ISLAMABAD: 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.