Pakistan behind the scheduled completion of the IP gas pipeline
Saturday, May 12th, 2012 6:47:33 by Wajahat Javed
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Pakistan behind the scheduled completion of the IP gas pipeline
Friday, May 11, 2012: The Iran-Pakistan gas pipeline project is lagging behind its scheduled completion because of finances issues being faced by Pakistan. The country is unable to find
finances for the project, due to rising pressure from America; therefore the project may see a delay of 45 days in its completion.
This is the first time that the government has conceded that the project’s completion faces a delay. The pipeline was originally supposed to commence supply from Iran’s South Pars gas field by the end of December 2014. It now appears
that operations may not start till 2015.
Pakistan and Iran have already signed a sovereign guarantee agreement: if the project is delayed beyond agreed dates, Pakistan will have to pay a penalty to Iran.
Reiterating the government’s stance that it will not abandon the multi-billion dollar project, Secretary Petroleum Ijaz Chaudhry on Thursday claimed that despite delays, the project will be completed on time. He was speaking at
a Public Accounts Committee meeting.
Chaudhry’s comments came within 48 hours of a Pak-China Joint Energy Working Group meeting; wherein Islamabad was unable to secure Chinese financial assistance for the project. Earlier, a consortium led by a Chinese firm backtracked
from its commitment as lead financial advisor for the project. It is believed that mounting pressure from the US to shelve the Iran pipeline project led to its withdrawal.
Ijaz Chaudhry said that a steering committee – comprising ministers for Finance, Foreign Affairs, Privatization, Petroleum and other key officials – last week reviewed progress on the IP project. The committee vowed to push ahead
with the project despite financial and other constraints, he added.
He said that in the absence of foreign assistance, the government will meet financing requirements through a Gas Development Surcharge (GDS). Chaudhry said that for the current fiscal year, the GDS collection target is Rs34 billion;
and so far 80% of the target (Rs27 billion) has been secured. According to media reports, the government is also considering increasing the GDS rate from the coming financial year to raise additional funds.
Pakistan behind the scheduled completion of the IP gas pipeline
Friday, May 11, 2012: The Iran-Pakistan gas pipeline project is lagging behind its scheduled completion because of finances issues being faced by Pakistan. The country is unable to find
finances for the project, due to rising pressure from America; therefore the project may see a delay of 45 days in its completion.
This is the first time that the government has conceded that the project’s completion faces a delay. The pipeline was originally supposed to commence supply from Iran’s South Pars gas field by the end of December 2014. It now appears
that operations may not start till 2015.
Pakistan and Iran have already signed a sovereign guarantee agreement: if the project is delayed beyond agreed dates, Pakistan will have to pay a penalty to Iran.
Reiterating the government’s stance that it will not abandon the multi-billion dollar project, Secretary Petroleum Ijaz Chaudhry on Thursday claimed that despite delays, the project will be completed on time. He was speaking at
a Public Accounts Committee meeting.
Chaudhry’s comments came within 48 hours of a Pak-China Joint Energy Working Group meeting; wherein Islamabad was unable to secure Chinese financial assistance for the project. Earlier, a consortium led by a Chinese firm backtracked
from its commitment as lead financial advisor for the project. It is believed that mounting pressure from the US to shelve the Iran pipeline project led to its withdrawal.
Ijaz Chaudhry said that a steering committee – comprising ministers for Finance, Foreign Affairs, Privatization, Petroleum and other key officials – last week reviewed progress on the IP project. The committee vowed to push ahead
with the project despite financial and other constraints, he added.
He said that in the absence of foreign assistance, the government will meet financing requirements through a Gas Development Surcharge (GDS). Chaudhry said that for the current fiscal year, the GDS collection target is Rs34 billion;
and so far 80% of the target (Rs27 billion) has been secured. According to media reports, the government is also considering increasing the GDS rate from the coming financial year to raise additional funds.
Short URL: https://www.newspakistan.pk/?p=22106
Posted by Wajahat Javed
on May 12 2012. Filed under Business, Pakistan.
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