Indo-Pak talks raise hopes for pipeline project

Monday, 01 March 2004, 20:30 IST
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NEW DELHI: Peace talks between India and Pakistan may have a crucial bearing on what has been termed as the "peace pipeline" to transport Iranian natural gas to India via Pakistan. The multi-billion dollar project has been hanging fire because of India's security concerns about transporting a strategic commodity across a country with which its relations have been hostile. India and Iran have been discussing two options for the project -- an overland pipeline through Pakistan that Tehran backs or a deep-sea pipeline that skirts Pakistani shores. During Prime Minister Atal Bihari Vajpayee's visit to Iran in June 2001, both the countries agreed to have feasibility studies done on a cost-sharing basis on both the options. Indian officials concede that a deep-sea pipeline may not be technically and economically the most feasible. The pipeline project figured prominently during discussions between Iranian National Security Council Secretary Hassan Rowhani and his Indian counterpart Brajesh Mishra here last week. Rowahani said the two countries had agreed to complete the feasibility study in the next few months. "Once the studies are completed we will finalise a decision," he said. The $5 billion gas pipeline project may generate $500 million in annual transit fee for Pakistan if New Delhi agrees to the overland proposal. The 2,670-km pipeline will originate in southern Iran, pass by Pakistan's Multan city and terminate at Bhuj in Gujarat. Iranian authorities estimate a $3.2 billion capital cost for the pipeline that is to run 1,115 km in Iran, 700 km in Pakistan and 850 km in India, with a capacity of 3,260 MCFD (million cubic feet per day). If India continues to have reservations about an overland pipeline through Pakistan, it may opt for transportation via tankers, as it is being done for importing natural gas from Qatar. Teresita Scahffer, a US expert on South Asia, feels there are ways to address India's "legitimate" concerns about a pipeline through Pakistan. It could be modelled along the World Bank-brokered 1960 Indus Waters Treaty, Schaffer told IANS during a visit here. "In principle you could establish some kind of a third-party guarantee role, perhaps using the World Bank in a manner broadly similar to what was done in the Indus Waters Treaty," said Schaffer, director of South Asia at Washington's Centre for Strategic and International Studies (CSIS). The Indus Waters Treaty was signed in 1960 after India and Pakistan began quarrelling over their share of water from the rivers that emanate in the Himalayas and flow to Pakistan via Jammu and Kashmir and Punjab. Prime minister Jawaharalal Nehru of India and president Ayub Khan of Pakistan signed the treaty after negotiations were conducted under the aegis of the World Bank. "I wouldn't say that the pipeline holds the key to prosperity in South Asia, but it certainly could enhance prosperity," Schaffer said. "A pipeline can assist maintaining peace. Look at the Indus Waters Treaty. It's not perfect. But it has never been broken. "Even three years ago, India was seriously considering (revoking it). Ultimately they decided to leave it alone. It has been a success. It has been a success partly because it does require India and Pakistan to interact periodically. "It has created a small island where India-Pakistan relationship is protected. If you had a pipeline it would create another small island," Schaffer maintained. She also suggested another guarantee for the project - an escrow to hold funds in reserves. "In case there are some problems, political or otherwise, any party that interrupts the service will have to pay huge fines to the other participants," she held.
Source: IANS