>
			<dc:creator>
				<![CDATA[agencies]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=355092</guid>
			<description>
				<![CDATA[Pakistan, Iran, Afghanistan and Tajikistan in a united front against terror, militancy and drug trafficking.]]>
			</description>
			<content:encoded>
				<![CDATA[In a clear snub to the United States over its sanction threats, Pakistan has reassured Iran and other regional countries that the proposed gas pipeline projects will go ahead as planned.


Ahead of a key regional security summit in the Tajik capital, President Asif Ali Zardari told his counterparts from Iran, Afghanistan and Tajikistan that his country was committed to completing the Iran-Pakistan (IP) and Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline projects. “I look forward to working with you on all issues of mutual interest,” he added.

US Secretary of State Hillary Clinton warned earlier this month that Pakistan could face US sanctions if it pressed ahead with the gas pipeline project with Iran. “[This] would be particularly damaging to Pakistan because their economy is already quite shaky,” Clinton had told a Congressional hearing.

At Sunday’s quadrilateral meeting in Dushanbe, Presidents Asif Zardari, Hamid Karzai, Mahmoud Ahmedinejad and Emomali Rahmon renewed their resolve to put up a joint fight against terrorism, militancy and drug trafficking for a ‘win-win situation’. They also agreed to tap the full economic potential of the region by strengthening trade and economic cooperation among them.

The four leaders – who were together for Nowruz celebrations hosted by the Tajik leader –discussed matters of mutual interest, including ways and means to strengthen trade and economic cooperation, among their countries.

Presidential spokesperson Farhatullah Babar later said that President Zardari underscored the need for enhanced regional cooperation to overcome the drug trafficking-militancy nexus – a major impediment in the trade and economic development of the region. The president said he had taken up the issue at international level and would continue to pursue it adding. “We must work together.”

About the Afghan imbroglio, President Zardari said that ‘non-state actors’ wanted to destabilise Afghanistan. But Pakistan is committed to peace in the region, particularly in Afghanistan, because a stable Afghanistan is also in the interest of the country.

The president said that in the post 2014 geo-strategic scenario after the drawdown of foreign forces from Afghanistan, closer cooperation among the four countries in all fields, particularly defence, security and intelligence-sharing, assumes greater significance. All the four leaders were unanimous in the view that terrorism and militancy pose a serious threat to peace, security and socio-economic development of the region and need to be tackled jointly and through regional approach and solutions.

Iranian President Mahmoud Ahmadinejad used his visit to the Tajik capital to ratchet up rhetoric in the face of renewed international pressure over his country’s contested nuclear drive.

“Only the friends and neighbours of Afghanistan can in practice and realistically help this nation,” Ahmadinejad said in a statement released by his office on Saturday. “The occupiers who came to this nation from kilometres away are not here to aid the government and the people of Afghanistan but are here to loot the resources and mines of Afghanistan,” he said.

However, unlike Ahmadi-nejad’s, the speeches of Zardari and Karzai were more restrained that made no reference to the presence of foreign troops in Afghanistan or the United States.

The quadrilateral meeting came as President Barack Obama’s regional pointman Marc Grossman sat down with Afghan Deputy Foreign Minister Jawed Ludin and Pakistan’s Foreign Secretary Jalil Abbas Jilani to discuss Karzai’s visit to Islamabad last month.

Grossman has been handed the delicate mission of ensuring Iran does not use its historic ties to Pakistan to spread its influence over Afghanistan after the Western troop withdrawal is complete.

Grossman said his meeting focused on Karzai’s ‘very successful’ visit to Islamabad which was followed by the Afghan leader’s invitation for the Taliban militia to open direct talks with his government.

The Taliban leadership broke off contacts with the United States in mid-March because of a row over a prisoner swap. But Grossman sounded an optimistic note, saying that “we now find ourselves in a happy position of building on our momentum”.

Grossman also met President Zardari who told him that the parliamentary review of Pakistan-US relations, which was long overdue, is a manifestation of democracy taking roots in Pakistan and the elected representatives taking ownership of one of Pakistan’s most important bilateral relationships.

He said that the government would act within the parameters set by parliament and would not bypass it.

Published in The Express Tribune, March 26th, 2012.]]>
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			<title>Iran oil Imports: Pakistan among countries facing US sanctions threat</title>
			<link>https://tribune.com.pk/story/353911/iran-oil-imports-pakistan-among-countries-facing-us-sanctions-threat</link>
			<comments>https://tribune.com.pk/story/353911/iran-oil-imports-pakistan-among-countries-facing-us-sanctions-threat#comments</comments>
			<pubDate>Fri, 23 Mar 12 01:07:39 +0500</pubDate>
			<dc:creator>
				<![CDATA[huma.imtiaz]]>
			</dc:creator>
			<category><![CDATA[World]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=353911</guid>
			<description>
				<![CDATA[Other countries facing potential sanctions include China, and India.]]>
			</description>
			<content:encoded>
				<![CDATA[Pakistan, India and China and nine other countries that import crude oil from Iran may be hit with US sanctions. US Secretary of State Hillary Clinton earlier announced a list of 11 countries that had been exempted from sanctions, as they had “significantly reduced” their purchases of crude oil.


While a State Department official briefing reporters on condition of anonymity did not reveal the names of countries that could potentially face sanctions, Reuters reported that China, Iran and Pakistan were on the list.

According to Secretary Clinton’s statement, she would certify to Congress that financial institutions based in these 11 countries will not have to face sanctions for a renewable period of 180 days. According to the National Defence Authorisation Act 2012, the United States may impose sanctions on the countries that are purchasing petroleum products from Iran within 180 days of passing the Act if the President determines that “there is a sufficient supply of petroleum and petroleum products from countries other than Iran to permit a significant reduction in the volume of petroleum and petroleum products purchased from Iran by or through foreign financial institutions.” A State Department official said that approximately 23 countries had been importing Iranian crude oil.

According to the official, on June 28 this year, if the US president has already determined that price and supply conditions enable countries to switch from Iran to other supplies, then another set of sanctions comes into effect. The State Department official said, “Those sanctions are against any transactions with the Central Bank of Iran by any financial institution, whether it’s private or public, related to the purchase of petroleum or petroleum products for Iran.”

In response to a question, the official said, “For those 12 countries, they – it is – they now have an example that they can look at to determine what kind of actions that they might be willing to consider domestically. In terms of sanctionable activity, we can’t comment on that because the first step has to be to determine and detect whether there such activity, and secondly, to then determine if there is a case to be built up around it.”

Speaking to reporters on Wednesday at the daily press briefing, State Department spokesperson Victoria Nuland said that they are having negotiations with countries concerned on the subject of decreasing crude oil imports from Iran.

The US earlier said that it does not believe that the Iran-Pakistan pipeline project is a good idea. In February, during her testimony to a House committee hearing, Secretary Clinton said: “We believe that actually beginning the construction of such a pipeline, either as an Iranian project or as a joint project, would violate our Iran sanctions law. So, you know, we all know what the consequences of that are. And it would be particularly damaging to Pakistan because their economy is already quite shaky. This additional pressure that the United States would be compelled to apply would further undermine their economic status. So we’ve been, you know, very clear in pointing out the consequences of pursuing such a pipeline.”

Speaking to Express News on the Pakistan-Iran pipeline and the sanctions, Shuja Nawaz, the South Asia director at the Atlantic Centre, said that according to experts they had spoken to, countries could go to the World Trade Organisation and take their case there. “These sanctions might be cancelled, but countries such as India do not want their relations with the US to worsen, especially when there is a lot of investment and trade potential with the United States.” (With additional input from Reuters)


Published in The Express Tribune, March 23rd, 2012.]]>
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			<title>Gas pipeline: Pakistan hiring experts to study Iran sanctions</title>
			<link>https://tribune.com.pk/story/353448/gas-pipeline-pakistan-hiring-experts-to-study-iran-sanctions</link>
			<comments>https://tribune.com.pk/story/353448/gas-pipeline-pakistan-hiring-experts-to-study-iran-sanctions#comments</comments>
			<pubDate>Thu, 22 Mar 12 04:49:26 +0500</pubDate>
			<dc:creator>
				<![CDATA[zafar.bhutta]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=353448</guid>
			<description>
				<![CDATA[A delegation to depart for Russia to negotiate with energy giant Gazprom.]]>
			</description>
			<content:encoded>
				<![CDATA[Amid fears of possible sanctions being imposed by Washington, Pakistan has decided to hire the services of international legal experts to seek opinion on effects of prospective US sanctions, in case it went ahead with the Iran-Pakistan (IP) gas pipeline project. 

The decision to hire legal experts was taken at a high level meeting presided over by Prime Minister Yousaf Raza Gilani at the Prime Minister’s House on Wednesday.

The meeting was convened to review the energy situation in the country, expand the power generating capacity of the existing electricity infrastructure and explore alternate energy sources.

The meeting was attended by the Minister of Foreign Affairs Hina Rabbani Khar, Minister of Finance Dr Hafeez Sheikh, Minister of Water and Power Syed Naveed Qamar, Foreign Secretary Jalil Abbas Jilani, Finance Secretary Abdul Wajid Rana, and Deputy Chairman Planning Commission Dr Nadeem ul Haq.

The possibility of US sanctions against Pakistan was discussed, one of the participants of the meeting told The Express Tribune.

He said that the government wanted to explore the possible effects of sanctions if it refused to bow to the pressure exerted by Washington.

“We have discussed the option of materialising the IP gas project with assistance from Russia and China,” the participant said.

The prime minister was informed that a delegation of Pakistanis would soon depart for Russia to negotiate with Russian energy giant Gazprom to materialise the pipeline project.

He also directed the ministries of water and power and petroleum to ensure that load shedding was minimised, and further efforts be made to provide relief to the public and the industry from the ongoing power crisis.

Published in The Express Tribune, March 22nd, 2012.]]>
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			<title>Welcome change or more of the same?</title>
			<link>https://tribune.com.pk/story/352595/welcome-change-or-more-of-the-same</link>
			<comments>https://tribune.com.pk/story/352595/welcome-change-or-more-of-the-same#comments</comments>
			<pubDate>Tue, 20 Mar 12 18:11:47 +0500</pubDate>
			<dc:creator>
				<![CDATA[tariq.fatemi]]>
			</dc:creator>
			<category><![CDATA[Opinion]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=352595</guid>
			<description>
				<![CDATA[Sadly, all US did to solve our energy needs was to push TAPI pipeline, which experts agree will remain a pipe dream.]]>
			</description>
			<content:encoded>
				<![CDATA[An alarming fall-out from the enhanced US-Iran tension, is the renewed pressure on Pakistan to abandon the gas pipeline project with Iran, which could kill the prospect of an early end to the nation’s worsening energy crisis.

While it is essential to invest in further gas and oil exploration and also exploit other sources of energy, the most economic and secure way for the foreseeable future, is to import gas from neighbouring Iran –– the world’s second largest gas producer. It sounds simple and do-able, but inability to appreciate the enormity of the challenge and advantages of this project, has stymied any meaningful progress on it, ever since Iran and Pakistan came to a preliminary agreement in 1995.

Regrettably, the Musharraf regime had no interest in the energy sector, as evident from its refusal to go either for the IP pipeline project or to heed the advice of experts who advocated construction of small and medium-sized dams, especially after Kalabagh Dam, became a contentious issue. When India pulled out of the project in wake of the Bush administration’s offer of civilian nuclear reactors in 2005, the national consensus favoured seeking a similar concession, or failing that, to obtain assurances that the US would not oppose the Iran-Pakistan pipeline project. Sadly, the government did neither.

However, if recent statements are to be believed, the current government appears to have woken up to the critical importance of this project. Foreign Minister Hina Rabbani Khar’s declaration that “these projects are in Pakistan’s national interest and will be pursued and completed, irrespective of any extraneous considerations” –– made in response to US Sectary of State Hillary Clinton’s thinly-veiled warning, that Pakistan should stay away from it –– represents a welcome change, provided that it is not meant merely to garner public approbation.

Secretary Clinton had added that, “as we are ratcheting up pressure on Iran, it seems somewhat inexplicable that Pakistan would be trying to negotiate a pipeline”. To Pakistanis, however, what is ‘inexplicable’ is the Obama Administration’s failure to appreciate the desperate economic needs of an ally, with whom it sought to establish strategic relations. Pakistanis recall the repeated assurances by both, Clinton and Ambassador Richard C Holbrooke that the administration would provide meaningful assistance to overcome our energy needs. Sadly, all that the US did was to keep pushing the Turkmenistan-Afghanistan-Pakistan-India pipeline, which experts agree will remain a pipe dream till our neighbour stabilises, and the Turkmen are able to convince the world that the gas they want to sell is theirs and not owned by Russia’s energy giant, Gasprom.

Of course, it is no secret that ever since the Islamic Revolution in Iran in 1979 overthrew America’s regional policeman, Washington has been engaged — both overtly and covertly — in destabilising that country. In more recent times, criticism of Iran has shifted away from allegations of involvement in terrorism to pursuing nuclear weapons, though acknowledging that these are all meant to promote the strategic goal of a regime change. While we have neither the will nor the capacity to dissuade the US from pursuing this adventurous policy, we have every right to question why a country that claims to be our friend would try to dissuade us from exercising the only serious option available for overcoming an energy shortfall, which has crippled the economy and thrown a huge number of people out of their jobs.

This is highly regrettable, as the US had no hesitation in modifying its domestic laws, violating the Nuclear Non-Proliferation Treaty provisions and arm-twisting Nuclear Suppliers Group members to offer the civilian nuclear deal to India in its desire to build a strategic partnership with her. While we do not grudge what the US wishes to give India –– a country described by then under secretary Nicholas Burns as “unique” for which a “unique agreement” had been crafted, Pakistanis are within their rights to expect that the US will show understanding of our legitimate needs, which incidentally will not mean investment in Iran’s economy, but in our own infrastructure.

Published in The Express Tribune, March 21st, 2012.]]>
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			<title>Financing needs: IP gas pipeline – Russia catches Pakistan’s eye</title>
			<link>https://tribune.com.pk/story/352334/financing-needs-ip-gas-pipeline-%e2%80%93-russia-catches-pakistan%e2%80%99s-eye</link>
			<comments>https://tribune.com.pk/story/352334/financing-needs-ip-gas-pipeline-%e2%80%93-russia-catches-pakistan%e2%80%99s-eye#comments</comments>
			<pubDate>Mon, 19 Mar 12 21:43:34 +0500</pubDate>
			<dc:creator>
				<![CDATA[zafar.bhutta]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=352334</guid>
			<description>
				<![CDATA[Delegation will visit Moscow to try to strike a deal with energy giant Gazprom.]]>
			</description>
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				<![CDATA[As a Chinese bank has backed off from financing the $1.5 billion Iran-Pakistan gas pipeline project amid pressure from the United States, Russia has caught the attention of Pakistan, which is planning to explore this viable option first.


The decision to negotiate a deal with Russia came in a recent meeting of the sub-committee formed by the Economic Coordination Committee (ECC) of the cabinet.

Earlier, Russia had offered Pakistan that it would fully finance the pipeline if its energy giant Gazprom was awarded the contract without bidding during a four-day visit of Foreign Minister Hina Rabbani Khar to Moscow in February. In order to give its assent to the offer, the government will have to waive Public Procurement Regulatory Authority (PPRA) rules – designed to ensure transparency in government dealings.

“A delegation will visit Russia soon to negotiate a deal with Gazprom,” Petroleum Secretary Ijaz Chaudhry told The Express Tribune. Recently, he said, the ECC sub-committee had considered different options for going ahead with the vital gas pipeline project.

“No decision, however, has been taken yet to award the contract to Russia, but Pakistan will discuss this option,” he clarified.

Chaudhry also dispelled perception that the Industrial and Commercial Bank of China (ICBC) had distanced itself from the project and said “we have written a letter to ICBC, asking it to clear its position as financial adviser to the project.”

The Inter-state Gas Systems (ISGS) had signed a deal with financial advisers for raising funds for the project, except for ICBC which was in the process of taking approvals.

“It is apprehended that a probable reason for not signing the agreement could be geo-political situation in the region,” said a summary tabled before ECC.

Earlier, the sub-committee had considered approaching China and Russia to seek financial assistance for the project. However, Russia now appeared to be leading the race, a ministry official said, adding the committee also studied the Iranian offer of $250 million for constructing the pipeline.

Under the project, an 800-kilometre-long pipeline will be laid from the Iran-Pakistan border to Nawabshah.

According to sources, the project has entered implementation phase and work on front-end engineering and design, feasibility and detailed route survey has already got under way. A joint venture of Germany’s ILF and Pakistan’s Nespak is doing the engineering work and survey, scheduled to be completed by June this year.

Cost of the project is likely to rise to around $1.5 billion compared to earlier estimates of $1.2 billion. ECC has set a debt-to-equity ratio of 70:30 for the project with the government holding majority shares on the equity side.

According to the ECC summary, tender documents have been issued to pipeline suppliers while for engineering, construction and procurement (ECP) contractors and compressor station suppliers, tender details are being finalised, which will be issued in a couple of months. These contracts are expected to be executed in the second and third quarter this year.

Published in The Express Tribune, March 20th, 2012.]]>
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			<title>Sweden not only opposes Pak-Iran pipeline, also deems TAPI not viable</title>
			<link>https://tribune.com.pk/story/350882/sweden-not-only-opposes-pak-iran-pipeline-also-deems-tapi-not-viable</link>
			<comments>https://tribune.com.pk/story/350882/sweden-not-only-opposes-pak-iran-pipeline-also-deems-tapi-not-viable#comments</comments>
			<pubDate>Fri, 16 Mar 12 11:38:31 +0500</pubDate>
			<dc:creator>
				<![CDATA[web.desk]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=350882</guid>
			<description>
				<![CDATA[Sweden opposes Pakistan’s collaboration with Iran because it said that Iran should clarify its nuclear objectives.]]>
			</description>
			<content:encoded>
				<![CDATA[Sweden has not only opposed the Pakistan-Iran gas pipeline project, but has also said that the alternative pipeline from Turkmenistan is also not viable, DawnNews reported on Friday.

Sweden opposed Pakistan’s collaboration with Iran because it said that Iran should clarify the reservations posed by the international community over Iran’s nuclear objectives.

The country also said that the Turkmenistan-Afghanistan-Pakistan-India (TAPI) Pipeline was not workable.

Earlier, a Chinese bank backed off from financing the Iran-Pakistan gas pipeline project. The ICBC was finalised as the financial advisor through an international competitive bidding.

The Industrial and Commercial Bank of China (ICBC) was reluctant to sign the financial advisor contract despite being the lowest bidder.

The financial advisor was responsible for arranging funds for completing the 800-kilometre-long pipeline, at an estimated cost of $1.5 billion.

According to a contract signed in 2009, Iran will supply 750 million cubic feet of gas per day from South Pars fields to Pakistan.]]>
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			<title>Iran gas pipeline</title>
			<link>https://tribune.com.pk/story/349945/iran-gas-pipeline</link>
			<comments>https://tribune.com.pk/story/349945/iran-gas-pipeline#comments</comments>
			<pubDate>Wed, 14 Mar 12 17:51:37 +0500</pubDate>
			<dc:creator>
				<![CDATA[editorial]]>
			</dc:creator>
			<category><![CDATA[Editorial]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=349945</guid>
			<description>
				<![CDATA[The Iran-Pakistan pipeline is so vital to the country’s energy needs that the extra cost can be overlooked.]]>
			</description>
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				<![CDATA[As much as we like to delude ourselves into believing that China is an all-weather friend who will stand by us no matter what, the alliance between the two countries is one that is based, like all alliances, on convenience and self-interest. There are now increasing signs that, in many areas, these interests are now diverging. The Industrial and Commercial Bank of China, which had previously committed to financing the Iran-Pakistan gas pipeline, has now decided to back off, most likely because another alliance — that with the US — took precedence over the alliance with Pakistan. The US has already threatened to impose sanctions on any company that deals with Iran and it appears that the Chinese have caved in. The former has also worked overtime to ensure that the Iran-Pakistan gas pipeline does not become a reality and its efforts do not seem to have been in vain.

Fortunately, for Pakistan there are possible alternatives to finance the project. The second-lowest bidder for the contract, which is a consortium that includes local firms and foreign firms with experience working in Pakistan, can be a possible alternative to finance the project. Although this option will end up costing the government more, the Iran-Pakistan pipeline is so vital to the country’s energy needs that the extra cost can be overlooked. Other options available include cutting out the middlemen and dealing directly with friendly governments or even coming to a barter agreement with Iran where we would exchange wheat in return for construction help for the pipeline. A gas levy is also reportedly being considered but, given recent gas price increases, that option may not be palatable to the Pakistani people.

As for China, we need to prepare for a time when our alliance with them is severely undermined by growing relations between China and India. Trade between the two countries has now reached nearly $50 billion a year and is only expected to increase substantially in the next few years. For an alliance that started only because the two countries shared a mutual suspicion of India, this spells trouble. Relying on only one ally is never a good idea, and in the case of China, it is becoming increasingly problematic.

Published in The Express Tribune, March 15th, 2012.]]>
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			<title>Multiple sources available for funding Pak-Iran pipeline: Khar</title>
			<link>https://tribune.com.pk/story/349862/multiple-sources-available-for-funding-pak-iran-pipeline-khar</link>
			<comments>https://tribune.com.pk/story/349862/multiple-sources-available-for-funding-pak-iran-pipeline-khar#comments</comments>
			<pubDate>Wed, 14 Mar 12 10:23:01 +0500</pubDate>
			<dc:creator>
				<![CDATA[our.correspondent]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=349862</guid>
			<description>
				<![CDATA[Khar's statement comes after a Chinese bank backed off from funding the Iran-Pakistan gas pipeline.]]>
			</description>
			<content:encoded>
				<![CDATA[Foreign Minister Hina Rabbani Khar said on Wednesday that there were multiple sources available for funding the Iran-Pakistan gas pipeline and that a Chinese bank's decision to back off from funding the project will not affect plans to import gas from the neighbouring country.

“There are multiple sources available and this is fairly a very viable project,” Khar told reporters at a joint news conference with her Swedish counterpart Carl Bildt in Islamabad.

Khar brushed aside the impression that the Chinese decision would affect the country’s plan to import gas from neighboring Iran. Pakistan is pursuing the project despite mounting US pressure to abandon the project.

Parliamentary review of US ties

The foreign minister insisted that the government’s decision to rewrite terms of engagement with the US, NATO and ISAF will expand cooperation with international players instead of contracting it.

“We hope that the world will respect the new terms of engagement,” she said, adding that Pakistan wanted to assist western forces stationed in Afghanistan with a smooth exit from the war-torn country.

Khar pointed out that Pakistan and the west had "convergence" on the issue of Afghanistan, but the area of difference was the "tools" being used to achieve the ending objective.

Pakistan seeks justice for US killing in Kandhar

The foreign minister strongly condemned the killing of 16 Afghan civilians including children by a US solider in Afghanistan. “We condemn this act in the strongest possible terms and we want that the person responsible for this must be brought to justice,” she said.

The Swedish foreign minister, whose country is also part of the ISAF, expressed his “deepest regret”’ over the incident.

“We hope this will not affect the overall policy in Afghanistan,” he said.

Pakistan-Sweden bilateral ties

Khar said Pakistan and Sweden have decided to double the existing volume of bilateral trade from $450 million to $900 million by 2014.

The Swedish foreign minister said his country endorsed Pakistan’s position that trade, not aid was the solution to the problem.]]>
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			<title>Financing the project: Chinese bank ‘backs off’ from Iran gas pipeline</title>
			<link>https://tribune.com.pk/story/349738/financing-the-project-chinese-bank-%e2%80%98backs-off%e2%80%99-from-iran-gas-pipeline</link>
			<comments>https://tribune.com.pk/story/349738/financing-the-project-chinese-bank-%e2%80%98backs-off%e2%80%99-from-iran-gas-pipeline#comments</comments>
			<pubDate>Tue, 13 Mar 12 23:51:10 +0500</pubDate>
			<dc:creator>
				<![CDATA[Shahbaz Rana]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=349738</guid>
			<description>
				<![CDATA[‘Changing geo-political situation’ cited in report submitted to ECC; discusses wheat barter with Iran.]]>
			</description>
			<content:encoded>
				<![CDATA[The all-weather friendship appears overcast, purportedly due to Western pressure.


A federal cabinet committee on Tuesday constituted a ministerial committee for reviewing alternate options to arrange funds for construction of the Iran-Pakistan gas pipeline after a Chinese bank backed off from financing the project.

Headed by Finance Minister Dr Abdul Hafeez Shaikh, the Economic Coordination Committee (ECC) of the Cabinet took the decision after the petroleum ministry disclosed that the Industrial and Commercial Bank of China (ICBC) was reluctant to sign the financial advisor contract despite being the lowest bidder.

The financial advisor is responsible for arranging funds for completing the 800-kilometre-long pipeline, at an estimated cost of $1.5 billion.

The committee will comprise the petroleum minister, the water and power minister, the State Bank governor, petroleum, finance and economic affairs division secretaries and the Planning Commission deputy chairman.

“A probable reason for not signing the agreement [by the ICBC] to date could be changing geo-political situation in the region,” said a petroleum ministry summary tabled at the ECC meeting. Earlier, the US has threatened to impose sanctions on companies that deal with Iran.

The ICBC was finalised as the financial advisor through an international competitive bidding. However, according to a petroleum ministry official, the bank had demanded awarding the pipeline construction project to a Chinese firm without competitive bidding.

The petroleum ministry sought the ECC’s permission to cancel the contract with the ICBC and award it to the second-lowest bidder, which is a consortium of United Bank Limited, Burj Capital, ECO Trade and Development Bank, Field Stone Group and Islamic Corporation for Development of Private Sector.

The decision to go ahead with the pipeline project came despite a US ‘warning’ to look for alternative options and abandon the project.

According to a contract signed in 2009, Iran will supply 750 million cubic feet of gas per day from South Pars fields to Pakistan.

Alternative options

The ministerial committee will consider two options.

The petroleum ministry has proposed that the government set up separate accounts in Pakistani banks to collect a gas development cess levied to build the pipeline. The estimates suggest that all funding requirements could be met through gas cess, the proposal stated.

The ministry also proposed to approach the Chinese, Russian or Iranian governments for signing government-to-government contract for construction of the pipeline from the Iranian border to Nawabshah. If this proposal was accepted though, the government will have to waive off public procurement regulatory authority rules to avoid competitive bidding. Iran has already offered $250 million for pipeline construction.

Exporting wheat

The ECC also discussed the possibility of exporting wheat to Iran in a barter arrangement, agreed to explore further arrangements of barter trade with Iran, expedite the process, plan the restructuring of barter system, and to find out items which may be procured from Iran in return. A ministerial committee was also constituted to look into the issue and report to the ECC.

The committee also allowed selling 450,000 metric tons of surplus wheat in the domestic market. The ministry of national food security and research had proposed selling 1 million tons of wheat to the local millers.

Railways loan

The ECC approved Rs6.1 billion in loan for railways ministry for repair of 96 locomotives. The loan will be given in advance to Pakistan Railways Advisory and Consultancy Services Limited, a subsidiary of Pakistan Railways whose shares are wholly owned by the government. The railways ministry has already signed the loan agreement with a consortium of commercial banks.

Other decisions

The ECC increased the sale price of fertiliser at government outlets by 23%. Against the previous rates of Rs1,300, the new price has been set at Rs1,600 per 50 kg bag, according to the finance ministry.  The government is subsidising imported urea since each 50 kg bag costs more than Rs3,000.

Meanwhile, the body also changed the sales tax calculation formula on hydroelectric power.

(Read: Pakistan and the Iran pipeline)

Published in The Express Tribune, March 14th, 2012.]]>
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			<title>Pak-Iran pipeline: ECC on the lookout for new funding options</title>
			<link>https://tribune.com.pk/story/349441/pak-iran-pipeline-ecc-on-the-lookout-for-new-funding-options</link>
			<comments>https://tribune.com.pk/story/349441/pak-iran-pipeline-ecc-on-the-lookout-for-new-funding-options#comments</comments>
			<pubDate>Tue, 13 Mar 12 13:24:09 +0500</pubDate>
			<dc:creator>
				<![CDATA[Shahbaz Rana]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=349441</guid>
			<description>
				<![CDATA[A ministerial committee is set up to  hire financial advisors for arranging funds.]]>
			</description>
			<content:encoded>
				<![CDATA[A ministerial committee was constituted on Tuesday by the Economic Coordination Committee (ECC), to hire financial advisors for arranging funds for the construction of the Iran-Pakistan gas pipeline after a Chinese bank backed off due to increasing US pressure.

The ministerial committee, to be assisted by three federal secretaries, will review options of a possible deal with China, Russia or Iran with regards to the construction of the 800 kilometre pipeline from the Iranian border to Nawabshah.

Headed by Finance Minister Dr Abdul Hafeez Shaikh, the ECC directed the ministerial committee to finalise its recommendations as early as possible, to meet the project completion deadline.

The committee will comprise of Minister for Petroleum and Natural Resources, Minister for Water and Power, Governor State Bank of Pakistan, Secretaries Economic Affairs Division, Petroleum, Finance and Deputy Chairman Planning Commission.

The decision to go ahead with the pipeline project came despite the US “warning” to look for alternate options and abandon the Iran project. The US has threatened to impose sanctions on companies that deal with Iran.

According to a summary tabled by the Ministry of Petroleum, the Industrial and Commercial Bank of China (ICBC) was backing off from signing the pipeline construction deal. It said that the delay in signing may result in an overall delay of the project.

“The possible reason for not signing the agreement could be the changing geo-political situation in the region,” the official documents stated.

The petroleum ministry has sought ECC permission to cancel the contract with the ICBC and sign a new one with the second lowest bidder.

The ministry also recommended that the governments of China and Russia should be approached for project funding. But to go with this option, a waiver from public procurement regulatory authority rules will be required, ministry officials said.

According to another option, Iran could also be approached for the construction of the Pakistani portion of the pipeline.]]>
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			<title>Pakistan and the Iran pipeline</title>
			<link>https://tribune.com.pk/story/347314/pakistan-and-the-iran-pipeline</link>
			<comments>https://tribune.com.pk/story/347314/pakistan-and-the-iran-pipeline#comments</comments>
			<pubDate>Thu, 08 Mar 12 18:26:15 +0500</pubDate>
			<dc:creator>
				<![CDATA[zafar.hilaly]]>
			</dc:creator>
			<category><![CDATA[Opinion]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=347314</guid>
			<description>
				<![CDATA[Zardari stands to benefit politically in the run-up to general elections, claiming he stood up to US bullying.]]>
			</description>
			<content:encoded>
				<![CDATA[Why did President Asif Ali Zardari defy the United States (by going ahead with the Iran-Pakistan pipeline deal) and claim during his speech in Larkana that he cares a toss for the US?

Consider. The Pakistan-Iran pipeline, if it ever gets off the ground, will only happen after, at best, three years because even the feasibility study that has just been commissioned by Pakistan won’t be completed till October 2013 and the pipeline construction can only commence when that is done. By that time, parts of Iran will be charred to smoking heaps and the pipeline project a part of history. Or, if that does not happen, Iran will arguably possess a nuclear weapon.

In either eventuality, maintaining US sanctions would be pointless, particularly if a nuclear Iran moves smartly to assuage international concerns by agreeing to a ‘no-first strike’ pledge and thereby eliminating, or nearly so, the danger of a nuclear conflagration with Israel.

Alternately, if there is a US-Iran war, the ‘force majeure’ exemption clause in international contracts allows one, or both parties, to withdraw without incurring any penalty, so what the heck?

Of course, if meanwhile, the US-Iran stand-off is resolved diplomatically, so much the better, as the lifting of US and UN sanctions on Iran would obviously form part of any settlement and hence, the pipeline project could proceed smoothly.

Mr Zardari also stands to benefit politically in the run-up to the general elections next year by claiming he is bravely standing up to American bullying. And just in case the PPP is wiped out by the Imran-generated tsunami, the next government, and not Zardari, will have to deal with the US and the consequences of his ‘brave’ stance.

The only risk President Zardari is taking is angering America and, of course, risking suspension of US assistance for the next 12-24 months. That, too, should not be that much of a bother since there is hardly any prospect of near term inflow of US aid even if the current gridlock is eventually removed.

Moreover, Pakistan can easily survive without US largesse for the next couple of years. Besides, it has other cards to play, including the resumption/cutting off of Nato supplies to Afghanistan and of a ‘US-friendly’/ ‘US-unfriendly’ role in the event of a US- Iran war to remind the US to tread lightly for its own good.

Moreover, if the government fails to raise the estimated $6-7 billion that Pakistan is required to incur for the completion of the project, it would have nevertheless demonstrated concern for the ‘welfare’ of the people and regard for neighbour Iran by concluding the agreement.

This was evident, too, in Ms Khar’s remark that in case the US imposed sanctions — as if that is not a foregone conclusion considering that the US is obliged to do so by law — Pakistan would weigh the pros and cons before taking a final decision on the project.

Actually, it would perhaps have been wiser for the PPP-led government, and especially President Zardari, to wait when there is so much uncertainty. Moreover, by the time the feasibility report is done, his co-signatory, Iranian Presiden Mahmoud Ahmedinijad may well be out of a job. Khamenei will likely abolish the post of president using the parliament he now dominates and Iran will be in a deeper mess, not to mention even more isolated internationally.

Why then has the president pushed ahead nonetheless, notwithstanding so much uncertainty?

Published in The Express Tribune, March 9th, 2012.]]>
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