ISLAMABAD: Federal government has sought relaxation from the US administration on Iran-Pakistan (IP) Gas Pipeline Project to avoid a penalty of $18 billion in case the work is not completed by March 2024, a parliamentary panel was informed on Wednesday.
In a Public Accounts Committee (PAC) meeting on the examination of Audit Report 2021-22 of the Ministry of Energy (Petroleum Division), Secretary Petroleum Captain Muhammad Mahmood (retd) briefed the committee members on progress being made on the IP Gas Pipeline. Noor Alam Khan chaired the meeting.
He said the Petroleum Division held two separate meetings with the US Ambassador to Pakistan recently and briefed him on the status of the IP Gas Pipeline and the penalty of $18 billion in case Pakistan not completes the project by March 2024. The secretary said that he had conveyed to the ambassador, “Either allow us to complete the project or pay the penalty”.
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The committee directed the Foreign Ministry to call the US ambassador and discussed the gas sale purchase agreement inked between Pakistan and Iran.
Secretary further said that a delegation from Turkmenistan was scheduled to visit Pakistan in mid-March to discuss the unresolved issues in Turkmenistan-Afghanistan-Pakistan-India (TAPI) Pipeline Project. Declining the Member Committee Mushahid Hussain remarked that Turkmenistan blamed a slow response of the present government on the TAPI, secretary said it was correct that the federal government rescheduled their visit but it was committed to completing the project.
He further said that the main reason was a lack of Afghan authorities’ assurance of safety and security of the pipeline and commitment to keep providing in the future in case of regime change.
Member Committee Saleem Mandviwalla said that why the government was reluctant to talk with the US administration on gas pipeline projects. Citing example of India, he said India was importing discounted oil from Russia and Iran despite sanctions and why Pakistan could not do so.
Secretary said that the federal government has to generate $3 billion equity for $10 billion of the TAPI Project. The ministry did not receive any amount out of total Rs322 billion gas infrastructure development cess (GIDC) collected so far.
The committee directed the Finance Division to provide details of Rs322 billion GIDC and reasons not to deposit in Petroleum Division for national and local gas pipelines under the GIDC Act.
Member Committee Mohsin Aziz said that a governmental committee was constituted to identify the entities which did not pass on the GIDC to the masses. He maintained those should be declared defaulters and subject of recoveries. “Government entities declare in their books GIDC as receivables to cover their financial losses”, he added.
The chairman committee also directed the secretary Interior Ministry to provide details on excluding owners’ names of Byco Petroleum Ltd of Rs54 billion defaulter and Hascol Petroleum Ltd from ECL. He declined the request of Secretary Petroleum to share information in one to one meeting on the subject.
Responding to a question, he said that the moratorium on new gas schemes and suspended schemes were lifted and they would be completed by end December 2023.
Copyright Business Recorder, 2023