Proverbs be damned, lets count our chicken. It is very tempting to entertain hopes that the global deal with Iran will result in the revival of the Iran-Pakistan-India (IPI) gas pipeline project. Every news report in India about the deal with Iran mentions the sighting of the IPI on the horizon. Yet, it actually remains a mirage.

Of the two gas pipelines — the Iran-Pakistan-India (IPI) and the Turkmenistan-Afghanistan-Pakistan-India (TAPI) — it is the latter that looked more difficult. The two are not in race as there is room (and need) for both. From the Indian perspective, the IPI passes through one ‘difficult’ country — Pakistan — but TAPI via two, including Afghanistan. Yet, it is the TAPI that looks closer to reality.

The reason could be that TAPI is backed by the US to keep Iran out of the oil business. According to former Petroleum Minister Mani Shankar Aiyar, the US never pressured India to drop the IPI. Yet, New Delhi decided to back-pedal on the project as it saw a stumbling block in the Iran Libya Sanctions Act, though the law has never been invoked. Due to Iran’s isolation, the IPI lost its appeal.

Ground realities

The geopolitics has changed, yet the IPI pipeline doesn’t look like it’s happening. The pipeline passes through more of Pakistan than does TAPI; it runs through the troubled province of Baluchistan. (Some Baluchs feel discriminated against by the Punjabi-dominated administration in Islamabad and are even demanding an independent state.) Pakistan alleges that India covertly supports Baluch insurgents, which New Delhi denies. In a recent chat, a former Indian diplomat that a Baluch insurgent leader once gave India a friendly advice to “keep away” from the pipeline project.

Pakistan’s dilemma is that the Iranian section of the pipeline (over 900 km) is mostly complete, but no work has happened on the 780-km segment on its own soil. (Incidentally, Pakistan must pay Iran a $3-million-a-day penalty if its part of the pipeline is not completed by the December 2014 deadline.)

Pakistan’s problem is fundamentally financing the project though there are other issues as well. The recent nuclear deal with Iran might just make funding a wee bit easier, but other factors are in play. For example, Saudi Arabia is not happy about any Pakistan-Iran links. Riyadh has already expressed displeasure over the West’s nuclear deal with Iran. Pakistan’s Prime Minister Nawaz Sharif has close links to Saudi Arabia, where he spent eight years in exile. India would for sure want a guarantee against disruption of gas supplies, with penalties for stoppage. But Pakistan will find it difficult to vouchsafe this given the troubles it faces in Baluchistan.

On the other hand, things are not as muddled on the TAPI front. The pipeline’s route falls in the Taliban strongholds in Afghanistan as also parts of Baluchistan. However, there are two counterweights. One, India enjoys goodwill in Afghanistan. India has built roads, schools and power transmission lines and even the Parliament building. “India’s aid programme to Afghanistan is incredible,” says G. Parthasarathy, a former High Commissioner to Pakistan.

“My Pakistani friends joke that when they go to Afghanistan they introduce themselves as Indians,” he says. Second, Pakistan has tacit equations with the Taliban.

Since Pakistan needs the TAPI gas as much as India, Islamabad may be be able to prevail upon the Taliban to desist from playing the spoilsport.

ramesh.m@thehindu.co.in

(This article was published on November 29, 2013)
XThese are links to The Hindu Business Line suggested by Outbrain, which may or may not be relevant to the other content on this page. You can read Outbrain's privacy and cookie policy here.