By Naresh Minocha
There are hardly any takers in the Mani Shankar Aiyar'soil & gas empire for the India'ssecurity concerns over the proposed Iran-Pakistan-India (IPI) gas pipeline. This in spite of the fact that both National Security Council (NSC) and Ministry of External Affairs (MEA) have underscored the primacy of security concerns.
Independent experts monitoring the progress on IPI project say that there are two most important issues that must be answered categorically before signing any bilateral or trilateral agreement.
First, are Pakistan and Iran willing to bear the full cost of economic crisis and social unrest in India that would result from prolonged and repeated disruptions in gas supplies triggered by terrorist attacks? If so, how would this compensation be paid under a fool-proof mechanism? Can these countries give international bank guarantees equivalent to the value of three years? production loss that might be suffered by gas-based industries in India?
Will Iran and Pakistan agree to automatic draw-down of these guarantees in proportion to the production losses as well simultaneously replenish the guarantees?
Second, experience shows that both Pakistan and Iran have backtracked on bilateral agreements they signed with India following the change in governments. How can India secure a financial guarantee against either of the two countries reneging on their commitments to smooth operation of the pipeline? And who on the earth will give this multi-billion dollar guarantee-the United Nations or the United States?
Iran-Pak-India gas pipeline – a surefire path towards socio-economic catastrophe.
Remember, what happened to Indo-Iranian friendship mascot-Kudremukh Iron Ore Company Limited (KIOCL). When the anti-American Islamic fundamentalists captured power in 1979 by uprooting Shah Reza Pehlavi, the successor government in Iran trashed Indian sentiments by reneging on bilateral agreements underlying KIOCL.
KIOCL was established as 100 per cent export-oriented unit in mid-seventies solely to supply 75 lakh tonnes per annum of ore concentrates to Iranian steel mills under a 21-year contract.
Iran stopped loan disbursement to KIOCL after providing $255 million out of the $630- million aid. The Indian government, however, bridged this shortfall by helping KIOCL to complete the project in 1980 as per the deadline. Iran did not accept any shipment of concentrate for about ten years. The first shipment to Iran under the revised contract was made in January 1990.
Take now the case of Pakistan. Has Pakistan honoured the most sacred principle of international trade that each nation would grant another the most favoured nation status as provided for by World Trade Organisation?
Instead of first addressing the core issues, the Ministry of Petroluem and Natural Gas (MOPNG) has been ridiculing security concerns by harping on international experiences in uninterrupted gas supplies from Soviet Union to Europe during the Cold War.
If one requires any proof of the marginalisation of security issues, one can read the voluminous tender documents issued by GAIL for appointment of technical and legal consultants for the pipeline project at the behest of MOPNG.
The security concerns find a routine reference in the tender document for appointment of technical consultant. And this issue is also specifically sought to be addressed from the standpoint of Pakistan and Iran!
In a list of six important issues mentioned in the tender document, the relevant issue reads as ?Security concerns of Iran and Pakistan with regard to possible disruption of gas supplies through this pipeline.?
Indian public would hardly know the consultants? recommendations as GAIL has stipulated that the selected consultants would treat all information provided by Indian companies as ?strictly confidential.?
This applies to the contents of the legal tender document referred to as request for qualification (RFQ). The document says confidential information shall include ?the contents of this RFQ document?. Anyone including Al Qaeda members can, however, freely download the tender documents from gailonline.com!
The technical consultant is thus required to undertake pre-feasibility study of the IPI project. The mandate also includes providing certificate that the reserves at Iran'sAssuliyeh Field can produce envisaged quantities of gas over 25-30 years. When basics of demand and supply are not known, how is GAIL claiming that 2100-kilometre-long onland pipeline would have capacity to transport 120 million standard cubic metres per day (MMSCMD) to delivery points in Pakistan and India?
MOPNG is still unclear whether India should participate in IPI pipeline project and just act as buyer of gas from the proposed pipeline joint venture. It is expected to choose between the two options after receipt of reports of three consultants. The third consultant on financial issues has been appointed by Indian Oil Corporation (IOC). Both GAIL and IOC are active members of the Indian consortium that would ultimately participate in the project in different capacities.
(The writer is a senior consulting editor with 25 years experience in oil and gas reporting and analysis.)
MEA, Defence concern
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NSC wants MOPNG to compare the pros and cons of all options to bring Iranian gas to India including import as liquified natural gas (LNG) in special cryogenic ships.
Sources say that the Ministry of External Affairs (MEA) has already restrained MOPNG from making statements that are likely to weaken the country'senergy security. The former believes that statements such as India is facing energy crunch and there is desperate need to import gas undermines the country'sposition on the bargaining table.
Sources quoted MEA as saying: ?We have a variety of options available to us.? These include hydro-electric power, nuclear energy and coal to meet our energy requirements. ?Our aim should be to project a sense of confidence in or ability to meet the energy challenge at terms acceptable to us.?
MEA also does not support MOPNG'sdistorted campaign in favour of IPI project. The former is believed to have categorically stated: ?The Indo-Pak relationship cannot be compared to the East-West Cold War relationship. The level of emotion, passion and potential for tension and disruption is far higher.? (NM)
Gas via Pakistan? They don'teven allow health biscuits from India to reach poor Afghan kids
A report in Indian Express recently by Pranab Dhal Samanta is very revealing. We reproduce the report here.
Here'ssome cold reason for all those passionately plugging the Iran-Pakistan-India gas pipeline: Forget gas, Pakistan is not allowing Indian biscuits to pass its territory, biscuits meant for school children in war-ravaged Afghanistan.
Result: India'sannual supply of 15,000 tonnes of high-protein biscuits, under the UN'sWorld Food Programme, that could have taken just two days to reach the children, now take more than a week. Extra cost: An estimated $5 million (Rs 24 crore) a year.
As of now, 100 grams of Indian biscuits are distributed to each of almost 1.5 million school children daily across Afghanistan, mainly in Kabul, Kandahar and Herat. Ironically, these biscuits are in lieu of one million tonnes of wheat, which India had pledged to send every year but had to withdraw after Islamabad did not allow transit.
Until now, 290,000 tonnes of biscuits, which means over 400,000 tonnes of wheat used, have been transported to Afghanistan. These biscuits are shipped from Mumbai to Bandar Abbas or Chabahar in Iran and then via road through the Iran-Afghanistan border into Herat and Kandahar. A consignment of wheat would not have lasted that long. Until 2008, the first consignment reached in February 2003, when India hopes to finish with the project, sources say, close to $25 million would have been spent on just transport alone. The straight and shortest route is by road through Pakistan via Lahore, Peshawar and Khyber Pass.
India has also raised the issue with Washington hoping that it can lean on Pakistan to reconsider its current policy. Prime Minister Manmohan Singh had himself told US Defence Secretary Donald Rumsfeld about the difficulties being faced because of Pakistan'sposition not to open land transit between New Delhi and Kabul.
The biscuits have proved to be a major success for Indian efforts in Afghanistan: the packets bear a stamp of the Indian Flag, possibly one reason why Pakistan is so reluctant. Kabul is said to have asked for continuing biscuit supplies beyond 2008 but officials said that without proper transit facility, the costs may be difficult to sustain.
It is believed that other donor countries have expressed interest in supplying these biscuits. Not just that: buses and power equipment, too. Of the 400 Tata and Ashok Leyland buses meant for Afghanistan, close to 230 were taken through Pakistan till early 2003. But Islamabad soon denied permission. 170 buses had to be shipped via Iran at an extra cost of about $5000 per bus. The crucial power transmission project from Pul-e-Khumri to light up Kabul is also in doubt. India needs to send 700 pre-fabricated transmission towers to the site by October. If Islamabad doesn'tokay it, it will have to go via Iran leading to delays besides escalating the project cost. Washington is expected to take up the matter with Pakistan given that the US forces helped Indian engineers carry out necessary reconnaissance for the Pul-e-Khumri project.