ISLAMABAD: While the Senate was informed on Friday that the ministry of water and power was considering the Indian offer to sell electricity, the officials have already decided not to proceed with the offer because of strategic reasons, according to sources.

In a written reply to the Senate, Water and Power Minister Syed Naveed Qamar said the government was trying to determine if the proposal was feasible or not.

He acknowledged that India had offered to sell electricity and said a working group had been formed by the ministry in this regard.

However, sources told Dawn that Pakistan would not proceed with the offer because doing so could lend legitimacy to the Indian power projects in occupied Kashmir.

“Pakistan has already filed appeals against the Kishanganga hydropower project in the Court of Arbitration at The Hague,” said an official of the water and power ministry, adding that the next hearing was expected to be held in the first week of August.

“India has massive electricity shortages but they want to sell some power to Pakistan. This will strengthen their claims in the court that they are producing cheap electricity and sharing the gains with Pakistan,” the official said.

An official of the commerce ministry said the issue of fuel trade between India and Pakistan had been under discussion since 2008, but it had not proceeded beyond the negotiation table because of various reasons.

The Senate was informed that at present Pakistan was importing 39 megawatt of electricity from Iran under the 2002 agreement and its tariff ranged between seven and 10 cents per kilowatt hour, depending upon average monthly price of OPEC basket of crude oil. Besides, the project to import 1,000MW electricity from Iran for Gwadar at the rate of 6.25 cents per unit is expected to be materialised by 2012.

The tariff for the import of 1,000MW electricity from Iran in the national grid will be discussed in the next joint working group meeting. Pakistan is working to complete the feasibility report for the purchase of 1,000MW electricity from Tajikistan and Kyrgyzstan under the CASA-1000 Project. The transmission lines for it will arrive through Afghanistan.

The Senate was also informed about the status of Iran-Pakistan gas pipeline project by Petroleum Minister Dr Asim Hussain.

He said the Gas Sale and Purchase Agreement for the project had been signed in June 2009 and it was under the implementation phase.

He said the estimated cost of the pipeline project was $1.245 billion and it was expected that the project would be completed by the end of 2014.

Dr Hussain said that if the internal issues related to gas pricing and distribution were resolved then the pipeline could even be completed by the end of 2012.