ISLAMABAD: A hand injury has forced Iranian Vice President Ali Saeedlou to postpone his visit to Pakistan and instead a team of Iranian experts dealing with $1.5 billion Iran-Pakistan gas pipeline and power import projects will arrive next week to push the projects forward.
“We have been told by the Iranians that the vice president has put off the trip because of a hand injury and may come to Pakistan after recovery,” an official told The Express Tribune.
The governments of Pakistan and Iran were scheduled to sign a $250 million loan agreement for financing the gas pipeline during the visit of Saeedlou from November 5 to 9.
“Now, we expect that initial signing of the loan agreement may take place when an Iranian team arrives next week, possibly on Monday or Tuesday,” the official said.
Tehran has also offered additional credit of $250 million, which will be arranged from its commercial banks, for financing the construction of the pipeline. It will also provide material support for the project.
On its part, the Government of Pakistan will raise funds for the pipeline through Gas Infrastructure Development Cess (GIDC), a kind of tax being charged from domestic gas consumers. The government expects to receive Rs30 billion from the consumers on this account in the current financial year.
During the visit of Iranian team, a proposal that Pakistani and Iranian companies form a joint venture to lay the pipeline will also be discussed. Sources say the cost of the project will come down if local companies participate in construction of the pipeline from the Iranian border.
German-based firm ILF has already completed detailed engineering design of the project and according to the interim feasibility report, the cost of the project will be in the range of $1.2 to $1.5 billion.
Iran has also offered to lay Pakistan’s side of the pipeline following reports about difficulties being faced by Islamabad in raising funds. China and Russia had earlier committed to financing the pipeline if they were awarded the construction contract without bidding, but no progress could be made apparently due to US opposition.
The pipeline, if completed by December 2014, will bring 750 million cubic feet of gas per day to energy-deficient Pakistan. The supply can be enhanced to 1 billion cubic feet per day.
The two countries will also discuss how to clear the outstanding amount for power import from Iran. Additional import of 100 megawatts will also come up for discussion.
Pakistan and Iran have already signed a memorandum of understanding (MoU) for supply of 1,000MW. Under this project, Iran will build a powerhouse in its Zahedan province bordering Pakistan to generate electricity and has also expressed its willingness to provide $800 to $900 million for the project. A 700km transmission line of 500 kilovolts will be laid from the Pak-Iran border to Quetta.
Iran has also expressed interest in setting up a 200MW power plant in Balochistan near the border. In addition to it, Iran is keen on installing smaller plants of 25MW on the ground as well as on barges to help Pakistan overcome the power crisis.
Published in The Express Tribune, November 10th, 2012.
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ