WikiLeaks on Iran-Pakistan gas link pipeline: implementation ''very unlikely''

Leaks of WikiLeaks have not helped improve the prospects of Iranian-Pakistani gas link project as a source in a US embassy cable says that "the Pakistanis don''t have the money to pay for either the pipeline, or the gas."
Marked as "secret," a US embassy in Baku (Azerbaijan) cable dated June 12 2009 has said that interlocutor told Baku Iran Watcher that a source had confided to him in a private conversation on June 4 that he viewed near-term implementation of the Iranian-Pakistani gas link project as "very unlikely."
''Baluchi violence obstructing Pakistan-Iran rail link?''The downbeat comment by the source was made despite the recent signing in Istanbul by President Ahmadinejad and President Zardari of an Iranian-Pakistani memorandum of understanding committing to the gas project. The source indicated that he had several reasons for this opinion, but the only one he elaborated was that "the Pakistanis don''t have the money to pay for either the pipeline, or the gas."
This US embassy Baku cable also includes information on reported increasing security problems in Iranian Balochistan, including alleged disruption of Iran-Pakistan railroad links; a message from a senior GOAJ military official about the dangers of stirring up Iranian minorities; the apparent quadrupling in first quarter 2009 (compared to first quarter 2008) seizures in Azerbaijan of Iranian- transited heroin; and scepticism about Iranian gas export contracts, related by industry participants at the recently-completed Baku Oil and Gas show.
The following are the verbatim excerpts from the cable: Baluchi Violence Obstructing Iran-Pakistan Rail Link?
2. (C) Several Iranian contacts, including apolitical businessmen, have told Baku Iran watcher that the recent suicide bombing of a Sh''ia mosque, and subsequent attack on a campaign center in Zahedan, reflect a surge in Baluchi violence in the border area and inside Pakistan that has been building steadily over several years. According to one source, the Iranian security forces may be losing effective control over growing areas in the countryside. All noted that the rising violence in Iranian Balochistan is mirrored and influenced by similar events on the Pakistani side of the border (recently described in ref(a)).
3. (C) One alleged result is the apparent postponement of completion of the long-planned improved rail link between Pakistan and Iran, designed to run through or near Baluchi territory on both sides of the border. The current rail connection, running between Quetta, Pakistan and Zahedan, Iran is in poor condition and has low freight-carrying capacity. Moreover, according to reports it has recently been repeatedly subject to rocket attacks and other disruption by Baluchi tribes. An improved link also traversing Iranian and Pakistani Baluchi areas was originally supposed to have been inaugurated in March, 2009, with container train service beginning in August. According to Iranian sources in Baku, this deadline is unlikely to be achieved, and regular use of the Iran-Pakistan railway for significant cargo shipment is unlikely in the foreseeable future.
4. (S)[Source removed] quoted the Ministry source as saying that in 2008 Iran asked Pakistan to establish a new, "more secure and modern" route, but that Pakistan has so far refused. The source added that Tehran is rife with rumours about the increasing lack of safety in Baluchi areas, and claimed that many guard and police posts in Sistan-Baluchistan areas are no longer occupied at night due to the increased danger of attack.
5. (C) Another source, [Source removed] blamed the Ahmadinejad administration for pursuing provocative anti-Sunni practices (including harassment of Sunni clergy and congregations and raids on Sunni mosques) and other "arrogant" crackdowns over the last few years. He claimed that these practices, combined with high unemployment, perceived discrimination, and few government services, has increased anger among Baluchis, and identification of the central government as an "enemy." He cited the appointment of Ahmadinejad ally Habibullah Dehmordah as a Governor of Sistan-Baluchistan as a typical insensitive blunder, calling him a "stupid, brutal, Sunni-hater." (Note: Dehmordah was replaced as Governor in 2008 by Ali-Mohammed Azad.
6. (S) At a 12 May meeting with a visiting group of 16 US military general officers, the GOAJ''s Special Assistant to the President for Defence, General Vahid Aliyev, related that he had recently met in Iranian Azerbaijan with (unnamed) high-ranking &Iranian General.8 Although he did not provide details, Aliyev strongly implied that the Iranian General raised alleged "foreign-sponsored" efforts to foment unrest among Iranian ethnic groups, including Iranian Azerbaijanis (who make up nearly thirty percent of the Iranian population). Commenting on this issue, Aliyev asserted that "there have been four attempts by Iranian Azerbaijanis to assert autonomy in the last hundred years, all of which were crushed" by the Iranian state. As an example, Aliyev cited the Soviet effort during World War II to establish a breakaway "Republic of South Azerbaijan." The Soviets forces pulled back in 1946, after a "Truman-Stalin Agreement," which Aliyev depicted as a cynical "betrayal" of collaborating Iranian Azerbaijanis. He recounted that the resulting repression by Tehran resulted in the deaths of 60,000 Azeris, and the flight of many more into Soviet Azerbaijan.
7. (S) US military participants agreed that Aliyev appeared to be implicitly signalling that outside fomenting of unrest in Iranian Azerbaijan is opposed by the GOAJ. Aliyev similarly told the US officers that any foreign war with Iran will be bad for Azerbaijan, and result in a flood of refugees entering the country. (Note: The three other "failed Azerbaijani autonomy struggles" cited by Aliyev presumably refer to the early 20th century Constitutional Revolution, Azerbaijani resistance to Reza Shah''s centralisation policies in the 1920''s, and efforts by senior Azerbaijani clerics and activists to obtain local autonomy in the wake of the Islamic Revolution in 1979.
8. (C) According to [Source removed], export of narcotics from Iran into Azerbaijan continue to skyrocket (see ref b). According to statistics provided to Baku Iran watcher on June 3, 2009 by the UNODC-sponsored counter-narcotics "Central Asian Regional Information and Co-ordination Center" (CARICC) headquarters in Tashkent, Iran-origin heroin seizures (ie, heroin derived from Afghani and Pakistani opium that entered Azerbaijan from Iran) in Azerbaijan nearly quadrupled during the first quarter of 2009, as compared to the first quarter of 2008. According to the GOAJ, virtually all of this heroin had been fully processed in labs and was "ready for market." Total heroin seizures in Azerbaijan during the first quarter of 2008 reflected a sharp increase over the first quarter of 2007; while in 2006 only twenty kilograms of such heroin was officially reported seized in Azerbaijan during the entire year. In contrast, reported GOAJ seizures of Iran-origin heroin during the first quarter of 2009 amounted to nearly 59,000 kilos, as compared to approximately 15,000 kilos of heroin seized in the first quarter of 2008.
Projected Problems in Iranian Gas Links
9. (C) The annual Baku Oil and Gas Show, held June 2-5, brought a variety of energy company executives and pundits to Baku, though no senior officials from Iran. An American interlocutor told Baku Iran Watcher on the side of the show that a [Source removed] had confided to him in a private conversation on June 4 that he viewed near-term implementation of the Iranian-Pakistani gas link project as "very unlikely." The downbeat comment by the [Source removed] was made despite the recent signing in Istanbul by President Ahmadinejad and President Zardari of an Iranian-Pakistani MOU committing to the gas project. According to this source, [Source removed] indicated that he had several reasons for this opinion, but the only one he elaborated was that "the Pakistanis don''t have the money to pay for either the pipeline, or the gas."
10. (C) Meanwhile, during a panel discussion at the conference on the future prospects of Caspian gas, several commentators noted the difficulty of doing business in "unpredictable, overly bureaucratic" Iran, and the alleged historical "unreliability" of Iranian gas supply contracts previously reached with Turkey and Turkmenistan. For example, panellists recounted that, after long negotiations, Iran has four times failed to sign separate Liquid national Gas contracts at the last minute. Two panellists claimed that Iran has repeatedly diverted gas supplies to meet domestic needs, thereby interrupting its contractual gas exports - and has not paid contractual penalties for these violations.
11. (C) A [Source removed] asserted bluntly that Iranian political leaders are totally focused on domestic needs and personal jockeying, and are simply not interested in hearing about the value of optimising foreign gas exports. The only exception, he claimed, is their interest in the notional prospect of annually exporting ten billion cubic meters (bcms) of gas to Europe. He attributed this interest to a conviction that such a deal will significantly increase Iran''s political leverage in Europe and substantially insulate it from future European pressure - a perception he characterised as revealing, and "typically" unrealistic.