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Delhi agrees to Dhaka's strings to gas pipeline

Sharier Khan
From The Daily Star, Bangladesh
March 1, 2005
link to this article.

India has agreed to Bangladesh proposal to give it corridor access for Nepal and Bhutan's hydropower and trade of various commodities.

At a two-day meeting on Tri-Nation Gas Pipeline in Yangon that concluded on Friday, India also agreed to work on reducing its trade imbalance with Bangladesh on the basis of an "agreed framework", said sources close to the Bangladesh delegation to the Yangon meeting.

The two-member Bangladesh team insisted on these three issues in exchange of allowing India to enjoy energy security through a transnational gas pipeline that will pass through Bangladesh, the sources said.

Bangladesh however immediately needs framing specific proposals for purchase of hydropower from Nepal and Bhutan since there is no such proposal as yet, the sources pointed out.

Similar proposals to increase export-import with Nepal and Bhutan should also be framed for discussion with India so that Bangladesh can pinpoint how and where it wants a corridor through India.

On these proposals, Dhaka will have final understanding with New Delhi and sign a bilateral agreement before signing a tri-nation gas pipeline agreement.

Dhaka will just lag behind unless it can present such proposals at the coming tri-nation gas pipeline meeting, the sources said.

If all goes well, practical work for the gas pipeline might start after a year, they thought.

Back in January, at the minister-level meeting on tri-nation pipeline in Myanmar, Bangladesh and India had also agreed on the corridor access to Nepal and Bhutan and the need for steps to reduce trade gap. State Minister for Energy AKM Mosharraf Hossain on his return from that meeting had categorically said Dhaka would not sign the tri-nation agreement unless New Delhi signed the bilateral treaty with Bangladesh.

But cancellation of the Saarc summit gave rise to doubts on whether this understanding will continue.

At last week's meeting, the six-member Indian delegation was not open to these proposals on the first day. But they eventually agreed as Bangladesh pointed out this pipeline would mainly benefit India and that why Bangladesh would agree to give it (India) pipeline access unless it got similar benefits.

The Indian team also distributed a paper suggesting it wanted rail transit through Bangladesh and another paper showing the status of Indo-Bangladesh relations. The Indian side also went on saying Nepal does not have enough hydropower to sell.

"In this negotiation over the tri-nation pipeline, Bangladesh's concern was to ensure a balance between the three countries. This is why Bangladesh insisted on involving an international consortium to set up the gas pipeline," one source said.

As per the proposal, the transnational pipeline will begin from Myanmar to transmit gas to India's Tripura and then enter Bangladesh in the east and pass through the west to West Bengal of India.

Under this plan, Tripura will pump gas in the pipeline that will transmit it to West Bengal through Bangladesh. This makes Myanmar a weak party in the deal.

If Myanmar has no gas, the pipeline will continue to serve India as long as it goes through Bangladesh. This is why the project needs a balanced approach and involvement of an international consortium, sources mentioned.

Besides, it will make it easy for Bangladesh to ask for due wheeling charge from a company than from a nation like India.

The three nations agreed to sign a Memorandum of Understanding (MoU) in March or April. Under this MoU, a tri-nation project committee will be set up for a detailed technical report.

The project committee will be given six months to review and recommend various tariffs, the places through which the pipeline will pass and various types of detailed agreements. The agreements would include sales and purchase, use of Bangladesh land, and with Gas Transmission Company Ltd (GTCL) for its sole rights to operate the pipeline inside Bangladesh.

Although the pipeline was conceived eight years ago, Myanmar had in recent times started hammering on the idea. The Myanmar government then invited Bangladesh and India to sit on energy issues in Yangon in early January. The minister-level meeting ended with a positive note.

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