Iran even offered to finance the pipeline for Pak.
"Iran designated Tadbir Energy to start off work on the project and was also extending a $500 million loan.
Tadbir faces no international sanctions and is controlled by the Imam Khomeini Relief Foundation, one of Iran’s largest charitable groups. It will undertake all engineering, procurement and construction activities in the first phase of the pipeline, which will start from the border and cost around $250 million.
In the second phase, Iran will increase financing by $250 million, but it will hinge on discussions about Tadbir’s involvement in distribution of gas in Pakistan.
Total cost of the pipeline is expected to reach around $1.35 billion. Iran will cough up $500 million whereas the remaining is planned to be generated through the gas infrastructure development cess. The new government will take a decision on the cess, the collection of which has been suspended by the court.
With the US slapping Tehran with a raft of sanctions that have hurt Iranian companies’ ability to do business and created hurdles in making payments to them, Pakistan and Iran drew up a plan to finance the pipeline without the former transferring any funds to the latter.
“Pakistan will not pay Tadbir, instead, the Iranian government will give $500 million to the firm for the construction of the pipeline,” a source said.
The project envisages supply of 750 million cubic feet per day of gas to Pakistan beginning at the end of December 2014 and the fuel will be consumed by power plants to generate around 4,000 megawatts of electricity.
The project’s engineering and management consultant, who was appointed in April 2011, has completed work on a bankable feasibility study, interim front-end engineering design and route reconnaissance survey."
Asks Pakistan to nominate entities to go ahead with the project.
tribune.com.pk
