We seem to have once again wriggled our way out of incurring any financial penalties for the failure to start off the Iran-Pakistan Gas Pipeline Project. The perennial impasse over the project, which was recommended in the early 2000s, continues to make no sense at all. According the agreement, Pakistan is to pay Iran $1 million a day for failing to lay down its 781 kilometre share of the pipeline by the start of 2015. This means Pakistan owes Iran at least $605 million for its failure to fulfil the terms of the agreement. The only good news is that Iran does not seem keen on actually charging Pakistan the said amount and is showing considerable patience to allow the pipeline to come to fruition. The pipeline is now scheduled to be completed by the end of 2017, by which time the penalty owed by Pakistan will have come close to the actual cost of the pipeline.
The sanctions against Iran have been cited as the reason for the delay in building the pipeline, but those sanctions were in place when the pipeline agreement was being signed. It was a risk Pakistan was willing to take on. If anything, the situation has only gotten better after the slow lifting of the UN sanctions on it. Pakistan, however, appears forever caught in the cycle of renegotiating the terms of the pipeline with Iran. Now, our officials are attempting to change the date of the penalty clause to sometime in the year 2018. The IP Pipeline Project is vital for Pakistan’s future as the country remains energy-deficient. With Pakistan’s gas reserves depleting fast, the constant delays over the pipeline with Iran make no sense. Renegotiating the gas rate with Iran by dangling the spectre of another potential project, Tapi, may not work because Iran by then may no longer feel as ‘benevolent’ as it is right now. We must complete our end of the pipeline so that it can start bringing much-needed gas to Pakistan. Iran’s own failure to complete its side of the pipeline may partly explain its willingness to renegotiate terms, but this cannot be an agreement that remains on paper. Pakistan needs what Iran is offering and the project should not become a costly failure for us. https://www.thenews.com.pk/print/148101-Future-or-failure
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