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India baulks at Iran pipeline proposal

New Delhi, Aug. 3: Iran today proposed signing a memorandum of understanding (MoU) with India for setting a timeframe for the implementation of the $7.4-billion Iran-Pakistan-India gas pipeline. However, New Delhi appeared unwilling to enter into such an agreement until its security concerns are addressed.

“We have proposed an MoU to have a clear timeframe between the seller and buyer,” said National Iranian Gas Export Co (NIGEC) managing director R. Javadi. He is here for the joint working-group meeting.

Iran has already inked a similar agreement with Pakistan. It wants the project structure to be in place by the end of December, followed by the implementation mechanism and project-financing model ready by April so as to begin work on the pipeline by the second half of 2006.

India wants the project to be structured in such a manner so that its concerns over the safety of the pipeline and delivery of the gas are adequately addressed.

A senior petroleum ministry official said, “We already have an agreement between NIGEC, Gail and Indian Oil. Most of the points proposed in the MoU have been covered in the agreement.”

Iranian deputy oil minister Nejad Hosseinian said security issues would be discussed at the joint working-group meeting. “Security has been an issue. We have discussed it before and different groups are working on it.”

Cornered by the West, Iran is keen to tap the huge Indian market for its abundant supplies of natural gas and Pakistan stands to gain, as it will get a hefty transmission fee for allowing the pipeline to pass through its territory.

However, India faces the risk of sabotage in the gas supply, which would hit power units using the energy. Moreover, periodic disruption in power supply would completely dislocate the industries dependent on this electricity.

The rise in Pakistan-sponsored terrorism in Jammu and Kashmir and the anti-India utterances of President Pervez Musharraf are factors, which will have to be kept in mind before New Delhi can rush into the pipeline project.

The US is also opposed to the pipeline as it has branded Iran a rogue nuclear state and wants it to be economically isolated. Although the India has been denying the US pressure, the fact is that Washington’s concerns on the issue cannot be easily ignored.

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