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Russia to help Pakistan build IP gas pipeline

07 April, 2012

ISLAMABAD: Amid severe sanctions on Iran by US and Western countries, Russia has come forward to bail out Pakistan to complete the much-touted Iran-Pakistan gas pipeline and has agreed to fully provide both technical and financial help.

Russia, which had earlier gifted to Pakistan the OGDCL and Pakistan Steel Mills, has now promised to help construct the IP gas line at a time when the consortium, headed by the Industrial and Commercial Bank of China (ICBC), has refused to provide financial advisory services for the gas pipeline project mainly because of US opposition to the project.

In the recent talks, held in Moscow, Russia has given a go ahead signal to Pakistan for completing the project under a government-to-government arrangement. The Russian company Gazprom will arrange finances and construct the pipeline, including the completion of engineering and design of the project.

However, the Russian company is seeking the setting aside of the Public Procurement Regulatory Authority (PPRA)ís rules to complete the mega project for which international bidding is a must as per the PPRA.

"The demands of Russia will be placed in the next ECC meeting, seeking the approval of the demands so that the projects construction could take place as soon as possible," said an official. However, the Ministry of Petroleum and Natural Resources will also seek the approval of the ECC in a cautious move for permission to allow arranging funds for the project from its own resources through infrastructure development.

In case the projectís commissioning gets later than the deadline of December 31, 2004, Pakistan will have to pay $1 million every day to Iran as penalty. "Once the engineering, procurement and construction (EPC) contract is given to the Russian company by putting aside the rules of PPRA, the Russian company will start completing the pipeline of 800km inside Pakistan," the official said.


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