Pakistan seeking loan for Iran-Pakistan gas pipeline

At present Pakistan is suffering from two contentious problems: 1) precarious balance of payment position and 2) acute shortage of electricity and gas. The recent agreement with the International Monetary Fund (IMF) for US$6.6 billion has not brought any respite. Despite receiving the first tranche of US$544 million the Government of Pakistan (GoP) has to borrow another US$625 million for one year at LIBOR plus 5.3% from the local and international banks, lending were demanding LIBOR plus 7.77% initially.

Disbarment of US$1.00 billion (to clear circular debt) among the companies belonging to energy chain was likely to add about 1,700MW electricity as against prevailing shortfall of about 4,000MW. The most disturbing fact is that circular debt amounting to US$20 million has again piled up within a very short span of time. 

The harsh reality is that the country has total installed capacity of around 24,000MW but actual generation hovers less than 16,000MW, mainly because of inability of power generation companies to buy fuel. Persistent increase in electricity tariff is becoming punitive because of running of power plants on furnace oil.

One of the recent announcements is that in Punjab, where 65% of Pakistan’s total population lives, all the CNG stations will remain closed for three months, starting 1st November 2013. Along with this, fertilizer plants getting gas from SSGC and SNGPL networks will face 60-days mandatory closure. Even those fertilizer plants getting gas from Mari gas field will face 20% curtailment in gas supply.

With rising crude oil prices, hovering around US$110/barrel, oil import bill is becoming unsustainable for Pakistan. Even the IMF package will not be enough to pay for additional oil import bill in winter.  In the prevailing scenario Pakistan has two options: 1) switchover thermal power plants to coal from furnace oil and 2) make earliest arrangement for the import of gas from Iran.

One of the problems is that multilateral financial institutions are not willing to finance Iran-Pakistan gas pipeline project due to pressure from the United States. In the prevailing scenario Pakistan will have to mobilize US$2 billion to complete the portion of gas pipeline in  its own area, Iran has already completed its portion and has also offered Pakistan assistance up to US$250 million.

The GoP has remained reluctant in going ahead with the project. Pakistan is being warned by the United States that if it goes ahead with the pipeline project the country could also face economic sanctions, similar to those imposed on Iran. This hype has been created by those who don’t wish Iran could sell its gas to any country.

The fact is that India is not only one of the biggest buyers of Iranian oil but also constructing Chabahar port in Iran and also connecting roads and railways up to Central Asia, passing through Afghanistan. Besides India, China, Japan and some of the member countries of European Union are also buying Iranian oil, because they have been granted exemption by the United States. Therefore, Pakistan should also seek exemption from the United States for buying gas from Iran.

Mobilizing US$2 billion from the global market should not pose any problem. The GoP should float Sovereign Ijarah Sukuk and offer the pipeline as underlined asset. It must be remembered that Pakistan has to complete its portion of pipeline by end 2014 or will have to pay the penalties.

The advantage of getting gas from Iran via pipeline is that local gas transmission and distribution system is capable of handling this additional load.

One of the apprehensions is that Iran is asking higher price, but it can be renegotiated.

On top of all Pakistan will be buying maximum 500mmcfd gas from Iran as against more than 4,000mmcfd gas produced indigenously. Therefore, the average cost will still be very low as compared to furnace oil.

Let another point be also kept in mind that Pakistan can add another 1,500mmcfd gas by commencing work on a few mega gas fields over the next few years.

To further ease payment pressure Pakistan can enter into a barter agreement with Iran for the payment of gas price, against supply of wheat, rice and edible oil.

At present Pakistani oil refineries are operating far below optimum capacity utilization. Pakistan can refine Iranian oil on ‘job cost basis’ and export white oil products to Iran or any other international buyer, including India and Afghanistan.

The prevailing situation offers opportunity for the international financial institutions, particularly those offering Shariah compliant products and services to explore flotation/management of Sovereign Ijarah Sukuk on behalf of the Government of Pakistan.

Pakistan: Time to Redefine Policy towards India

Indian Prime Minister shut all the doors for negotiation by once again reiterating “Kashmir is an integral part of India and no talks can be held on the issue”. He sounded a typical extremist Hindus who says, “We will not allow another division of India on the basis of religion”. His anti-Pakistan sentiments were at its peak when he said “Pakistan is the epicenter of cross border terrorism”. In fact his speech was aimed at declaring Pakistan a terrorist state.

In the simplest words he said ‘Pakistan is sponsoring terrorism”. This is a big slap on the face of all those Pakistanis who have been signing mantra of ‘Aman Ki Asha’ for years and ignoring that India is being ruled by Hindu extremists, who are adamant at destroying Pakistan for achieving the status of regional super Power. Let this also be kept in mind that the United States is the biggest proponent of this philosophy.

India blames that Pakistan’s foreign policy is being dictated by hawks but worse is the situation in the country which claims to be a secular state and also the biggest democracy of the world. The Indian occupied Kashmir is under the siege of army/law enforcing agencies for decades and people are denied ‘right of self determination’ despite approval of resolution in the United Nations.

In this endeavor India is fully supported by the colonial rulers of yester years. They allowed creation of Bangladesh and division of Indonesia and Sudan on the basis of religion, sponsored change of regime in Iraq, Libya and are supporting rebels in Syria for last two years.

However, they are never tired of appeasing India, only because it is their major trading partner. They are supporting India because it is trying to demolish a country created on the basis of an ideology. There are only two states in the world, Pakistan and Israel that were created on the basis of ideology.

It has been highlighted time and again that Pakistan suffers from internal and external threats. While frontiers can be guarded the embedded enemies are difficult to catch. These perpetrators wear various caps and the worst display of ‘cold blooded mercenaries’ was the attack on the helicopter of Pakistan Army that went to earthquake affected areas to deliver food etc.

TTP is yet another faction of the fascists who is at war with Pakistan Army for years. However, worst is the attitude of those who are still trying to appease the terrorists, telling the government to declare ceasefire unilaterally but not asking the perpetrators that lay down arms is a prerequisite to talk.  

It is also been mention repeatedly that a proxy war is going on in Pakistan. All those adamant at destroying Pakistan have joined hands. The perpetrators may wear different caps but have a common objective, destroy Pakistan.

It is highly regrettable that many Pakistanis, particularly politicians have not been able to distinguish between friends and foes. Especially in case of India all the efforts to restore ‘friendly relations’ have been frustrated by the hawks prevailing over in India. This hawkish attitude is at its maximum when general elections are to be held in India. Often political parties try to solicit vote on the basis of anti-Pakistan stance. 

Pakistan: Ruthless Killers of Baluchistan

A total of six districts, Awaran, Kech, Gwadar, Panjgur, Chaghi and Khuzdar have been affected by the earthquake. The scale of the affected territory is daunting. The enormous destruction of the area can be gauged from the fact that death toll is inching towards 400. However, there are 337,980 people within 100km of the epicenter who could potentially be affected, according to the Global Disaster Alert and Coordination System (GDACS).  

Awaran's population is scattered over an area of more than 21,000 square kilometers. More than 60,000 people live within 50 kilometers of the epicenter, according to the UN disaster agency, mostly in easily collapsible mud homes. Workers were facing difficulties in reaching out to survivors since the communication system has been severely affected by the earthquake.

Attack on helicopter carrying Chairman, National Disaster Management Authority (NDMA), 

 Major General Mohammad Saeed Aleem and Major General Samraiz Salik is not an ordinary incident.  The purpose was to disrupt relief and rescue work and create hurdles in reaching out to earthquake survivors and target security forces engaged in a massive relief and rescue operation in Awaran the worst hit area of Baluchistan.

It has been highlighted repeatedly that the rebels operating in Baluchistan are not local but militants funded by external forces. Critics go to extent of saying that these militants wear various caps, at time they are called ‘Baloch Liberation Army’ and if opportunity comes they become the custodians of rights of Sunnis. However, their sole objective remains causing dent to Pakistan by killing and sabotaging.

They just don’t want exploration and production activities to continue in the province. At times they appear to be working for annexing Baluchistan from Pakistan, as was done in Sudan and Indonesia, oil and gas rich areas were annex from these two countries. The games continued for a decade in Iraq and being played in Syria for the last two years.

One can also take cue from whatever has been happening in Northern areas of Pakistan, the fight is only to get control over reserves of precious stones and metals and oil and gas. These agents have been creating havoc only because if mining of minerals, oil and gas start in these areas all the economic woes of Pakistan will be over. The supporters of these perpetrators want to weaken Pakistan and present India as ‘Regional Super Power’.

It is not a secret that the United States is the biggest proponent and wants to create Indian hegemony in the regional. Experts say that now the United States ‘outsources’ the job. If British Prime Minister Toney Blair was used as ‘mouthpiece, for creating justification for attack on Iraq, France is playing the most active role mobilizing public opinion for attack on Syria, it may be other thing that other stakeholders of the region have been frustrating these efforts.

One of the conspiracy theories is that the five countries on the US ‘hit list’ include Syria, Iran and Pakistan. Assad’s government in Syria would have been toppled in few days had other stakeholders of the region not posed such a massive resistance. 

 If Syria is the biggest thorn in the creation of Israeli hegemony in the Middle East, getting control over sea trade passing trough Indian Ocean and creation of military camps around Iran is not possible without creation of an Independent  Baluchistan.

Pakistan: PTI or Devil’s Advocate

 Although, some of the political parties appear to be sympathizers of Taliban and its offshoot Teherik-e-Taliban Pakistan (TTP) but of lately Pakistan Therik-e-Insaf (PTI) has emerged as the Devil’s advocate. This is not an allegation but an inference drawn from the latest statement of Imran Khan, Chairman PTI given at Peshawar while talking to media. 

As reported in media Imran Khan urged the government to declare ceasefire if it was serious about holding peace talks with militants in Pakistan. PTI chief also called on the government to allow militants to open up office in Pakistan, similar to the Afghan Taliban office in Qatar to facilitate the dialogue process.

Khan said that on one hand, there were talks of holding negotiations but on the other hand war was still ongoing. He asked how it would be possible to hold peace talks without the ceasefire. He also said that after the fourth All Parties Conference (APC), it was decided to hold peace talks; however no initiative has been taken as yet.

While talking about Peshawar church bombing which killed 81 people, Khan alleged that the tragedy had been politicized. He said 170 blasts had taken place in Khyber Pakhtunkhwa in the past nine years under previous governments, but PTI had not politicized those tragedies.

To put the record straight it is necessary to bring it to the notice of PTI Chairman that during the election campaign while ANP, MQM and PPP meetings were attacked by TTP for supporting the war on terror, the banned outfit spared PML-N and PTI.

Now these two political parties are vehemently pleading negotiation with the terrorist outfits. Strangely, the government is being asked to stop operation against the perpetrators who take pride in claiming responsibility of killing of innocent people, soldiers and officers of Pakistan Army and other law enforcing agencies, sabotaging and destroying sensitive installations.

One completely fails to understand logic behind Imran’s demand of allowing the terrorists to open office in Pakistan. It seems completely insane because TTP is a banned outfit; it had killed thousands of innocent citizens, personnel of security forces and also caused enormous damage to sensitive installation, including Mehran Naval Base in Karachi, where aircrafts responsible for the surveillance of coastal line were destroyed.

The prerequisite for negotiations with any group at war with the government is that it lays down weapons and stop killing innocent people and attacking personnel of law enforcing agencies.  It seems PML-N and PTI are begging the terrorist to come to negotiation table rather than telling them categorically that ‘talks can’t be held unless these banned outfits lay down arms’. These two political parties are constantly ignoring messages coming from TTP, which claims to be at war with Pakistan Army.

Keeping in view the recent happenings in Syria one is often forced to draw the conclusion that the militants at war with Pakistan Army are being funded, supplied the most lethal weapons and also given training to use these are supported by ‘Enemies of Pakistan’. The sole purpose of these perpetrators is to weaken Pakistan economically and plunge the country into anarchy.

The perpetrators are killing people in the name of Islam but are not attacking occupying forces in Afghanistan. In fact they have become accomplice of CIA by creating a justification for prolonging stay of Nato troops in Afghanistan.

By weakening Pakistan they are also facilitating India in the creation of its hegemony in the region. The United States in the biggest proponent of granting India status of ‘Regional Super Power’. This objective can’t be achieved without causing serious dent to Pakistan.