Pakistan backing out of Iran-India gas project to please US

From M Rama Rao, Asian Tribune:

Pakistan is willing to back out of $7.2 billion Iran-Pakistan-India gas pipeline project in return for US according to Pak parity with India in civilian nuclear technology sector. READ MORE

This raises questions on reliability of Pakistan as a trade partner since both India and Iran have set much in store on the pipeline and the trilateral talks have made some progress already.

Islamabad is undeterred by Washington’s rejection of the request, saying Pakistan’s energy needs are not as pressing as India’s.

Lifting of nuke curbs and assistance to develop civilian nuclear technology to meet recurring power shortages are the highlights of Prime Minister Manmohan Singh’s July end summit with President Bush in Washington.

Pakistan built its first nuclear power station in 1972 with Canadian help, but Western cooperation was later discontinued under US pressure and amid suspicions of a secret Islamic bomb programme. Prime Minister Nawaz Sharif conducted nuclear tests in 1998 and a year later China stepped in to help set up a 300-megawatt nuclear power plant; construction of another plant of identical capacity began six months back.

Bush administration’s reluctance to respond to Pak request is also due to the clandestine nuclear proliferation network created by Pak scientist Abdul Qadeer Khan at the behest of successive Pakistan regimes.

Pak-India parity in civilian nuclear technology is figuring in President Musharraf’s discussions with American leadership on the sidelines of UN General Assembly in New York.

Pak leadership is now using the gas pipeline as a trade off to curry Washington’s favour.

The US has been pressurizing both India and Pakistan to abandon the gas pipeline project. It has primarily to do with American wariness with the Iranian nuclear programme.

The US administration has warned India and Pakistan that the pipeline would invite sanctions, under the Iran-Libya Sanctions Act (ILSA) that empowers the President Bush to clamp punitive measures against any MNC that invests more than $ 20 million a year in Iran’s energy sector.

The US regards Iran as a ``safe heaven for terrorists’’ and also wants to punish it for its current stand off on the nuclear programme.

Give us four 1,000 MW nuclear power reactors to abandon the pipeline, Pakistan has communicated to Bush administration, reports from Islamabad say.

Indian and Pakistani leaders have time and again said the IPI project is in the interest of both countries, but if the US pressure on Pakistan increased, it has plans to seek American cooperation for the installation of the latest nuclear power plants, the reports add.

India-Iran Gas Pipeline will run about 1,115 km in Iran, 705 km in Pakistan and 850 km in India. It is expected to take four –five years to materialize from the date of financial closure.

Pakistan would be required to invest about $ 1 billion as the pipeline would enter into India either from Rahimyar Khan or Multan. However, Pakistan besides meeting its requirements, would earn up to $ 700 million in transit fee every year.

These dividends will pale into insignificance for Musharraf politically, if he can get nuclear power plant parity with India.