Iran-Pakistan-Afghanistan triangular connectivity

Finally Pak-Iran pipeline project inauguratedAsif Haroon Raja

During the Reza Shah Pahlavi era in Iran from 1953 to March 1979, Iran-Pakistan relations were extraordinarily warm. Iran supported Kashmir cause, extended military support during 1965 Indo-Pak war and full diplomatic support in the 1971 war with India. Iran helped in quashing 1973 insurgency in Balochistan. After Shah’s departure, certain events like Islamic revolution in Iran, Jihad against Soviets in Afghanistan, Pakistan’s friendly ties with the US, Saudi Arabia, and Afghan Taliban created hiccups in Iran-Pakistan bilateral relations owing to differing perceptions. After a long period of unease, bilateral relations have returned to normalcy. President Hassan Rouhani soon after taking over stated that he will strive to enhance relations with neighboring States, particularly Pakistan. Issue of gas pipeline project, which is also termed as harbinger of peace needs to be delved upon.

Discussion on Iran-Pakistan (IP) gas pipeline project started in 1994 and a preliminary agreement was signed in 1995. The agreement foresaw construction of pipeline from Pars gas field to Karachi. Later, Iran proposed extending the project to India and signed an agreement with India in 1999. In April 2008, Iran expressed interest in China’s participation in the gas project. In 2009, India withdrew from the project over pricing and security issues after it signed civilian nuclear deal with USA in 2008. In January 2010, the US asked Pakistan to abandon the project and offered assistance for construction of a liquefied natural gas terminal and importing electricity from Tajikistan through Afghanistan. However, on March 16, 2010, Pakistan and Iran signed agreement in Ankara. In July 2011, Iran announced it had completed its section of pipeline and told Pakistan to complete its obligation by December 2014 or else pay daily penalty of one million dollars to Iran until completion.

On April 15, 2012, reportedly Saudi Arabia offered an alternative package to Pakistan if it abandoned IP project. On September 4, 2012, it was announced that the IP project will start before October 2012 and completed by December 2014. On March 11, 2013, Presidents Zardari and Mahmoud Ahmadinejad inaugurated laying of Pakistan’s segment of pipeline. The pipeline was to be completed in 22 months with Iran’s assistance. The pipeline originates from Aalouyeh to Bandar Abbas and then to Iranshahr within Iranian Territory. From there, it will cross into Pakistan. Length of pipeline from crossing point near Khuzdar to Sui and Nawabshah is 785 km and the total cost of the project comes to $7.5 billion. The gas from Iran will cost Pakistan $11 per mmbtu compared to $13 through Turkmenistan-Afghanistan-Pakistan-India (TAPI) project and $18 of imported LNG.

When Pakistan expressed its inability to complete its portion of the project due to acute financial crunch, Iran offered to extend loan for the purpose. But by that time PML-N government took over the reins of the country and in Iran Hassan Rouhani replaced Ahmadinejad. Scared by US sanctions about which Hillary Clinton had given a clear hint, Pakistan started dilly dallying and giving contradictory statements. While Minister Asif Khawaja stated on 11 November 2013 that completion of the gas pipeline project was a contractual obligation, Finance Minister Ishaq Dar said on 13th that Tehran was backing out of the project by not providing required funds. Issue of pricing was raised, while some said it was technically and financially not feasible. Asking for funds was in fact a stalling tactic. Finding that Pakistan was hemming and hawing because of the US and Saudi pressure, Iran too lost interest and expressed its inability to extend promised loan on account of its weak financial position. Iran would not have regretted had Pakistan’s keenness on IP project not waned. The project was thus consigned to the back burner.

On the advice of USA, Pakistan started to actively pursue long-term TAPI project, the commissioning of which was entirely dependent upon return of peaceful conditions in Afghanistan. The ‘New Silk Route’ is designed to facilitate India to consolidate its presence in Afghanistan and to further extend its influence in Central Asia by using transit routes of Pakistan. Making a rational assessment about the obtaining volatile security situation in Afghanistan, possibility of peace returning in the war-torn country even after the departure of ISAF in December 2014 is slim. Peace can return only if a political settlement is arrived at with the cooperation of the Taliban and not otherwise.

Pakistan faces huge deficit of over 2.5 billion cubic feet per day as its production stands at 4.2 billion cubic feet. Energy starvation has led to innumerable problems for Pakistan. Since 2008, the people are suffering the pains of power and gas outages and industries are closing down and businessmen are shifting to other countries. Provision of Rs 500 billion to pay off circular debt by the incoming government helped in providing temporary relief to the people but the one-time measure was a drop in the ocean and it didn’t cure the disease. Pakistan needs a quick- time and not a long-term remedy to overcome its energy crisis. Pakistan needs uninterrupted oil and gas supplies to meet domestic needs and to keep the economic engines running.

Rather than opting for dicey TAPI project, Pakistan should have availed the golden opportunity presented by next door Iran with both hands since it was secure and quicker to meet the immediate requirements of energy shortfalls. Once the envisioned IP project is commissioned, the pipeline will inject 750 mm cfd gas into Pakistan system. Pakistan could have considered abandoning this project had the US offered civil nuclear deal similar to the one granted to India, or offered viable energy alternatives. Commissioning of IP project at a time when Iran was isolated and under duress and urgently needed an outlet to sell its gas would have helped in further cementing Pakistan’s brotherly ties with Iran. Forging special ties with Iran, which is the vital backyard of Pakistan, is otherwise of high significance for Pakistan when seen in the backdrop of soured relations with India and Afghanistan and dangerous designs of the duo to encircle and isolate Pakistan.

Our leaders couldn’t foresee the fast changing scenario in the aftermath of regime change in Iran and Washington’s efforts to woo the new leadership which was more amenable to the friendly gestures made by the west. In the wake of Iran’s interim nuclear agreement with P5+1 in Geneva on November 24, 2013, Pakistan and Iran have begun to fast track their discussions on the ignored project. Pakistan is likely to renegotiate gas prices and completion date and Iran seems amenable to both.

Iran-Pakistan connectivity is a geo-strategic compulsion for both and hence their destinies are intertwined. IP project has the potential to further cement Iran-Pakistan relations. Pakistan should make efforts to extend the project to India as well as to China to accrue maximum financial benefits from it through transit fee. Grant of land access to India, enabling it to transport goods to Afghanistan and Central Asia should be linked with Iran-Pakistan-India gas pipeline project. These inter-dependent linkages together with envisaged Kashgar-Gawadar road/rail corridor will keep Pakistan within the regional loop and will restrain India from applying Chankyan tactics to harm Pakistan’s interests.

Chahbahar Port should not cause Pakistan undue anxiety. Gawadar Port should be complementing rather than vying to substitute Chahbahar. Likewise, Pakistan’s influence in eastern and southern Afghanistan should complement Iran’s influence in western Afghanistan and over Northern Alliance and Hazara community. Both should conjointly work to clear up the logjam in Afghanistan and play a constructive role in establishing a broad based government in Kabul before the departure of ISAF. In fact emergence of triangular relationship between Afghanistan-Pakistan-Iran backed by USA, China and Russia will bring lasting stability in the region. Collectivization, rather than opting for solo flight as in the case of India, will help in eradicating terrorism; overcoming poverty, bringing prosperity and promoting regional harmony.

The writer is a retired Brig, defence analyst, columnist and author of several books.

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