Pak-Iran gas pipeline project
ECC forms committee to explore funding options
* Approves Rs 6.1bn for repair of Pakistan Railways locomotives
* Allows sale of 0.45 million tonnes of wheat to local millers
By Sajid Chaudhry
ISLAMABAD: The Economic Coordination Committee (ECC) of the cabinet on Tuesday discussed four options to finance the Iran-Pakistan gas pipeline project and constituted a six-member committee to propose the best option.
Pakistan needs $1.2 billion to lay the pipeline on its side of the border and for the connectivity network. The ECC, which met under the chairmanship of Finance Minister Dr Abdul Hafeez Shaikh, discussed at length different options proposed by the Ministry of Petroleum regarding financial arrangements for the gas pipeline project. The ministry informed the committee that the Industrial and Commercial Bank of China (ICBC) and Habib Bank of Pakistan (HBL) were not showing much interest in financing the project, therefore the ECC may go for other options.
The options proposed by the ministry were: 1) Funding through gas infrastructure development cess. 2) Contract execution with second consortium with other companies. 3) Government-to-government arrangements with the government of China and/or Russia to fund the complete project. 4) Government-to-government arrangement with Iran. The ECC discussed each option in detail and formed a committee comprising ministers for petroleum and natural resources, and water and power, SBP governor, secretaries of Economic Affairs Division, petroleum and finance, and Planning Commission deputy chairman.
Besides setting up of various committees on the items moved by different divisions for deliberations, the ECC approved the grant of Rs 6.1 billion to Pakistan Railways for the repair of 96 locomotives. It also decided to allow sale of 0.45 million tonnes of wheat to private parties from the total surplus of one million tonne.