In the backdrop of the growing chill in relations between Pakistan and Iran, stoked by the recent abduction of Iranian border guards and the apparent foot-dragging by Pakistan in regards to fulfillment of its commitment on IP gas pipeline project, a summit level contact was absolutely necessary to smooth out differences between the two brotherly countries and recalibrate their ties in conformity with the demands of history and the emerging geo-political realities in the region. Viewed from this perspective, the recent visit of Prime Minister Nawaz Sharif to Iran was quite significant and timely. Indications are that both sides have agreed to better border management and improve security measures to ensure that incidents like the abduction of Iranian guards do not recur and enhanced security at the borders leads to increased bilateral trade, which both sides resolved to boost to $5 billion.
The two leaders also agreed to resurrect the IP gas project, which has remained in doldrums ever since it was conceived in 1995 — due to a variety of reasons including financial constraints and unrelenting US pressure on Pakistan to dissuade itself from the venture. It is indeed a very encouraging development in the backdrop of some discouraging signals in the recent past about the project ever taking off.
It is pertinent to mention that the US has been trying to persuade the present government to withdraw from the project by promising help in the energy sector as an alternate to the venture and also supporting the trans-regional projects like CASA-1000 and TAPI. It even used threats of sanctions against Pakistan but the government exhibited rare guts and vision to spurn the combination of lures and threats by the sole super power in the world. The government, by sticking to the project, has also made a healthy break from the unenviable past practice by the new governments to discard and disown the projects initiated by previous regimes. The stance of the government is also in line with the vision and paradigm shift in the conduct of our foreign policy, with greater focus on building regional linkages. Pakistan belongs to South Asian region and its economic prosperity and security is inextricably linked to this region. Any policy divorced from these realities would not be in our long term national interests. Giving due consideration to the geographical realities and historic bonds with the countries of the region reflects pragmatic and realistic thinking. The P5+1 agreement with Iran on its nuclear program and subsequent developments have also contributed to creating a congenial atmosphere for the implementation of the project and both Pakistan and Iran must capitalise on these changed realities for fast-track the implementation of the IP Gas Project.
From amongst the conceived trans-regional projects, only IP gas pipeline is relevant to Pakistan’s situation at the moment. It is not only important for energy-starved Pakistan but also for Iran in terms of showing the world that it was not isolated, more so in its own region. The Pak-Iran gas pipeline is almost indispensable in view of the energy crisis gripping the country at the moment and its future needs. The completion of the project would be instrumental to the addition of 4000 MW of electricity into the system. The Pak-Iran gas pipeline will serve our economic interests for a long time to come besides other benefits that will come through economic integration with the region. It is hoped that in view of the importance of the pipeline for both the countries and their determination to make it a reality, issues such as pricing and availability of the finances for construction of the 781 km section of the pipeline on Pakistani side and extension in the deadline for its completion, would be amicably resolved.
India, which initially was also part of the project known as IPI, withdrew from the venture in view of US opposition to it. However it has been adequately compensated through the signing of the agreement for transfer of civilian nuclear technology to her by US and its allies like UK and France. The US is not prepared to treat Pakistan at par with India with regard to transfer of civilian nuclear technology. Pakistan perforce has to find other avenues and sources for generating power to meet its current and future needs.
China, our time-tested friend, has come to our rescue in this area. It is helping us in building Chashma III and IV and is also engaged in the construction of nine power units in Gilgit-Baltistan and Azad Kashmir, including the Neelum Jhelum Project. Under the China-Pakistan Economic Corridor, China would undertake 16 energy projects with a cumulative production capacity of 20,000 MW. Chinese companies would be making an investment of $6 billion in the power projects in Pakistan over the next five years, especially in the coal-based electricity generating units in which China has exceptional expertise. In addition to this, a nuclear power plant at Karachi with a potential to generate 2200 MW would also be constructed with Chinese help which would be completed by 2017.
At present Pakistan has an installed power generating capacity of nearly 23,000 MW from all sources and according to an IAEA assessment report, power demand in Pakistan will increase to more than 49,000 MW by the year 2025. The PML (N) government therefore is moving in the right direction by giving top priority to tackling the energy crisis and adding new power generating capacity to the system. IP gas pipeline project is surely of immense value with regard to attaining energy-security and kick-starting the process of rehabilitation of the economy.