Islam Times - Pakistan Risks $1.8 Billion Fine for Delay in Iran Gas Pipeline Project

Islam Times - Pakistan may face a penalty of $1.8 billion for failing to complete its share of work on the Iran-Pakistan (IP) gas pipeline project, according to a report by a Pakistani media outlet.

The project, expected to be completed in December 2014, has faced delays on the Pakistani side, leading to a reduction in gas supply from Iran.

The report by the Express Tribune stated that if Pakistan fails to complete its work by June 2022, it may face a fine of $1.8 billion, as per the penalty clause in the agreement between the two countries.

During a meeting of the Public Accounts Committee (PAC) in Pakistan, it was revealed that Rs325 billion were received for gas infrastructure development, but only Rs2 billion were spent.

Members of the committee demanded progress on publicly-funded projects and warned that Pakistan faces fines if the gas pipeline project with Iran is not completed on time.

The Secretary of Petroleum stated that Pakistan has spoken to the United States to request relief, as there is a ban on importing gas from Iran. He also remarked that they have asked the US ambassador to either give them permission to go ahead with the project or give them money to pay the fine.

During the meeting, the committee also asked for records of perks given to retired judges and generals, and for the ban on new gas connections to be lifted.

The PAC directed gas companies to file cases against those involved in gas theft and ordered the audit of all oil refineries to be completed within a month.

In 2009, the Pakistani state-owned gas company and the Iranian gas company signed an agreement under which Pakistan committed to building an 800-kilometer pipeline to the Iranian border. Iran also agreed to build a pipeline to the Pakistani border, which has been completed and is ready to be operational. However, Pakistan has not fulfilled its commitment.