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Chinese bank breaks promise to offer financial help for Iran-Pakistan gas pipeline project

Islamabad, Wed, 14 Mar 2012 ANI

Islamabad, Mar 14 (ANI): A consortium led by the Industrial and Commercial Bank of China (ICBC) has refused to provide financial advisory services for the Iran-Pakistan gas pipeline project, apparently because of US opposition to the plan and forced the government to look for alternative financing options.


"It is apprehended that a probable reason for not signing the agreement (to act as financial adviser for the project) till date could be geopolitical situation in the region," The Dawn quoted a summary presented to the Economic Coordination Committee (ECC) of the cabinet, as saying.


A meeting of the ECC presided over by Finance Minister Dr Abdul Hafeez Shaikh was informed by Petroleum Secretary Mohammad Ejaz Chaudhry that the Chinese consortium's leader had "run away from the project".


It was informed that on the directives of decision-making forums, "a top class financial adviser had been appointed through international competitive bidding following procurement rules".


The contract with Habib Bank and Ernst and Young Ford Rhodes Sidat Hyder (EYFRSH) - two other members of the advisory consortium - had been signed by Inter-State gas Systems (ISGS), a state owned company, in the first week of January but the ICBC had been delaying the signing of a formal agreement. Now, the HBL and the EYFRSH were also not giving a clear response, the meeting was informed.


"The petroleum ministry informed that the existing parties of the ICBC and HBL are showing less interest in the IP project, so the ECC may go for other options," an official statement issued after the meeting said.


The 'front-end engineering design' feasibility and a detailed route survey are being done by a consortium comprising the ILF of China and Nespak and are expected to be completed by June, on the basis of which bids will be invited for the 800 kilometre pipeline inside Pakistan for an engineering, procurement and construction (EPC) contract at an estimated cost of 1.5 billion dollars. (ANI)


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