Indian Expert: Economics does not push Iran-Pakistan-India pipeline project
July 27, 2005
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Talking to IRNA today, Lydia Powell, Senior Fellow at New Delhi-based Observer Research Foundation said, economic facts on the ground was not supportive of the Iran-Pakistan-India gas pipeline project. "There is a contradiction between India's foreign policy and energy policy. In such circumstances there is not a single bank that will come forward for fund it," Powell said.
"The pipeline project seems to be steered by the personality of the Indian Minister of Petroleum and Natural Gas. A project does not become bankable because of one minister", Powell added.
The energy expert who is with the ORF Center for Resource Management dedicated to study India's energy scenario said, "India is not the best market for gas. Indian gas market is immature; the government has not initiated a specific legislation in support of the kind of projects like the India-Iran gas pipeline project.
Such projects take long time to execute and governments might be replaced and only a stable national policy could ensure construction of a like project".
"It is very nice to think of an Asian gas grid but it has to be remembered that India does not have a gas grid even within its own territory," Powell said while describing the lack of deep foundational thinking and policy making behind the plans of Asian gas grids as championed by the Indian Minister of Petroleum and Natural Gas, Mani Shankar Aiyar.
Powell feels, gas pipeline project in India's west is not possible in the immediate future. She said it might become a reality in the Myanmar-Bangladesh-India sector.
"Bangladesh is asking for an increment in the transit fees and it can be taken care of by India. Moreover, the gas in Myanmar is owned by Indian companies like Oil and Natural Gas Corporation (ONGC) and Gas Authority of Indian Ltd. (GAIL).
Myanmar-Bangladesh-India gas pipeline project is more feasible project and once executed, it might actually push the India-Iran gas pipeline project," Powell explained.
She explained that the real hurdle before the pipeline project is not the issue of terrorism. "Terrorism is not the show stopper.
Pipelines are the most economic means of transporting gas. The private sector in India has not been invited to participate in the project and they, expectedly are disappointed with their non-participation," said Powell.
Giving an indication of the government-private sector tussle over he gas pipeline project, Powell said, "There is an impression that perhaps the Gas Authority of India Ltd. does not want to share the fruits of the pipeline project with private companies and wants to be the sole controller of the pipeline. This has created misgivings in the private sector about the pipeline project." "Indian government has been very protective of public sector bodies emerging as the real players in the gas sector. LNG is a better option." "Realities simply don't support the project", she added sympathetically.
About the nuclear deal between India and the United States, Powell said, "as far as energy for India's growing economy is concerned, it is a good beginning. India has suffered due to the international nuclear regime that prevented us from getting access to capital and nuclear fuel. Now it seems India would get access to the much necessary nuclear fuel for its Tarapore nuclear reactor." Commenting on the problems in the Indian nuclear energy sector, Powell said, "there is no transparency in India's nuclear policy".
She added, "nuclear reactors at Tarapore are truly short of nuclear fuel and Indian technological capability would be served well by the Indo-US nuclear pact." But she foresaw something very grim as far as disposal of nuclear waste was concerned.
"Unlike in the West where nuclear waste was generated because the civilian reactors did not recycle the waste to produce plutonium for military use, India has been recycling the radioactive waste from the nuclear reactors to produce plutonium for its defence-oriented nuclear program. The n-pact between India and US will require New Delhi to separate the military and the civilian reactors, which will impose a great cost on India and compel India to produce nuclear waste from its civilian nuclear reactors," Powell explained.
The energy expert added, "the issues behind the India-US nuclear deal will slowly evolve in the coming years." "Disposal of nuclear waste could generate huge controversy in India in the coming years, in case it is not handled judiciously," Lydia Powell cautioned.