Monday, February 4, 2013

IP gas pipeline: Why now?

The Cabinet formally approved the agreement to construct the Iran-Pakistan (IP) gas pipeline and set up a ministerial committee to explore avenues for arranging $1.5 billion required for the project's implementation. Two major objections to the approval are apparent. First and foremost the government ministers continue to minimise US opposition to the IP gas pipeline and maintain that US sanctions against Iran are not binding on Pakistan. The United Nations sanctions, they further maintain, are binding but as they have not been imposed on Iran due to opposition in the Security Council by Russia and China, Pakistan can safely proceed with the project. This is factually correct; however, the Unites States extends considerable civilian and military assistance to Pakistan and it has made it clear to the government that any attempt to construct the IP pipeline would automatically lead to sanctions. The then US Secretary of State, Hillary Clinton, explicitly warned Pakistan in March of 2012 when she appeared before the House Appropriations Subcommittee on State and Foreign Operations that implementation of the Iran-Pakistan gas pipeline project would automatically trigger US sanctions under the Iran Sanctions Act. She also noted that these reservations have been conveyed to Pakistan. In short there is no ambiguity that the sanctions would be levied in case Pakistan begins to lay the pipeline. At risk would not only be the US assistance which is considerable, including an additional 250 million dollars for the construction of the Diamer-Bhasha dam as a form of compensation for not building the IP gas pipeline but also assistance from the Friends of Development Pakistan consisting of countries on whom the US has considerable influence. Secondly; the government is less than six weeks away from completing its full five year tenure and the question is why did it wait for the last few weeks before signing a binding agreement with Iran? This sets an unfortunate precedence which one hopes would deter the ministerial committee from signing any binding agreement. Additionally, in the context of this particular project, it is unlikely that the ministerial committee would be able to generate the resources necessary to construct the pipeline. A much better option to deal with the massive energy crisis in Pakistan would have been to develop Thar coal for which donor assistance would have been relatively much simpler to procure. It is difficult to comprehend why the government with an overwhelming majority in Sindh province failed to develop Thar coal in spite of repeated promises that this was a priority project.

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