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DIPLOMACY: INDO-IRANIAN GAS PROJECT
Peace In Pipeline
India wants to put on Iran the onus of ensuring
safe transit of gas through a turbulent Pakistan
By Shishir Gupta
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| COMING CLOSER: President
Khatami of Iran (left) and A.B. Vajpayee |
Gas pipelines are usually harbingers of economic
progress. But the proposed 2,657-km Indo-Iran gas pipeline is likely to
go beyond commerce. It may emerge as an enduring symbol of peace in the
subcontinent. Although Kashmir is the core issue for Islamabad in the
forthcoming Indo-Pak summit in Agra, the politico-economic dimensions
of an onshore pipeline via Pakistan may well assume centrestage.
If the pre-summit posturing by the foreign ministers
of the two countries is any indication, then Pakistan's strategy will
be to veer India around to agree that Kashmir is a disputed territory,
the "main hurdle" to peace in the subcontinent. As a quid pro
quo, Islamabad perhaps could offer a pull back of troops from the Line
of Control and agree to greater economic cooperation with India. Pakistan
has already indicated its willingness to reduce import duties on a number
of items from India and has offered a corridor for the proposed Indo-Iran
pipeline.
Last week, eight years after India and Iran
signed a memorandum of understanding on the transfer of gas in 1993, the
$6 billion (Rs 28,200 crore) pipeline project got off the ground. At the
fourth Indo-Iran Joint Committee meeting held on June 11-12, Delhi and
Teheran agreed to commission feasibility studies on the transportation
of gas from the Assuliyeh fields in southern Iran to India via land and
deep-sea routes. While the land corridor study has been awarded to Australian
energy major Broken Hill Property, Italian conglomerate Snamprogetti is
exploring the offshore option. Although the final decision still hinges
on the feasibility reports, the onshore pipeline, which traverses 707
km of Pakistani territory, is seen by security analysts here as a confidence
building measure between Delhi and Islamabad.
Evidently, Pakistan needs the pipeline as much
as India does, though for entirely different reasons. The Pakistani economy
is in a shambles and the country is increasingly facing international
isolation for its misadventure in Kargil and support to pan-Islamic fundamentalist
groups. By allowing the pipeline to go through its Baluchistan province,
Pakistan may be able to send a signal that it is not in the clutch of
fundamentalists but is ready to cooperate with its arch rival India. Experts
say that the onshore Indo-Iran gas pipeline may assuage the international
community's security concerns over Pakistan.
It would also give Pakistani President Pervez
Musharraf a chance to project himself as a reformer instead of a dictator.
The state-run TV channel quoted him as saying, "If they (India) don't
want to buy gas cheap, it's their problem. But if they want the pipeline
we are prepared."
An onshore pipeline also makes economic sense
to Islamabad. Pakistan would earn anywhere between $200-400 million per
annum as transit fee from the project. Pakistan is desperate for such
a project after its hopes of participating in an oil pipeline from Turkmenistan
to Karachi via Afghanistan were dashed when the project was put on hold.
Little wonder that Pakistan has told Teheran it is prepared to even extend
sovereign guarantee for the security of the onshore gas pipeline.
Crucial though the project is for India, Delhi
will not discuss it during the forthcoming Agra summit. Rather, it would
leave it to Teheran to work out a bilateral arrangement with Islamabad
to ensure the security of the pipeline through Pakistani territory. Teheran
does not want the pipeline to get bogged down in Indo-Pak politics. In
fact, it wants the project to be handled by a consortium of multinational
companies, including US heavyweight Exxon-Mobil, so that the pipeline
can be put on a fast track.
This move is not without its political overtones.
By involving multinational oil giants, Iran hopes that corporate America
will exert pressure on Washington to ease some of the two-decade-old economic
and political restrictions imposed on it. A number of Indian companies-such
as Reliance Industries which has set up a multi-billion dollar refinery
in Jamnagar in Gujarat-are keen to participate in the onshore pipeline
effort. Pakistan, on its part, has indicated it willingness to go along
with any arrangement acceptable to India and Iran.
Some experts feel that the security threat to
the onshore pipeline in Pakistan is not as serious as India perceives
it to be. Says Lt-General Satish Nambiar, director, United Services Institution:
"It will be a foolish Pakistani leadership that will allow fundamentalist
elements to knock off the pipeline. There is no security threat to pipelines
running through conflict areas in other parts of the world. Of course,
a disruption due to an attack from Taliban-type groups cannot be ruled
out."
Nambiar sees the land option as an expression
of India's confidence in Pakistan but views the project as purely a business
transaction, something that can help boost commercial and economic exchanges
between Delhi and Islamabad. Perhaps this may even make Pakistan extend
most favoured nation status to India.
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