25 November 2004

'Gas project is win-win for India, Pakistan'

25 November 2004
The Hindu

''Gas project is a win-win for India, Pakistan''

By Siddharth Varadarajan

NEW DELHI, NOV. 24. The proposed pipeline from Iran is a win-win project for both Islamabad and New Delhi but if India does not wish to cooperate, Pakistan is prepared to strike a deal with gas exporting countries for its own domestic energy needs, Pakistan's Prime Minister, Shaukat Aziz, said here on Wednesday.

At a breakfast interaction with Indian editors, Mr. Aziz said he was convinced the pipeline was in India's interest too and that there was no need for Pakistan to grant reverse-transit rights for Indian products to Afghanistan in exchange. "India's economy is growing, you are going to need hydrocarbons... and you need many diverse sources and routes for this energy. Not everything should come through Kandla or the traditional ports."

Pakistan was also short of energy and its economy was growing fast, Mr. Aziz said, "so for us, if we can get Irani or Qatari gas, and there are other sources like Turkmenistan etc, let me tell you, we are going ahead anyway. It has nothing to do with whether India uses this route or doesn't, because it makes economic sense for Pakistan."

"If India is not interested, we're proceeding anyway," Mr. Aziz said. "But if you're going to lay a 12-inch pipe and you may want to do a 24-inch because it has to go beyond it, anybody who'll push the numbers will tell you it makes much more sense to start with a 24-inch pipe. But even a 12-inch pipe is fine. We are negotiating very hard."

At the same time, Mr. Aziz said that if Pakistan and India built the pipeline together, "we create mutual dependencies and linkages... if diplomacy has to succeed, these linkages have to be created." He acknowledged "the how and the mix is very complex and has to be looked at," but said that the pipeline would be a more secure CBM between the two countries than trade. "Trade is not permanent, trade can be switched off or on any time... but once you have a pipeline with international investors — today the financial world has got very sophisticated, there are some excellent techniques for risk mitigation which can protect ourselves and India against the traditional risks which may occur to people who are looking at this issue."

Mr. Aziz said people should not think the pipeline "is a real slam-dunk, or a real big advantage for Pakistan and not for India, or that we are doing this because we see some royalty or transit fees." He said one could add "bells and whistles" to the project "so that we have another prolonged discussion" but that if India and Pakistan were serious "it should be a simple clean process." Otherwise, we can have many task forces and committees to examine this till the cows come home and we won't make any progress."

Asked about India's demand for reverse transit rights to Afghanistan and Iran, Mr. Aziz was non-committal. "Eventually, we can look at transit also," he said. "We do allow inbound transit from Afghanistan to India... But reverse traffic is not allowed. That again can be considered when, in the judgement of the various stakeholders, we feel we are making progress (on Kashmir). This `in tandem' approach has to be clearly understood by all concerned."

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