The Hindu : International / India & World : Aziz hopeful of progress in gas pipeline talks

Online edition of India's National Newspaper
Monday, Oct 25, 2004

International

International - India & World

Aziz hopeful of progress in gas pipeline talks

By B. Muralidhar Reddy

ISLAMABAD, OCT. 24. The Pakistan Prime Minister, Shaukat Aziz, has expressed the hope that there would be "palpable progress" in talks between India and Pakistan in the next 12 months on the gas pipeline project through Pakistan.

In an interview to the Pakistan English daily, Daily Times Mr. Aziz said that one should not expect any immediate breakthrough but move the process along by creating "mutual dependencies".

According to him, the gas project is one such "mutual dependency" because both countries gain from it. At the same time, he said that his priorities were to engage India in a dialogue process on Kashmir while simultaneously working on the gas pipeline project so that the two countries come closer.

The statement of Mr. Aziz comes close on the heels of recent observations by the Pakistan President, Pervez Musharraf, that Pakistan has decided to go ahead with the project irrespective of the inclination of India and an agreement with Iran will be signed in November.

India, Pakistan hostilities

The proposed pipeline has been hanging fire for one and a half decades due to Indo-Pakistan hostilities. Iran floated a proposal for a regional pipeline in 1989, when major oil and gas discoveries were made in its territory, adjoining the Gulf state of Qatar. But discussions for the construction of the $3.5 billion pipeline began in earnest in 1994.

The planned IPI pipeline, termed the "peace pipeline", would be about 2,670 km long. As a transit country, Pakistan would be a beneficiary as it would get royalties amounting to $6 million a year. The IPI pipeline will connect the Assaluyen gas and oil fields in southern Iran to the Hazira-Vijaipur-Jagdishpur (HVJ) pipeline in India, with an intermediate focal point in Multan.

Ever since he took the reins of the country in October 1999, Gen. Musharraf has been an ardent advocate of the pipeline. India has reservations on the safety of the project given the history of hostilities with Pakistan. To allay Indian fears, Pakistan has said it was ready to give any kind of guarantee.

The project gained momentum after the assumption of office by the United Progressive Alliance (UPA) led by the Prime Minister, Manmohan Singh.

It figured prominently at the meeting of the Foreign Ministers of both the countries in New Delhi in early September, as well as the landmark summit between Gen. Musharraf, and Dr. Singh, on September 25, on the sidelines of the United Nations General Assembly session in New York.

Free trade area

India has tied its agreement for the IPI line to the condition that Pakistan grants it the Most Favoured Nation (MFN) status — a condition, unacceptable to Pakistan unless the Kashmir issue is resolved. Instead, Pakistan sees the South Asian Free Trade Area (SAFTA) as an "MFN-plus situation".

This position is also reflected in the September 25 joint statement announced by Gen. Musharraf and Dr. Singh in New York.

"It was felt that such a project could contribute to the welfare and prosperity of the people of both countries and should be considered in the larger context of expanding trade and economic relations between India and Pakistan," the joint press statement said.

In his latest interview, the Pakistan Prime Minister has said, "The best CBM for Pakistan is to engage India in two things — dialogue on Kashmir and progress on the gas pipeline. I really believe in it. When you create a mutual dependency, you open many other doors. Their (the Indians) views may be different than ours. But if we open up a door which is not in the benefit of both the countries then it will not work. I am not saying the pipeline will be installed overnight, but the dialogue will start, at least. We really want to make progress on the Kashmir issue. The dialogue process should move on. And I think this is a realistic approach."

Mr. Aziz said he expected all this to happen in one year if the ongoing process continued with the same spirit.

But he did not see an immediate opening up of the Muzaffarabad-Srinagar road because this issue entailed some "problems".

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