The Hindu Business Line : Gas pipeline: Optimism not misplaced

NO DOUBT, there are several elements of risk in laying pipelines on land across countries that are in a state of political flux or where political developments may take an unexpected turn. But the proposed Iran-Pakistan-India gas pipeline need not remain a mere pipedream if the irrepressible Petroleum Minister, Mr Mani Shankar Aiyar, keeps up his missionary zeal to see the project through.

The three governments involved might be in a position to decide on the project structure and related technical, financial and legal aspects of the project, the Minister said in the Lok Sabha, on Thursday.

Responding to questions on the subject during Question Hour, the Minister said that there was no "pressure" from the US, even as he confirmed that two senior officials of the US administration had expressed their reservation over the project.

He said the Government's discussion with Iran and Pakistan on the details of the project was progressing "satisfactorily".

"The question of the Iran-Pakistan-India pipeline has not been officially raised with us by the US authorities," he said. He maintained that "the US officials have stated publicly that the US position on India's energy requirements is constructive."

The first meeting of the India-Pakistan Joint Working Group was held in the New Delhi earlier this month, with both sides emphasising their "serious commitment" to address various issues relating to the project and agreeing on the key issue of appointing their respective financial advisory consortia toadvise on the project structure and related technical, financial, commercial and legal maters.

Mr Aiyar said the meeting of the India-Iran Special Joint Working Group was likely to be held in New Delhi early next month. He added that an Iranian technical-level delegation had visited New Delhi last month and had made a presentation on the technical and commercial aspects of the project.

When the BJP leader Mr V. K. Malhotra drew attention to the Prime Minister, Dr Manmohan Singh's reservations over the pipeline projects during his recent US visit and wondered how the project would be implemented, Mr Aiyar said that the Prime Minister's interview in the US needed to be studied in the context as he had "placed all issues in perspective in the totality of circumstances".

The Minister said that the proposed project would entail capital expenditure of $7 billion. While the three countries had enough foreign exchange reserves to finance it, he said the preferred route was to go ahead with a bank consortium to execute the project. The Minister said that he was confident that "we will be able to negotiate successfully and complete the project".

Considering that the US has on its statute book the Iran Libya Sanctions Act since 1996, in spite of which the multinationals did brisk business with Iran in the interregnum, the Minister's optimism about the project coming through is not altogether misplaced, provided of course, the geopolitical realities and bonhomie among the stakeholders persist.

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