The big news which had to make rounds in India but was unfortunately ignored is the dilly-dallying on the IPI decision. There are so many questions surrounding the IPI pipeline and here is a little effort to dig out some facts and the their internal linkages.
What IPI deal stands for is IRAN-PAKISTAN-INDIA gas pipeline. The deal is to get gas supply from IRAN via pakistan till 2025. The deal had its roots in an early as 1989 when the discussions started. The project is still in the discussion phase due to varied facts and figures.
First thing which is hindering the pipeline deal is the pakistan angle. Pakistan as many people know is the best from of India (sarcasm at its best). The fact is proved by the Mumbai attacks and the constant effects of infiltration and pumping in fake currency to de-stabilize the Indian economy. So the gloomy thoughts are bound to loom over the security of the pipeline. Pakistan will have the control over India's energy security as the pipeline passes through pakistan and pakistan can cut the supply anytime when the situations get tense between India and pakistan. The pipeline passes through Baluchistan. That is the part which is rarely under control of Islamabad. Its ruled by Baluchistan Liberation Army and they are in complete disagreement with Islamabad hence the pipeline security rests with the internal peace situation within pakistan. With many centers of power like Islamabad, ISI, Army, Al-Qaeda etc the situation always remains volatile. Hence the security concerns will always stay to haunt India.
After security comes the affordability. The cost of building the pipeline is approximately USD $7.5 Billion and the costs will increase for sure when the anti-social elements will place their bet on pipeline for money extortion. The gas which will be available to India will be at double the cost at which is sales in India. That will make it the costliest available fuel in India. So the viability and affordability of the gas is at risk. Add it to the carbon credits which India will lose and the amount of money required to purchase them. The cost then goes out of the roof and government will have to subsidize it heavily increasing the burden on tax payers shoulder. Purchasing so costly gas at the risk of pakistani control is enough to make the Indians jittery.
After all the cost and security concerns comes the political angle. That is the biggest factor according to me which is working against the pipeline deal.
First objections come from the mighty USA. They want to control the decision making power of IRAN and hence want to isolate Iran from rest of the world. So the USA is against the IPI deal as the deal will earn unwarranted support to IRAN from India and then US will find it difficult to act against Iran.
The second objection comes from India's long time friend. The Russians. Russia has a long time project running. The GAZPROM project is earning Russia crores of Rubles. Russia purchases gas from armenia and other small countries at a lower cost and sells it at higher or famously called as European cost to the European and other countries. They want to extend their net into Asia and Iran can bomb its dreams in one go. So the Russians are also a bit wary when it comes to the IPI deal. They have shown their anger and unhappiness by increasing the cost of Gorshkov; The warship which India was supposed to be getting at much cheaper cost. Russia is also the biggest supplier of arms to India and hence their wrath cannot be welcomed.
The alternatives are also plenty. India has entered in a deal with India. This will ensure the supply of nuclear fuel and technology to India. The nuclear energy promises to be more greener and cheaper than Iran gas. It will also eliminate the risks associated with pakistani control over the fuel supply and will keep energy hungry India's energy supplies secured.
One more option is the TAPI; The deal involves pakistan but is supported by Russia as well as USA. So the pakistani threat is minimized to a greater extent. The gas cost is also much cheaper compared to the IPI gas cost. So the gas becomes much more affordable and the project becomes viable. And with Afghanistan emerging as strategic partner of India, India also gets control against the pakistani monopolistic gas pipeline control.
The last factor which is emerging recently is the chinese interest in the IRAN gas. China is going all guns blazing to beat India in the IPI deal and getting the Gas rather than allowing India to have it. China is willing to pay a better price for the gas and also offering bilateral ties with Iran to ensure safety of Iran as a nation. China with its largest inventory of US Dollars, can beat India cost-wise at any given point of time.
Given the odds against the IPI deal, India had decided not to enter the mad race of cost wars and risky terrains of pakistan and baluchistan. The recent developments give out a signal that Indian interest is rebuilding. The basis is unclear but the hope is that Manmohan and team will be working out a deal and will come out with a surprise package which will be a win-win situation for all and if that is not the case, its better to let go the deal and look for other greener and beneficial options.
What IPI deal stands for is IRAN-PAKISTAN-INDIA gas pipeline. The deal is to get gas supply from IRAN via pakistan till 2025. The deal had its roots in an early as 1989 when the discussions started. The project is still in the discussion phase due to varied facts and figures.
First thing which is hindering the pipeline deal is the pakistan angle. Pakistan as many people know is the best from of India (sarcasm at its best). The fact is proved by the Mumbai attacks and the constant effects of infiltration and pumping in fake currency to de-stabilize the Indian economy. So the gloomy thoughts are bound to loom over the security of the pipeline. Pakistan will have the control over India's energy security as the pipeline passes through pakistan and pakistan can cut the supply anytime when the situations get tense between India and pakistan. The pipeline passes through Baluchistan. That is the part which is rarely under control of Islamabad. Its ruled by Baluchistan Liberation Army and they are in complete disagreement with Islamabad hence the pipeline security rests with the internal peace situation within pakistan. With many centers of power like Islamabad, ISI, Army, Al-Qaeda etc the situation always remains volatile. Hence the security concerns will always stay to haunt India.
After security comes the affordability. The cost of building the pipeline is approximately USD $7.5 Billion and the costs will increase for sure when the anti-social elements will place their bet on pipeline for money extortion. The gas which will be available to India will be at double the cost at which is sales in India. That will make it the costliest available fuel in India. So the viability and affordability of the gas is at risk. Add it to the carbon credits which India will lose and the amount of money required to purchase them. The cost then goes out of the roof and government will have to subsidize it heavily increasing the burden on tax payers shoulder. Purchasing so costly gas at the risk of pakistani control is enough to make the Indians jittery.
After all the cost and security concerns comes the political angle. That is the biggest factor according to me which is working against the pipeline deal.
First objections come from the mighty USA. They want to control the decision making power of IRAN and hence want to isolate Iran from rest of the world. So the USA is against the IPI deal as the deal will earn unwarranted support to IRAN from India and then US will find it difficult to act against Iran.
The second objection comes from India's long time friend. The Russians. Russia has a long time project running. The GAZPROM project is earning Russia crores of Rubles. Russia purchases gas from armenia and other small countries at a lower cost and sells it at higher or famously called as European cost to the European and other countries. They want to extend their net into Asia and Iran can bomb its dreams in one go. So the Russians are also a bit wary when it comes to the IPI deal. They have shown their anger and unhappiness by increasing the cost of Gorshkov; The warship which India was supposed to be getting at much cheaper cost. Russia is also the biggest supplier of arms to India and hence their wrath cannot be welcomed.
The alternatives are also plenty. India has entered in a deal with India. This will ensure the supply of nuclear fuel and technology to India. The nuclear energy promises to be more greener and cheaper than Iran gas. It will also eliminate the risks associated with pakistani control over the fuel supply and will keep energy hungry India's energy supplies secured.
One more option is the TAPI; The deal involves pakistan but is supported by Russia as well as USA. So the pakistani threat is minimized to a greater extent. The gas cost is also much cheaper compared to the IPI gas cost. So the gas becomes much more affordable and the project becomes viable. And with Afghanistan emerging as strategic partner of India, India also gets control against the pakistani monopolistic gas pipeline control.
The last factor which is emerging recently is the chinese interest in the IRAN gas. China is going all guns blazing to beat India in the IPI deal and getting the Gas rather than allowing India to have it. China is willing to pay a better price for the gas and also offering bilateral ties with Iran to ensure safety of Iran as a nation. China with its largest inventory of US Dollars, can beat India cost-wise at any given point of time.
Given the odds against the IPI deal, India had decided not to enter the mad race of cost wars and risky terrains of pakistan and baluchistan. The recent developments give out a signal that Indian interest is rebuilding. The basis is unclear but the hope is that Manmohan and team will be working out a deal and will come out with a surprise package which will be a win-win situation for all and if that is not the case, its better to let go the deal and look for other greener and beneficial options.
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