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The Iranian side of the $7.5 billion project is almost complete, but Pakistan has run into repeated problems in paying for the 780-kilometre section to be built on its side of the border.  — File Photo by AFP
The Iranian side of the $7.5 billion project is almost complete, but Pakistan has run into repeated problems in paying for the 780-kilometre section to be built on its side of the border. — File Photo by AFP
The Iranian side of the $7.5 billion project is almost complete, but Pakistan has run into repeated problems in paying for the 780-kilometre section to be built on its side of the border. — File Photo by AFP
The Iranian side of the $7.5 billion project is almost complete, but Pakistan has run into repeated problems in paying for the 780-kilometre section to be built on its side of the border. — File Photo by AFP

WASHINGTON: Pakistan has asked Iran to construct the Pakistani side of the gas pipeline as well because international sanctions were preventing Islamabad from raising funds for this project, said an official statement issued on Friday.

Finance Minister Ishaq Dar, who conveyed this message to his Iranian counterpart Ali Tayyebnia at a meeting in Washington, also urged him to help remove the restrictions that prevented better trade ties between the two countries.

Mr Dar asked the Iranian finance minister to “look into the possibility of constructing the Iran-Pakistan pipeline on Pakistani side as well” because international sanctions were preventing Pakistan from raising finances on its own, said a statement issued by the Pakistan Embassy, Washington.

“International financial agencies are shying away from the project because of these sanctions,” the statement said. “Both sides agreed to explore financing options within the ambit of sanctions imposed on Iran.”

On Tuesday, Petroleum Minister Shahid Khaqan Abbasi told reporters in Islamabad that Pakistan had asked Iran for $2 billion in financing to build its side of the gas pipeline, which has drawn threats of US sanctions.

The Iranian side of the $7.5 billion project is almost complete, but Pakistan has run into repeated problems in paying for the 780-kilometre section to be built on its side of the border.

Experts say the Pakistani request is another setback to the long-delayed project.

US laws call for automatic sanctions on those states and financial organisations that invest in Iranian oil and gas projects. The threat of sanctions scared away international investors.

Mr Dar, who met the Iranian minister on the sidelines of the annual World Bank and IMF meetings in Washington, also discussed with him options for going around these sanctions for promoting bilateral trade.

Mr Dar also asked Mr Tayyebnia to address the issues that prevent “trade between the two neighbouring countries from flourishing,” the statement said.

He told his Iranian counterpart that Pakistan was following a liberal trade regime, but the “Iranian side has imposed restrictions that do not allow businesses to function independently”.

The Iranian finance minister agreed to review the causes that were preventing better trade ties between the two countries. He noted that currently, the two countries only had a $1 billion trade, which “can be increased manifolds”.

Afghan counterpart: Ishaq Dar also met Afghan Finance Minister Omar Zakhilwal and reviewed the decisions taken in their last meeting.

Mr Zakhilwal urged Pakistan to support road and railway projects in Afghanistan and to resolve the issues that were hampering Afghan transit trade.

Mr Dar said that some practical difficulties which Pakistan had identified in the last joint economic meeting in August had delayed progress in the transit trade.

He noted that the Afghan government had not responded to the proposals submitted in the last meetings. The two sides agreed to meet again early next month in Kabul to discuss these issues.

In a meeting with the head of the Japan International Cooperation Agency, Akihiko Tanaka, the finance minister sought early approval of concessional loan for major projects like the Karachi Circular Railway.

Mr Tanaka said his institution was keen to help Pakistan in building these projects. He noted that feasibility studies for the Karachi Circular Railway were also complete.

The finance minister also sought Japan’s support for coal projects and Mr Tanaka assured him that Japan will do so.

Mr Dar signed a loan agreement with the Opec Fund for International Development, under which the OFID would provide $50 million for the completion of Neelum-Jhelum Hydropower Plant Project.

Comments (25) Closed

Hashim Oct 12, 2013 08:02pm

What will do/build ourselves?.

Sai Oct 12, 2013 08:20pm

Why not ask Iran to pay for the gas also?

khalid Oct 13, 2013 02:41am

"God forbid" This is "progress" Pakistan and Iran may very well benefit from this "partnership" and provide "mutual economic benefits and strength to the economies of both countries" This is something no one wants to be happening at "any cost" especially uncle SAM! an Saudi Arabia.

S. A. M. Oct 13, 2013 05:08am

Thanks to PML N govt Pakistan is getting the reputation of not honouring its committments. What more insult can be brought the upon the nation Mr PM

BK Oct 13, 2013 07:19am

This is similar to Beggars asking for their begging bowls also to be supplied to them. Why ask for something you cannot afford.

Asad Khan Oct 13, 2013 04:59pm

This is incompetence at its worst. Pakistan never had a single penny raised for this project. Now when the date for completion is near, and the penalties for not honoring your commitments will start to take effect they are asking the Iranians for help. Where was the government 3 or 5 years ago when they were talking to the Iranians knowing fully well that they had no money and signing all those contracts. What about the Iranians who have already spent all that money to build their side of the line - shouldn't they have been taken into confidence as to what our fiscal situation was, so that the two sides could move in sync.

shri Oct 13, 2013 07:24pm

I don't understand why pakistan wants to build the pipeline if it does not have money or cannot raise resources.

First they say they will build the pipeline come what may! Now they ask iran to fund it. and then they will ask iran to waive off the money they owe them for gas.

What do the iranians think? They will think - How can this country pay for gas they will sell if it has no money.

Pakistan is having difficulty in raising resources to meet its down budget deficit. What did pakistani leaders thought when they agreed to build this pipeline. the leaders are in a big ego trip!

No doubt! pakistan needs energy. it badly needs cheap gas!

First pakistan should get its economy into order and then it can think of building projects like these.

I dont see this happening in a long time!

gagan sarkar Oct 13, 2013 10:43pm


Pakistan does not have the money to pay for the pipeline, how will they pay for the gas?

But Pakistan has enough money to build nuclear bombs.

Altaf Oct 13, 2013 11:03pm

If Pakistan can't build their side of the pipeline for something so improtant like gas, and now this nation is going around thr world with a tin cup in their hand begging for something they can raise in few days, "$7.5 billion". Shame on these people called "Finance Minster".

Ahmer Oct 14, 2013 02:49am

Shrewd business move by Ishaq Dar. Having already invested $7.5 billion into it, Iran has no choice but to agree.

Sanjeev Oct 14, 2013 07:13am

Later on Pakistan will ask Iran to give the gas on credit or as free supply. This habit of begging has to stop some where.

Indian Oct 14, 2013 11:40am

This a genuine problem. Due to the sanctions, investment in this project will automatically invite sanctions. The idea cannot be totally dismissed. Let Iran build the pipeline and if possible even extend it to India (who can take the excess gas if not required by Pakistan) and charge the transportation charges in the gas price.

Kazmi, Shabbir Oct 14, 2013 01:46pm

@gagan sarkar: They are under the US and Saudi pressure not to build the pipeline

sal Oct 14, 2013 01:51pm

The military keeps taking funds from the public...why not this time, reverse that and use some of the military money to pay for the pipeline.

aa@sal: Why to comment on the subj when one doesn't have the idea Oct 14, 2013 03:50pm

@sal: Why to comment on the subj when one doesn't have the idea

Sasi Oct 14, 2013 04:21pm

Iran should build the pipeline on its own either to China or India via Pakistan,Pakistan can earn transit fees and that will be handy for paying its imports.But the security risks involved will put off Iran.

rosh Oct 14, 2013 05:24pm

Ishaq Dar is very good in begging and is well trained to do his job by his boss who was also finance Minister in Zia's time.

Nothing constructive, all 3 meetings with different delegations for main purpose to make or ask money.

What you can expect from a Munshi or Chaprasi.

Hemanth Oct 14, 2013 11:17pm

Next what...give the gas for free ??

unbelievable Oct 14, 2013 11:49pm

By most accounts sanctions have ruined Iran's economy and I doubt they have the funds or desire to spend an enormous sum on Pakistan's behalf. Further - Pakistan has used sanctions as a convenient excuse for not paying other amts owed to Iran - why should Iran believe that suddenly Pakistan is going to start paying for gas?

Waqar Rasool Oct 15, 2013 01:12am

@Sasi: @sahxy: As far as my knowledge of islam goes, as a muslim who is a student of The Holy Quran. Islam offers complete tolerance for all religions and discourages bloodshed. There are clear instructions in Quran for all muslims to respectfully guide the non believers towards the truth but if they chose not to accept, it is further instructed to leave them be as they are and bring no harm to them at all. Clear so far? Ok... Now to tell the definition of 'innocent' in light of Quran.. All human beings are born pure and innocent regardless of caste and creed and remain so till the day they bring harm to another Human purposefully... now to answer who deserves to die.. 1- Any human who kills another human deserves to die. its called 'kassas' in islam. blood for blood. 2- Any human who spreads hatred among people and promotes war, cruelty and injustice. (it comes under "fitna") 3- Any human who tries to alter the words of Quran or the principles of Islam.

S. A. M. Oct 15, 2013 05:04am

@rosh: very we said Rosh

el chor Oct 15, 2013 05:15am

@Hashim: international cricket stadium in kpk.

Satyameva Jayate Oct 15, 2013 05:24am

It is too farcical.... This Mr.Dar has no compunctions when it comes to begging. RECALL: Pakistan has already signed to PAY $1 million PER DAY if Pakistan does not completes its portion of IP Pipe-Dream in time.

Kanwalkeet Oct 15, 2013 12:49pm

Financing is one part. Is technology and skilled manpower available in Pakistan for taking this project further??

Bhola Ram Oct 15, 2013 11:09pm

Best bargain for Pakistan. Win-Win situation. Look at Iranian face.