ISLAMABAD, May 26: Iran’s First Vice-President Dr Parviz Davoudi declared on Friday that work on the $7.4 billion IPI gas pipeline project would start in a month or two.

Addressing businessmen at the Islamabad Chamber of Commerce and Industry (ICCI), Mr Davoudi said that Iran, Pakistan and India would soon finalise a gas pricing formula.

He disclosed that other formalities about the project structure had already been agreed upon by the three countries in the joint working group’s meeting held in Islamabad recently.

About the current level of bilateral trade, he said it was not in consonance with the potential existed between the two countries.

“The present level of trade is not acceptable; we all need to think and find out the reasons for low trade,” he said, adding that the governments on both sides were determined to expand the trade volume. He said nobody could create any crack in the bilateral economic cooperation.

He announced that direct flights between the capitals of the two countries would be resumed soon to improve interaction.

He said Iranian banks had been authorised to open branches in neighbouring countries, including Pakistan, to facilitate traders, adding that Pakistani banks could also open branches in Tehran and other Iranian cities.

The Iranian dignitary said that Tehran had allocated $1.5 billion for infrastructure development, particularly roads, to increase trade with neighbouring countries, particularly Pakistan.

Pakistan, he said, could use Iranian land routes to transport goods to the Middles East, Europe and Central Asian states while Tehran would carry its goods to China through Pakistani routes.

He said Iran would provide assistance to the proposed Pakistan-Iran investment company to help boost bilateral economic ties. Addressing the gathering, Religious Affairs Minister Ijazul Haq said that agreements signed between the two countries would take the current level of trade to the $1 billion mark in the next two years.

ICCI president Abdul Rauf pointed out that the customs duties in Iran were comparatively high and proposed that it should be brought down to accelerate the two-way trade.

Qudssia Akhlaque adds: Meanwhile, President Gen Pervez Musharraf assured the Iranian first vice-president that Pakistan would support efforts for an amicable negotiated settlement of Tehran’s nuclear issue and advocated flexibility by all sides.

The president reaffirmed support for Iran’s legitimate right to peaceful use of nuclear technology under IAEA safeguards at a meeting with Dr Davoudi, said a foreign office statement.

He made it clear that Pakistan was against proliferation of nuclear weapons.

Sources privy to the meeting told Dawn that the president’s counsel to Iran was to review its position in its own interest and to ensure stability in the region.

Reffering to the IPI gas pipeline project, Gen Musharraf said the project should not be seen merely in the economic and commercial light while drawing attention to the peace dividends it promised.

Later, Dr Davoudi inaugurated an artificial limbs centre in Islamabad, which has been donated by Iran.

In the evening, he left for Tehran.